Commercial Development

1
Commercial Development

• Jim Burton, Ph.D.
• Marketing Real Estate
• College of Business

2
Overview

• Development Process
• Site Analysis
• Types of Commercial Development
• Development Financing

3
Development Process

• Development Idea
• Preliminary Market Analysis
• Preliminary Plans Specs
• Preliminary Costs
• Development Loan
• Final Market, Plans Costs
• Construction
• Marketing Sales

4
Development Stages

• Cost vs. PV of CF
• Entrepreneurial Profit
• Market Analysis
• Demand population, households, income, retail
  sales.
• Competition Survey
• Forecasting Rents, Expenses, Cash Flows

5
Site Analysis

• Location
• Convenience
• Access
• Exposure
• Utilities
• Physical Site - frontage, topography, size.

6
Shopping Centers

• Market Analysis trade area
• Types
• Neighborhood 50,000 SF
• Community 150,000 SF
• Regional 500,000 SF
• Super regional 1,000,000 SF
• Tenant Mix Leases
• Cash Flow Analysis CAM charges

7
Office Buildings

• Market Analysis employment
• Types
• Office Park
• Free standing
• Mid town downtown
• Suburban
• Tenant Mix
• Cash Flow Analysis expense stops

8
Industrial Buildings

• Market Analysis,workers, utilities wages
• Types
• Office Park
• Free standing
• Mid town downtown
• Suburban
• Tenant Mix
• Cash Flow Analysis

9
Development Financing

• High Risk, High Rate
• 100 of Cost
• Loan Draws
• Lot Releases
• Present Value of Cash Flows