Developmentally Challenged

No we are not talking about a child here. We are talking about the hurdles that development transactions face. As briefly mentioned in the Its Signed Now What post, there are many hurdles we as commercial brokers face in the development field.

Many times we will ask our clients upfront about what Due Diligence items they have. We all want a quick close right? Well sorry your out of luck there if you have no, or are not willing to get some of the basic due diligence material put together to help us 1. Market the property and 2. Provide that to a potential buyer to save them weeks if not months on a development deal.

But why so much time? Surely they can get it done quicker right….

We are all at the mercy of the third party providers, those can include, Environmental Groups, Surveyors, Land Use Attorneys, Engineers and Architects. Then there are the regulatory bodies of municipal and state (sometimes federal) permits, zoning ordinances, land use codes and specialty items like: Tree Save Standards, minimum commercial sf on a multifamily project. Then we arrive at the financing side of the transaction, where when we get all the permits and everything ready to go, the Interest rates have changed, banks requirements for equity contributions have increased and or they are no longer doing “xyz” loan type.

So do you know what the actual time for a property boundary or topo survey is? How about a tree survey? What happens if they mark the survey wrong ? What happens if you think the property is free of environmental contamination, but a PHASE 1 Environmental Site Assessment comes back and there was a oil spill two blocks over and there’s a potential that the ground water brought it to your property?

Do you know how election years for a local city or county board can swing the whole tenor of development?

These are all factors in selecting a site and or the ability for a developer to close. Many times the phrase is, if you want that high dollar price, you have to give us the time to achieve that high dollar.

Making sure you understand that part of the deal process is a major part on how to ensure our clients get the goals that they set out, and proper guidance also delivers exceptional results.