As many of you know, I joined Verdant Realty Group (The Verdant Companies) in October to not only continue to expand my business as a realtor, but to more importantly pick-up and learn another component of the industry, Real Estate Development. Verdant Development has been servicing and supporting various development projects in the Frederick County area for a couple decades and continues to be a key contributor to the successful growth of the community.
I was fortunate enough to be brought on this team to learn the ins-and-outs of development. Since my transition in October, the knowledge I have gained is eye-opening. In this blog, I will highlight my new prospective on development.
Due Diligence and Prep
As a Realtor, I know a few things about conducting a proper due-diligence and preparing buyers or sellers on a real estate transaction. As anyone who has been through a transaction can understand, there are many factors that go into buying or selling a home, and a proper understanding of the subject property and the overall transaction process is key to a successful sale.
When it comes to real estate development, the emphasis and depth of conducting due-diligence and prep work cannot be overstated. Here is a list of just a few items a developer must consider before starting on a project.
· Phase 1 Survey
· Zoning Study
· Environmental Study
· Feasibility Study
· Market Research
· Improvement Plans
· And the list goes on….
After just a few months of sitting on meetings and learning about various projects at different stages of the development process, it was clear that development was not a simple “1,2,3” process. The amount of information and consideration that is considered for these projects is astounding.
A common misconception from the public is that anyone can build just about anything on any piece of land. This could not be further from the truth! And from a realtor’s perspective, I was under the impression that only zoning and environmental consideration mattered. Well, I was missing loads of information.
Even after all the above due-diligence and studies have taken place, that’s only one piece of a very large puzzle. In the world of development, not only your opinion matters….
Social and Political Approval
When it comes to development, a developer or owners’ opinion are not the only ones that are considered. For any development project there are several people, both individuals and legal bodies, that must review, oversee, and ultimately have a say in a project. Some of these might be but not limited to the following:
· Planning & Zoning Commission
· Historic Preservation Organizations
· Environmental Agencies
· Public Agencies & Institutions
· Contractors, Engineers and/or Architects
· Community Residents
· And many more….
With so many people having an opinion or say, coupled with legal government restrictions or guidelines in place, seeing a development project be carried out from concept planning to completion, is a challenging feat. When it comes to a new development, there will be opposition and pushback through various phases of the project, some of which can be seen ahead of time and others that may rise as time goes on. As mentioned above, it’s imperative that a developer conduct a thorough due diligence process prior to investing time, money, and resources into a project.
In anticipation for government and community feedback, a smart developer will network and work closely to, collaborate, plan, and hear out various ideas and concerns that the public may have regarding the project. Utilizing additional information and feedback, a developer can work to pivot aspects of a project to ensure a positive impact on the community.
Timeline
Considering all the various components and aspects involved in a development project, it's evident that time is one of the most valuable and costly resources. The timeline for a real estate development project is subject to significant variability, influenced by factors such as project size, complexity, location, regulatory requirements, financing, and market conditions. While some projects may be completed within two to five years on average, more complex endeavors often exceed the five-year mark due to additional hurdles and intricacies.
Moreover, the prolonged timeline inherent in many development projects underscores the importance of careful planning, foresight, and adaptability. Developers must navigate a myriad of challenges and uncertainties, including regulatory delays, market fluctuations, and unexpected obstacles, all of which can impact project timelines and outcomes. As such, meticulous attention to detail, effective project management, and proactive risk mitigation strategies are essential for ensuring the successful execution of real estate development initiatives.
Conclusion:
Embarking on the journey of real estate development with The Verdant Companies has been a fascinating ride. Since joining the team in October, I've had the privilege of delving into the intricate world of development, expanding my horizons beyond traditional real estate transactions.
Transitioning from the fast-paced world of real estate transactions to the meticulous planning of development projects has been an eye-opening experience. From conducting comprehensive due diligence to navigating the complexities of social and political approval, I've gained a newfound appreciation for the multifaceted nature of development endeavors.
One of the most striking revelations has been the extensive collaboration required across various stakeholders. Successful development hinges not only on expertise and foresight but also on effective communication and collaboration with regulatory bodies, community members, and industry professionals.
Moreover, recognizing the significant investment of time inherent in development projects underscores the importance of strategic planning and efficient project management. With timelines often spanning several years, it's essential to anticipate challenges, adapt to evolving circumstances, and stay committed to the long-term vision.
As I continue to immerse myself in the world of real estate development, I'm eager to further explore its intricacies and leverage my newfound insights to drive positive change in the communities we serve. Through ongoing learning and collaboration, I'm confident in our ability to navigate the complexities of development and make a lasting impact.