With a population of nearly 1.3 million people and counting, Dallas is without a doubt a growing county, and as a result it is safe to say that commercial real-estate in this region is a profitable industry. If commercial development is your business, or you are considering transferring into this field, then this article is designed for you.
This is a step by step walk-through of what an optimized commercial development in Dallas ought to look like.
This is the fifth instalment in our continuing blog series on development yield optimization. The following posts will cover many of the questions and concerns regarding development projects. If you’re just joining us now, you may find the previous articles of use as well.
Follow the shortcuts:
Define your development vision
This is best done by starting with what you, personally, want as a return for you work. What sort of income are you interested in? Do you want to sell, lease, or rent? These are simple questions, and are simplified further if you already have an offer to buy from a retailer or organization. Working alongside one another, the project can be developed in a manner that encompasses both development requirements and vision. If the commercial space will be for lease or rent from retailers, understanding who your renters will be will increase the lifespan and profitability of your project. If there is no such offer on the table, which is more likely, or there are offers that have not been researched thoroughly, then there may be some issues.
Many brands cannot be within a certain distance of one another, and this is an absolute necessity to research before signing a contract over. If the site is too close to another department under the same brand, then you will need to ask for permission from someone who will most likely not approve of you infringing on his business.
Taking your target market into consideration once you know what you want, and the vision can be altered and optimized to reflect the potential clients that would be interested in the space that you have to offer.
Site matching and acquisition
If you already have a group who are interested in your project, then site-matching falls to many of the points we covered in a previous article, Developing in Dallas: A Site-Finding Strategy. If you do not have a safe sale already set in place, which is true in many cases, then not to worry. Much like writing an article, you just have to play for your audience.
Understanding demographics and future plans for a site are your main tools here; acquiring a site in an area that has a large capacity for development but has not yet taken off is a great way to secure a long-term profit, but is not in the best interest for short-term rewards. Likewise, spending a little more on a site or asking for exceptions in zoning permits for an exceptional project could find you a plot of land that sells quickly in an established market while retaining quality.
A comprehensive plan
Noting the key development benchmarks in a calendar is only achievable after all of the information has been acquired, and alongside an expert’s second-opinion, it is the best way to validate a timeline and strategy of a vision. Deadlines, interest rates, permit dates, hard and soft costs, and the bottom line - all of these can get integrated into one, comprehensive plan.
This will give you a tangible assurance that could otherwise appear unorganized, both to you and to your investors. If you reach a certain point and note that you’re over budget, analyze the plan to date and note what’s shifted - this can aid in targeting costly pitfalls in the future and gives you more time to minimize or circumvent damage entirely.
Development yield optimization
Commercial space calls for different amenities than residential or industrial. Understanding what it is that commercials-oriented customers are interested in will mean the world to optimizing your plans. This is achieved by using the marketing concept.
To use a similar analogy from a previous article we wrote, what is it that a decision maker at an organization actually wants? Do they want the qualities of your structure, as the product concept would have us believe - or do they want an affordable and comfortable space not too far from home where they will enjoy sitting behind desks.
To optimize your yield, optimize your understanding of your audience, and tailor your vision to them. You’re not selling a commercial edifice - you’re selling the future space someone will spend forty-plus hours per week. If you know exactly what they want, then your strategy is cut and dried.