An example of a project type with relatively low risk across all stages of the life cycle is a retail “build-to-suit” project.
In a retail build-to-suit, a developer secures a long-term credit tenant, such as a Mc Donald’s or Walgreens, and develops a property to suit that tenant.
As a project nears the “shovel-ready” construction stage, many of those potential obstacles have been addressed and resolved and there is more certainty related to execution, costs, and schedule.
Below, we discuss items that are consistent across project types.
There are usually two distinct approvals required to begin construction: land use approval and building approval.
A land use permit is a governing jurisdiction’s approval of the project on a conceptual level.
For this reason, it is less likely to delay fundraising.
The building permit is generally the last milestone in the pre-development stage.
Real estate development is a multi-step process that can be complicated, lengthy and risky.
It can take years to bring a project from the initial planning stage through construction to final completion, and there are plenty of obstacles that can pop up along the way.