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Real estate development, or property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others. Real estate developers are the people and companies who coordinate all of these activities, converting ideas from paper to real property.Real estate development is different from construction, although many developers also manage the construction process.
Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control, and orchestrate the process of development from the beginning to end.Developers usually take the greatest risk in the creation or renovation of real estate—and receive the greatest rewards. 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. 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.
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.
Many aspects of the real estate development process require local or state licensing, such as acting as a real estate broker or sales agent. A real estate developer is not a professional designation; there are no schools or associations who recognize or protect the term as a trademark.[ citation needed ]
No single path automatically leads to success in real estate development. Developers come from a variety of disciplines— construction, urban planning, lending, architecture, law and accounting, among others. Recent specialized programs that award a Master of Real Estate Development (MRED) degree are also available. The graduate programs in real estate development are the most comprehensive education in the real estate industry. Other formal education includes a Master of Science in Real Estate (MSRE), or an MBA.
A development team can be put together in one of several ways. At one extreme, a large company might include many services, from architecture to engineering. 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.
Assembling a team of professionals to address the environmental, economic, private, physical and political issues inherent in a complex development project is critical. A developer's success depends on the ability to coordinate and lead the completion of a series of interrelated activities efficiently and at the appropriate time.
Development process requires skills of many professionals: architects, landscape architects, civil engineers and site planners to address project design; market consultants to determine demand and a project's economics; attorneys to handle agreements and government approvals; environmental consultants and soils engineers to analyze a site's physical limitations and environmental impacts; surveyors and title companies to provide legal descriptions of a property; and lenders to provide financing. 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.
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. 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.
Land-use planning is the process of regulating the use of land in an effort to promote more desirable social and environmental outcomes as well as a more efficient use of resources. Goals of land use planning may include environmental conservation, restraint of urban sprawl, minimization of transport costs, prevention of land use conflicts, and a reduction in exposure to pollutants. By and large, the uses of land determine the diverse socioeconomic activities that occur in a specific area, the patterns of human behavior they produce, and their impact on the environment.
William Zeckendorf Sr. was a prominent American real estate developer. Through his development company Webb and Knapp — for which he began working in 1938 and which he purchased in 1949 — he developed a significant portion of the New York City urban landscape. Architects I. M. Pei and Le Corbusier designed structures for Zeckendorf's development projects.
A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing. It is usually called a bridging loan in the United Kingdom, also known as a "caveat loan," and also known in some applications as a swing loan. In South African usage, the term bridging finance is more common, but is used in a more restricted sense than is common elsewhere.
Real estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of prices, supply, and demand. The closely related field of housing economics is narrower in scope, concentrating on residential real estate markets, while the research on real estate trends focuses on the business and structural changes affecting the industry. Both draw on partial equilibrium analysis, urban economics, spatial economics, basic and extensive research, surveys, and finance.
Subdivision is the act of dividing land into pieces that are easier to sell or otherwise develop, usually via a plat. The former single piece as a whole is then known in the United States as a subdivision. Subdivisions may be simple, involving only a single seller and buyer, or complex, involving large tracts of land divided into many smaller parcels. If it is used for housing it is typically known as a housing subdivision or housing development, although some developers tend to call these areas communities.
Land development is altering the landscape in any number of ways such as:
Construction management (CM) is a professional service that uses specialized, project management techniques to oversee the planning, design, and construction of a project, from its beginning to its end. The purpose of CM is to control a project's time / delivery, cost and quality—sometimes referred to as a project management triangle or "triple constraints." CM is compatible with all project delivery systems, including design-bid-build, design-build, CM At-Risk and Public Private Partnerships. Professional construction managers may be reserved for lengthy, large-scale, high budget undertakings, called capital projects.
Environmental planning is the process of facilitating decision making to carry out land development with the consideration given to the natural environment, social, political, economic and governance factors and provides a holistic framework to achieve sustainable outcomes. A major goal of environmental planning is to create sustainable communities, which aim to conserve and protect undeveloped land.
Farmland development rights in Suffolk County, New York began in 1975 in Suffolk County as the state of New York began a program to purchase development rights for farmland to insure they remained as farms and open space rather than being developed for housing.
Off-plan property is a property before a structure has been constructed upon it. Pre-constructions are usually marketed to real estate developers and to early adopters as developments so that the purchaser can secure more favorable finance terms from their lenders
Vancouverism is an urban planning and architectural phenomenon in Vancouver, British Columbia, Canada. It is characterized by a large residential population living in the city centre with mixed-use developments, typically with a medium-height, commercial base and narrow, high-rise residential towers, significant reliance on mass public transit, creation and maintenance of green park spaces, and preserving view corridors.
In the field of architecture an architectural plan is a design and planning for a building, and can contain architectural drawings, specifications of the design, calculations, time planning of the building process, and other documentation.
An urban planner or an urban planning engineer is a professional who practices in the field of urban planning.
Eynesbury is a locality of Victoria, Australia, 44 km west of Melbourne's Central Business District, located within the Cities of Melton and Wyndham local government areas. Eynesbury recorded a population of 2,577 at the 2016 Census.
Louis Myerberg Dubin is a fourth-generation real estate developer who develops upscale condominiums, typically in large east-coast United States cities. He is a founding partner of Redbrick LMD, an opportunistic real estate investment and developments company headquartered in Washington, D.C. His former New York based firm Athena often sold condominiums to middle and upper-middle class buyers. His firm converted landmark buildings into luxury condominiums, some of which were bought by luminaries such as Charles Bronfman. He designed buildings to feature art by artist-sculptors such as Jonathan Cramer. He was described by New York Magazine as being one of the "new generation of uptown A-listers".
Sharif El-Gamal is an American real estate developer. He is the chairman and chief executive officer of Soho Properties, a Manhattan-based real estate company. El-Gamal came to international attention in 2010 for his role in the development of Park51, a planned Islamic community center and prayer space to be located about two blocks away from the World Trade Center site.
Sandhurst Las Vegas is a cancelled high-rise condominium and mixed-use project that was planned for construction in downtown Las Vegas. The project was announced in October 2004, with the New Jersey-based Sandhurst Development as the developer. The project was designed by JMA Architecture and was to include a 35-story tower with 398 units. Two additional towers were also planned early in the project's history.
The Platinum is a 17-story, 255-unit condo hotel located at 211 East Flamingo Road in Paradise, Nevada, east of the Las Vegas Strip. The project was approved in 2003, and began construction in 2005, as a joint venture between Diversified Real Estate Concepts, Inc. and Marcus Hotels and Resorts. The project was topped out in December 2005, and was opened in October 2006. In 2009, buyers filed lawsuits against Marcus for various allegations; the last of the lawsuits were settled in March 2013.
Club Renaissance was a proposed 60-story condominium tower that would have been built in downtown Las Vegas, Nevada. Besides residential units, other features would include office space, retail, and restaurants. The project was announced in January 2005, and construction was originally scheduled to begin later that year.