01_Introduction Flashcards
Property Types
- Residential
- single family houses, condos, corporate apartments - Income producing
- multifamily
- commercial: office, retail, hotel
- Industrial Warehouses
- Special Purpose - Mixed Development
4 stages of real estate project
- design
- build
- operate
- recycle
Development Procedure
General Phases
- Project Concept
- Feasibility
- Dealmaking: Planning & Financing
- Construction
- Operations or Sale
Stakeholders across Development Procedure
- Management Team (Developer)
- Design/Construction Team
- Real Estate Service Team
- Lenders and Inventors
5 critical elements of Project Concept
- specific use
- designated site
- for identified market
- by specific development team
- with a defined financial plan
Project Initiation
Project Conception
- Identify Project team
- special market goal
- evaluation site: select use and site
- rough cost estimate: identify realistic sources of financing
Project Conception
Part of Project Concept Stage
Management Team Developer
- design general project management team
Design/Construction
- start architectural program and do footprint schematic
**Real Estate Service Team **
- special market goal
- evaluation site; select use and site
- rough cost estimate -> Identify realistic sources of financing [lenders and investors]
Project Feasibility
Feasibility Stage
Management Team Developer
- identify all team members
Design/Construction
- crefine schematic: elevations
**Real Estate Service Team **
- market analysis
- site analysis
- analysis of use concept
- cost analysis operating pro forma
- risk analysis
Dealmaking: Financial Planning
Management Team Developer
- manage team member’s work
- coordinate interaction negotiate trade-offs
- manage team member’s work
Design/Construction
- construction specifications
- bid construction, contract construction
**Real Estate Service Team **
- pre-lease or pre-seal
- permits, site survey
- draft management operating plan
- acquire site
Lenders and Investors
- financing agreement for permananent and construction loans
- arrange financing guarantees, close construction financing
Construction Stage
Management Team Developer
- construction oversight or management through construction manager or architect (costs, dates, quality)
- publicity event for opening
Design/Construction
- constractor does construction, cash draws, progress review
**Real Estate Service Team **
- hire operating manager
- market to tenants or buyers
- sign leases or sale contract
Lenders or Investors
- lender’s inspection
- equity pay-in schedule
Operations or Sales Stage
Development Procedure
Management Team Developer
- owner’s responsibility: Manage, pay mortgage, report to investors
Design/Construction
- Operating Maintenance and management
- negotiate leases / sales
**Lenders and Investors **
- close permanent financing
- equity pay-in (if scheduled)
Trends in EU Real Estate Development
Business Condition
- inflation and interest rate are biggest concern
- construction costs and availability of resources, sustainability
Long Term Challenge of Real Estate Development
- ESG concerns
Market Trend
Most common change when repurposing an asset
Last Year
- from office to residential
- from retail to mixed use and residential
Next Years
- from office to residential and mixed use
- from retail to mixed use and residential
Back of the Envelope
Projections on costs
Estimating a rough Cost Estimate
- based on general industry standards e.g. costs/ m2
- or they reflect initial information about items such as property’s asking price
Part of Project Concept
