Casa moderna

GROUND UP DEVELOPMENT

Ground Up development is the construction of a real estate asset completely from scratch. The starting point is either raw, undeveloped land or the complete tear-down of any existing structure.

This is one of two general types of construction projects. The other is a renovation, in which contractors rebuild some of the structure’s components, but leaves some or most structural elements intact.

Real Estate Development Process

Real estate development is about taking ideas on paper and turning them into real property. It’s a process that delivers a product in order to meet some form of consumer demand. But the development process is intricate.

Real estate development involves participation from a wide variety of professionals, including: architects, landscape architects, civil engineers, site planners, attorneys, environmental consultants, surveyors, title companies, lenders, architects, general contractors, and subcontractors, amongst a variety of others.

The real estate development real estate process is divided into three mane stages:

Market Considerations:

 

The goal of each development is to ensure its success, to achieve this we know that planning is the most important stage, so we carry out a comprehensive structure that guarantees the viability of each process.


The commercial strategy includes the following points:


Demographic and urban analysis


Objective: Identify and quantify market opportunities quantitatively, from a demographic, economic, urban and regulatory point of view


Main activities:

 

  • Population dynamics analysis

  • Analysis of housing dynamics

  • Analysis of socioeconomic status and capacity to purchase housing

  • Determination of the area of ​​influence

  • Analysis of the main economic variables of the city and its relationship with the region

  • Matrix analysis of compatible uses

  • Analysis of the regulations applicable to the property subject to analysis (land use, COS, CUS, etc.)

  • Determination of buildable potential

Bid Analysis


Objective: To identify qualitatively and quantitatively the comparable offer and the possible competition for the projects subject to analysis.


Main activities:

 

  • Unit price analysis (sale-housing / income and services trade)

  • Price analysis per m² (sale-housing / rent-trade and services)

  • Analysis of salable areas - housing / commerce and profitable services

  • Occupancy Percentages

  • Analysis of services / services

  • Analysis of total units (housing-commerce-services)


Demand Analysis


Objective: Identify the main purchase motivators, as well as the profiles and volume of potential buyers of new homes completed to define the development potential of the projects subject to analysis.


Main activities:

 

  • Analysis of the main motivators for the purchase of new homes completed in the area of ​​influence

  • Profile analysis of potential buyers of new homes completed in the area of ​​influence

  • Development of scenarios to determine the potential development demand of each of the changes identified

  • Justification of the expected market share

Determination of the scope and best use of the land


Objective: To validate the commercial potential of the preliminary projects subject to analysis, as well as determine the combination of new finished housing products that generate the best commercial strategy for the company and the client.
 

Main activities:

 

  • Based on the previous phases, the scenarios of the combination of real estate products that improve the value of the business and minimize the risks of executing a new project to develop in the property subject to analysis will be determined.

  • Generation of product mix scenarios.

  • Estimation of average monthly sales and absorption rates by product mix scenarios.

  • Calculation of income by reason of sale-housing / income-commerce-services by mixed product development scenarios.

  • Determination of the most profitable scenario with the lowest development risk based on the analysis of parametric flows.

 

Financial analysis


Objective: To estimate the main indicators of profitability and cash flows, as well as generate sensitivity scenarios and elaboration of a decision tree.


Main activities:

 

  • Definition of at least 3 viable scenarios for the asset under study, including real estate concepts that will be analyzed in terms of their potential profitability.

  • Based on the parameters estimated in the previous stage, we will analyze the scenarios through the projection of cash flows and calculate the main profitability indicators.

  • Sensitivity analysis.