Real estate development is a complicated process aimed at creating value by improving raw or vacant land or real property. The process is typically managed by a real estate developer - someone who has the industry knowledge to identify opportunities and an extensive professional network to complete a project. Real estate developers need to be expert project managers and people connectors. A typical project will involve professionals from various industries, including attorneys, environmental consultants, architects, engineers, land planners, surveyors, lenders, and contractors - so knowing who to enlist and when to leverage their expertise is vital to the overall success of a project. A real estate development can be a lengthy undertaking and involves varying amounts of risk depending on the type of project. Projects can range from land speculation to existing property renovation to ground-up development. The process can be overwhelming if not properly navigated. Mistakes made during development will not only add time to a project but are often very costly. And when you've borrowed money or are responsible for managing the interests of 3rd party stakeholders, the pressure intensifies. Planning, following a sequential process, and establishing risk mitigation measures as part of every development project are essential for success. Traditional development projects are typically broken down into distinct phases - and from a project management perspective, those phases help delineate significant project milestones. But depending on the type and nature of a proposed project, milestones may vary, and the associated benchmarks required during each phase will change. Below, we discuss the 4 major stages of real estate development and several important tasks implicit in each phase.
Phase 2 - Pre-development
Phase 3 - Development & Construction
Phase 4 - Post Construction/Closeout or Operation & Management