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. [1] Real estate development is different from construction or housebuilding, although many developers also manage the construction process or engage in housebuilding.
Developers buy land, finance real estate deals, build or have builders build projects, develop projects in joint ventures, and create, imagine, control, and orchestrate the process of development from beginning to end. [2] 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. [1]
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 who 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. The financial risks of real estate development and real estate investing differ due to leverage effects. [3]
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.
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. [4]
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. [5]
A homeowner association is a private, legally-incorporated organization that governs a housing community, collects dues, and sets rules for its residents. HOAs are found principally in the United States, Canada, the Philippines, as well as some other countries. They are formed either ipso jure, or by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision. The developer may transfer control of an HOA after selling a predetermined number of lots.
Personal finance is the financial management that an individual or a family unit performs to budget, save, and spend monetary resources in a controlled manner, taking into account various financial risks and future life events.
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.
Subdivisions are land that is divided into pieces that are easier to sell or otherwise develop, usually via a plat. The former single piece as a whole is then known 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.
The Urban Land Institute, or ULI, is a global nonprofit research and education organization with regional offices in Washington, D.C., Hong Kong, and London. ULI aims to help its members and their partners build more equitable, sustainable, healthy and resilient communities.
Mixed use is a type of urban development, urban design, urban planning and/or a zoning classification that blends multiple uses, such as residential, commercial, cultural, institutional, or entertainment, into one space, where those functions are to some degree physically and functionally integrated, and that provides pedestrian connections. Mixed-use development may be applied to a single building, a block or neighborhood, or in zoning policy across an entire city or other administrative unit. These projects may be completed by a private developer, (quasi-)governmental agency, or a combination thereof. A mixed-use development may be a new construction, reuse of an existing building or brownfield site, or a combination.
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.
Conservation development, also known as conservation design, is a controlled-growth land use development that adopts the principle for allowing limited sustainable development while protecting the area's natural environmental features in perpetuity, including preserving open space landscape and vista, protecting farmland or natural habitats for wildlife, and maintaining the character of rural communities. A conservation development is usually defined as a project that dedicates a minimum of 50 percent of the total development parcel as open space. The management and ownership of the land are often formed by the partnership between private land owners, land-use conservation organizations and local government. It is a growing trend in many parts of the country, particularly in the Western United States. In the Eastern United States, conservation design has been promoted by some state and local governments as a technique to help preserve water quality.
North Arm Cove is a suburb of the Mid-Coast Council local government area in the center of the Hunter and the southern extremity of the Mid North Coast regions of New South Wales, Australia. It is located adjacent to Port Stephens and extends well north of the Pacific Highway. The suburb is sparsely populated, with most of the residents living in the southern portion of the suburb.
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.
Development-supported agriculture is a nascent movement in real estate development that preserves and invests in agricultural land use. As farmland is lost due to the challenging economics of farming and the pressures of the real estate industry, DSA attempts to reconcile the need for development with the need to preserve agricultural land. The overall goal of DSA is to incubate small-scale organic farms that co-exist with residential land development, providing benefits to farmers, residents, the local community, and the environment.
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 in mixed-use developments, typically narrow, high-rise residential towers atop a wide, medium-height commercial base, significant reliance on mass public transit, creation and maintenance of green park spaces, and preserving view corridors.
René G. Lépine was a Canadian real estate developer and philanthropist. Lépine was the chairman of Groupe Lépine, a real estate development and investment firm he founded in 1953. He is widely considered one of the most influential French Canadian real estate developers of his time. His companies developed over $5 billion of real estate in Canada and the United States since the 1960s. He also owned a portfolio of multifamily and retail properties in Montreal and Ottawa. Lépine developed many buildings considered landmarks in Montreal, including the Olympic Village and Le Sanctuaire du Mont-Royal. Lépine is also credited with having developed the first condominiums in Montreal in 1981.
A site plan or a plot plan is a type of drawing used by architects, landscape architects, urban planners, and engineers which shows existing and proposed conditions for a given area, typically a parcel of land which is to be modified. Sites plan typically show buildings, roads, sidewalks and paths/trails, parking, drainage facilities, sanitary sewer lines, water lines, lighting, and landscaping and garden elements.
Eynesbury is a locality in Victoria, Australia, 44 km (27 mi) west of Melbourne's Central Business District, located within the Cities of Melton and Wyndham local government areas. Eynesbury recorded a population of 2,838 at the 2021 census.
Graduate real estate education is the study of real estate development at the graduate school level. It has taken many forms, giving rise to various educational models in different countries.
Irvin J. Kahn (1916–1973) was an American attorney and real estate developer who played a major role in the expansion of the city of San Diego in the 1950s, 1960s, and 1970s. He received frequent press coverage for his ongoing role in developing Clairemont, University City and Rancho Peñasquitos. He is also notable for having built one of the first skyscrapers in downtown San Diego.
Real estate is property consisting of land and the buildings on it, along with its natural resources such as growing crops, minerals or water, and wild animals; immovable property of this nature; an interest vested in this (also) an item of real property, buildings or housing in general. In terms of law, real relates to land property and is different from personal property, while estate means the "interest" a person has in that land property.
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.
Rhodes Ranch is a master-planned community and golf course located in Spring Valley, Nevada, approximately six miles southwest of the Las Vegas Strip. It was developed by Jim Rhodes. The community was announced in 1996, after Rhodes gained 1,330 acres (540 ha), some of it through the Bureau of Land Management. At the time, much of the surrounding area was rural, and nearby residents opposed the development of the land. Despite the opposition, the Rhodes Ranch project was approved and began construction.