Real Estate Development
Developers work with many different counterparts along each step of this process, including architects, city planners, engineers, surveyors, inspectors, contractors, lawyers, leasing agents, etc. In the Town and Country Planning context in the United Kingdom, ‘development’ is defined in the Town and Country Planning Act 1990 s55. At one extreme, a large company might include many services, from architecture to engineering. A development team can be put together in one of several ways. At the other end of the spectrum, a development company might consist of one principal and a few staff who hire or contract with other companies and professionals for each service as needed.
After subdivision is complete, the developer usually markets the land to a home builder or other end user, for such uses as a warehouse or shopping center. Frej, Anne B; Peiser, Richard B. (2003). Professional Real Estate Development: The ULI Guide to the Business (2 ed.). Urban Land Institute. p. This page was last edited on 19 January 2023, at 11:28 (UTC). By using this site, you agree to the Terms of Use and Privacy Policy. Text is available under the Creative Commons Attribution-ShareAlike License 3.0; additional terms may apply. Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. In any case, use of spatial intelligence tools mitigate the risk of these developers by modeling the population trends and demographic make-up of the sort of customers a home builder or retailer would like to have surrounding their new development.
Developers usually take the greatest risk in the creation or renovation of real estate and receive the greatest rewards. Alternatively, a developer that is also a builder may purchase a property with the plans and permits in place so that they do not have the risk of failing to obtain planning approval and can start construction on the development immediately. Typically, developers purchase a tract of land, determine the marketing of the property, develop the building program and design, obtain the necessary public approval and financing, build the structures, and rent out, manage, and ultimately sell it. Sometimes property developers will only undertake part of the process. For example, some developers source a property and get the plans and permits approved before selling the property with the plans and permits to a builder at a premium price.
The general contractor of the project hires subcontractors to put the architectural plans into action. Purchasing unused land for a potential development is sometimes called speculative development. Subdivision of land is the principal mechanism by which communities are developed. Technically, subdivision describes the legal and physical steps a developer must take to convert raw land into developed land. Subdivision is a vital part of a community’s growth, determining its appearance, the mix of its land uses, and its infrastructure, including roads, drainage systems, water, sewerage, and public utilities. Land development can pose the most risk, but can also be the most profitable technique as it is dependent on the public sector for approvals and infrastructure and because it involves a long investment period with no positive cash flow.
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