What is commercial real estate development?
In simple terms, commercial real estate development refers to the construction of buildings for commercial means. Typically, commercial property developers lease their properties to a third party for financial profit. In some cases, a developer may sell the building to another investor quite quickly after construction if they identify a good opportunity to make a fast profit. More commonly, though, developers hold their properties and lease them out.
If you’re a seasoned commercial property developer looking for a commercial property builder, Groove Properties would love to hear from you.
What are the types of commercial properties?
There are many types of commercial properties out there. When you consider that every business has unique operational needs, you get an idea of the different types of buildings that exist. The list is practically endless, from hotels and motels to retail stores and factories, from rental properties to hospitals. Here are some of the broader categories of work that commercial property developers may be involved with.
Warehouses and manufacturing
This category has an enormous range of buildings, from transport and logistics depots to food processing plants. Factories, industrial storage and large agricultural buildings also fall into this group.
Accommodation and housing
Many commercial property developers build different forms of accommodation and housing. This category includes hotels, motels, apartment buildings, units, townhouses, villas, and more. Some are commercial tourism ventures, while some are for private rentals. Either way, this is a popular form of commercial real estate development.
Medical facilities
Medical buildings require specialist real estate development skills. The unique requirements for GP clinics, day surgeries, dental clinics and other specialist medical facilities make this a niche market. Partnering with a team that has a proven commercial real estate development process for medical buildings is essential. Other buildings may include aged care facilities, hospitals, rehab facilities and many more.
Childcare and educational
You’ll also want to work with experienced professionals if you’re building an early learning centre, daycare centre, or any other specialist educational facility. The same goes for refurbishments or expansions for schools and larger buildings.
Retail and office
The rest of the commercial building types vary from clothing to restaurants and department stores to office buildings. However, they tie in together quite well because many larger commercial development projects include spaces for multiple uses. Specialist builders should do any mixed-use space design and construction.
Pre-development stage of commercial real estate development
While many people think that commercial property development builders only get involved during construction, you’ll be surprised to know that teams such as Groove Properties are involved much earlier. Before construction starts, a lot of work goes on behind the scenes, which is why developers and investors prefer working with commercial property development experts.
Site selection
Finding the right location for your commercial real estate property development is essential. Many factors, such as availability, price, size and geographical location, influence this. You’ll also need to consider zoning restrictions, local demographics, traffic flow and the overall suitability for a business of your type. For example, a coffee shop in an area with no surrounding businesses isn’t a good site selection.
Feasibility analysis
After you’ve found a site that you like, it’s on to the feasibility study. This is where you consider all aspects of the commercial property development process to determine if it is financially viable. Site surveyors play a big role here, but basically everything is considered, including all practical construction processes and financial matters. If the project looks profitable on paper, you can move to the next step.
Securing finance
Securing finance for a commercial real estate development project is a lot more complex than getting a regular home loan. Lenders want to know that you’ve considered every possibility and budgeted for everything, so it pays to have an experienced team around you when it comes time to secure finance.
Commercial property development process
The commercial development process may have drastically varying timeframes depending on the size and scope of the project. However, there is typically a standard process that most projects follow.
Planning and design stage
Once your project has the green light, it’s time to get deeper into the planning and development stage. This is where many professionals can become involved, including architects, civil engineers and even interior designers. Your project needs to be professionally planned to satisfy many financial requirements, and also for local building approvals.
Finding the right team
It is crucial that you work with a trusted commercial builder once all of your planning is done. Ideally, you’d work with a team like Groove Properties because we assist at all stages, not just construction. But regardless of who you choose, experience counts for a lot. Commercial building is much different from building houses, so always choose a team that understands the commercial real estate development process.
Construction stage
The construction stage is where all of your planning comes to life. Your building team takes care of everything, including hiring the trades professionals required to complete the project. It’s important to note that the construction phase also includes final handover and building approvals.
Leasing and property management
The final stage is leasing and property management. This isn’t necessary for everybody, as some commercial property developers sell properties not long after completion. Also, some developers have particular uses or tenants in mind. But for those who don’t, it’s important to find a reliable team to look after the leasing arrangements and ongoing property management. Groove Properties assists in this area, too, as part of our commitment to a full end-to-end commercial property development solution.
Need builders for commercial real estate development?
If you’re considering a commercial property development project, Groove Properties is here for you every step of the way. We’re not just builders. We’re property developers, too, so we know what’s required, from finding the right location to completing construction and even managing rental properties. As your leading commercial property construction experts, we ensure projects run smoothly, with you in the loop at every stage.
Discover a better way to manage commercial real estate development, and connect with Groove Properties today. From Spring Hill to East Brisbane and all surrounding suburbs, we’re the team you can count on.
