Tips For the Real Estate Commercial Developer

As financial markets crash and credit crunches even tighter, today’s real estate commercial developer is faced with an ever growing number of challenges. Still, for the smart developer, hitting it big is quite feasible. It all comes down to the strategy a developer chooses to take.

While home commercial and development is down all over the place, commercial construction continues. The difference in today’s market, however, is that developers are finding themselves catering to “sure things” or they are holding out for the turnaround in the markets that will no doubt come.

To enjoy better than average chances for success in commercial development of real estate in today’s market, these tips can help:

  • Buy now, build later – Many commercial developers are taking advantage of today’s low prices to stake out land for future development. While this approach will require the capital and patience to hold on to land for some time, it can pay off down the road with big returns. Just think of the “land barons” of yesteryear. They bought cheap, held out and then developed when prices were through the roof.
  • Seek out big-name tenants before construction – Some real estate developers on the commercial end are continuing to build like nothing has happened with the markets. This is because they’ve found anchor tenants that can float a development with ease. Large, well-known stores, big companies and so on can all serve to supercharge a commercial development. Sign them on in advance and a project can succeed in today’s marketplace. What happens in commercial retail development, for example, is that the big anchors draw in other, smaller tenants so occupancy tends to be where it is supposed to be at opening.
  • Seek out government contracts – While retail/commercial development takes a special touch in today’s market, developments that happen to have government anchors are continuing to shine. As government scrambles to keep more people working, its construction projects are continuing. Real estate developers that want a “sure thing” in today’s market are finding government contracts are worth looking at. Keep in mind that even small governments, such as municipalities, still have construction needs. These agencies tend to be very good tenants for the real estate commercial developer.