Chapter 10- Stage One: The Idea Process

This chapter is kind of a joke. I'm just saying that so if you ever need to prioritize which chapters to re-read, it is now clear this isn't one of them. I will do my best to summarize it precisely so there will be absolutely no need to return to it ever again.

Different Motivations Behind Ideas

1. Site looking for a use
   
2. Entrepreneurial (from the imagination)
3. Developed site needs redevelopment
4. New use for existing building
5. Use looking for a site

Back of the Envelope Pro Forma (BEPF)

1. BEPF
1. estimate the willingness to pay of the conceptual target user or income/sqft
   
2. multiply leasable sqft by revenue/sqft
3. minus NOEs
4. multiply by 10-12 (the inerse of an 8-10 % cap rate)
2. BEPF weeds out the feasible ideas from the millions of not feasible ideas
3. A successful looking BEPF doesn't equal a go on the project.

Generating Ideas Through Strategic Decision Making and Market Research

1. Strategic Planning
• Formulate goals
• determine course of action
• think about the desired organization of the company for each project
2. Techniques for generating ideas
• Brainstorming
• write down every idea
• defer judgment
  
• look for combinations of ideas
• Nominal Group Process
• used for establishing priority among ideas
• write ideas down in silence
• facilitator lists ideas
• members write up a confidential vote
• preferred projects emerge
• Delphi Method
• gather informed opinions on a research question
• looking for a consistent set of answers
• compare expert answers and formulate smaller more specific questions for them.
• good for complex questions
• Environmental Scanning
• systematic way for developers to monitor local, regional, national and global environments and the implications of changes in these environments
• e.g. what if the whole housing market crashes?
• Focus Groups
• for modifying proposed projects for a specific group of consumers
  
• allows free flow of thoughts
• 8-12 ppl for 2 hours
• moderator must be well informed in order to ask provocative questions
• be careful that you don't have the "wrong" people participating
• Surveys
• assess customer satisfaction
• assess willingness to pay
3. Words of Warning and Sign Posts
• Test Marketing a New Idea
• do projects in small phases to test market at each phase
• Using Research to Make Decisions
• development ideas do not need to be well researched to be successful
• ...but it is probably more likely they will be (successful) if you do some research.
4. Risk Control During Stage One of the Real Estate Development Process
• Know yourself (strengths/weaknesses)
  
• this way you know what you can take on and what you can't
• Know your image
• this way you can be more manipulative
• Know your team
• Coordinate
• talk to your team of both soft cost ppl and hard cost ppl
• know what's up in the real estate world
• Behave Ethically

and if you have any problems understanding what that is you can go here on Thursday:
http://www.phillyethics.net/about_us.php

?s ask Rachel