The Encyclopedia of Commercial Real Estate Advice

CHAPTER 950 Steps of Developing and That Isn't All of Them

Are there really 50 steps in developing commercial real estate? To give you a clue, if you were to look over the City of Phoenix's applications for commercial building permits, you will find over 140 items to provide. The 50 steps are just some of the main To-Dos. I have outlined these later in this chapter. The truth is that there are many, many more. I just did not want to scare anyone away with a really big number.

Let's look at just one of the 50 steps: the construction budget. The budget for a recent $32 million mid-high-rise building our firm financed included 1,159 items to build, install, complete, or purchase. Smaller buildings might have as few as 400 items. Okay, so the developer is not going to have to do the work on all those items, but they are responsible for choosing their quality and overseeing their installation. At a minimum, I think you will agree, they do need to know what each item is and how it is used.

If we start with site selection and tying up the land, then add the feasibility research, due diligence items, and requirements for building permits, entitlements, building plan review, and include financing, you can easily have a list of over 200 items to gather, investigate, take care of, design, or oversee. And on top of that, the developer still has many tasks to do with making distributions to investors, leasing, overseeing operations, refinancing, or selling the completed property.

If this ...