The developer's idea must either evolve into a particular project design associated with a specific piece of land or be abandoned before extensive resources are committed to the concept.
Primary steps are:
- legal and physical feasibility
- acquiring a site
- crucial
- 10-30% of proj's tot cost
- location is the key to realizable rent
- issue between tying up the site early with uncertainty but a greater margin for profit or taking time, increasing costs and exposing financial interest in the land
- be sure to involve the public and get them on your side
- marketing
- financial tasks
- management functions
After making an assessment of the site you enter stage three: deciding to go for it or get out.
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A More Detailed Scanning of The Environment: Competitors and Governments
Need to understand local politics but remember they will continue to change
- make friends with local officials/politicians/general public
- learn about competitors
- keep up to date
- People can make urban growth happen!
- book uses LA as an exciting example of what human beings are capable of
- People congregate to pursue economic opportunities that are less avialable at lower social and physical densities.
- Concentric Zone Theory
- Cities grow in concentric rings
- sort of outdated due to transportation innovations
- Axial Theory
- dev among transportation routes
- provides access
- commuting time rather than distance that dries location
- Sector Theory
- waves of development move outward from the central city
- looks like a pie
- agglomeration influences business location
- involves careful analysis of growth over time
- e.g. Atlanta
- edge cities are a "often a worthwhile investment"
- land availability
- more opp for density
Choosing the Site:
Just be knowledgeable of the market and the area or use more technical ways.
- GIS
- Forecast where development will occur
- Gravity Models
- spatial interaction models help predict
- population movement
- traffic flow
- store patronage
- shopping center revenue
- establish the buildable sqft
- environmental obstructions
- flood planes
- soil type
- hazardous waste
- some places require an archeological survey--just FYI
- Prices/dwelling unit are much more clustered than prices/SQFT of site area
- check out current zoning
- look for possibility of future changes
- subdivision regs
- specify the quality of infrastructure
- ideally specifies the quality and not the material used
- Figure out if you need any environmental changes
- gradient, runoff, drainage, etc.
- Get building footprint from architect
- determines whether or not the building and the parking can be placed on the site
- must coordinate with the environmental stuff (obvi)
- usually executed with the architect
- land value relies more on the land's visibility and proximity to customers and services than on its inherent productivity.
Financial Feasibility
- Do a back of the envelope analysis only with better info (basics)
- focus on how much start up capital is necessary
- figure out where it will come from
- option and purchase agreements should contain contingency clauses and specify that protective warranties wil be included in the deed
- ensure that the seller provided all possible guarantees to the title's quality
- constructive notice to public
- have release clauses and/or
- possible in a seller financed mortgage
- allows a borrower or developer to obtain a first lien on a portion of the land by paying a portion of the seller's financing note.
- subordination clauses in the option or purchase agreement
- a promise to move from a first lien position to a second lien position under specified circumstances.
- must be written into any option agreement so that they are subsequently included in the seller's financing.
- help to ensure that project is acceptable to the community
- informally present to city officials
- do good market research
?s ask rachel
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