Italicized page numbers indicate figures, photos, and illustrations.
Bold page numbers indicate feature boxes.
A
Absorption: and industrial development, 288; and land development, 77; and multifamily residential development, 156, 157–58; and office development, 245, 246
Acacia Capital, 311
Accessibility: of industrial development, 289, 302–3; of multifamily residential development, 162; of office development, 248; of retail development, 342, 347, 350
Accrued return balance, 212
Action plan, 39
Adams & Central [Los Angeles, California], 79, 337
Adaptive use. See Redevelopment/rehabilitation
Adjustable-rate mortgages, 205, 208
Advertising. See Marketing; Public relations
Advertising agencies, 62–63. See also Public relations agencies
Aerial photos, 115
AEW Capital Management, 309
Affordable housing, 148, 194, 289; government programs, 217–19; and immigrants, 382–83
Agglomeration, 289
Aging population: and development industry trends, 381–82; and multifamily residential development, 147, 150, 155
Air-conditioning units, 196, 199, 307. See also HVAC systems
Airport proximity, 289, 304
Air quality, 307, 385
Alaska, 304
Alexan Midtown [Sacramento, California], 162
AllianceFlorida [Jacksonville, Florida], 310
Alterra [La Mesa, California], 161
Amenities: and development industry trends, 381–82; and industrial development, 303, 316; and market analysis, 245; and multifamily residential development, 196–97; and office development, 243
American Institute of Architects (AIA), 44
American Land Title Association (ALTA), 53, 59
American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), 258
American Society of Landscape Architects, 47
Americans with Disabilities Act (ADA), 350
Ameriplex [Nashville, Tennessee], 316, 321–25
Anchor tenants, 338, 348, 350, 360–61, 362, 364
Apartment development: condominium development vs., 200; and development process, 23; and financing, 202, 203; leasing, 223–25; preleasing, 65, 223; stages of development and timeline, 23, 29; timeline for, 23, 29, 150. See also Multifamily residential development
Appraisers and appraisals, 57, 177, 204, 308
Approvals: advice about, 26; fees for, 298; of industrial development, 292, 297, 298; of land development, 94, 95; of office development, 260; of retail development, 335, 343–44. See also Regulatory issues; Zoning
Architects: compensation for, 46, 219; and energy efficiency, 258; guidelines for dealing with, 201; and lighting, 254, 257; and multifamily residential development, 193, 201, 219; and office development, 254, 257, 258, 261; and retail development, 347; role of, 43–46, 56, 57, 219, 266; and signs, 254. See also Landscape architects
Arms, Stephen, 11
Arterial streets, 117
Articles of incorporation, 143
Asbestos abatement professionals, 54
Assessment districts, 93
Asset management, 269–70
Atlanta, Georgia, 92, 225, 295
At-risk capital, 25, 28
Attorney’s role, 41, 57–58, 218, 361
August Park Apartments [Dallas, Texas], 220
Austin, Texas, 91
AvalonBay, 223, 225, 226, 227–28
Avalon Burbank [Burbank, California], 67
B
Baby boomers, 147, 150, 381–82
Back-of-the-envelope analysis, 173, 173
Balance sheets, 209
Baley, Bill, 354
Ballantyne Corporate Place [Charlotte, North Carolina], 53, 262
Balloon payments, 204
Banks, 204, 261. See also type of bank
Barzilay, Adam, 197
Barzilay, Zvi, 380
Bascom Group, 216–17
Base maps, 115
Bathrooms, 198, 256
Bay depths, 251–52, 252, 303–4, 347
Bayshore Town Center [Glendale, Wisconsin], 367, 367–71
Bedrooms, 198, 199
Before-tax computation and financial feasibility, 102–3
Bethel Commercial Center [Chicago, Illinois], 30
Bhumgara, Raymond, 295
Bidding by contractors, 54–56
Big-box stores, 328, 329
Bijou Square [Bridgeport, Connecticut], 192–93
Billboards, 228, 267
Biltmore Park Town Square [Asheville, North Carolina], 50, 76
Bioretention basins, 120, 122
BOMA. See Building Owners and Managers Association
Bonding, 59–60
Bonds. See specific type of bond
Bonus clauses for contractors, 56
Boulder, Colorado, 250
Boundaries between municipalities, 156
Boundary surveys, 52, 116
Brick construction: multifamily residential development, 197; office development, 253; retail development, 352
Brochures, 223, 226–27, 315
Brodsky, Michael, 10
Brokers. See Real estate brokers
Brownfields, 52, 92, 295
Budgets: construction price estimator to prepare, 55; land use, 97, 97–98; marketing, 133–34, 223–25, 314, 315, 364; and office development, 260, 269
Building categories: industrial development, 284, 284–87; office development, 239–40, 241; retail development, 327, 331
Building codes: for multifamily residential development, 167, 199; for office development, 242, 248–49, 259; for retail development, 356
Building configuration and retail development, 347–48
Building Owners and Managers Association (BOMA), 245, 250, 254
Building permits, 200, 201, 260, 344, 356
Building shape, 249, 251
Building shells/skin system, 253–54, 255, 318, 352–54
Building types: industrial development, 284, 284–87, 305; office development, 239. See also Building categories; specific type
Build-to-suits, 240, 267, 356
Bullet loans, 205, 206–7, 264
Bureau of Labor Statistics, 338, 339
Business centers, 197
Business parks, 240, 283–84; categories of, 287; financing, 308–14; infrastructure, 292; site design, 300–308; zoning, 297. See also Industrial parks
Buyouts of tenants, 361
Bylaws, 143
By-right districts, 297
C
CAD (computer-aided design), 193
California: coastal land and development regulation, 87, 89; condominium conversions, 167; and development industry trends, 378, 379, 381, 385; environmental issues in, 385; growth controls, 90; industrial development in, 293, 296, 297, 317; negotiation of development agreements, 298; office development in, 243; regulatory issues, 87, 89, 90; security systems, 199; site acquisition process, 80, 83; subdividing land, 73, 89; transit-oriented development (TOD), 166. See also specific cities and developments
Call centers, 226
Capital costs of retail development, 344–45, 346
Capitalization. See Simple capitalization
Carpeting, 198
Carports, 195–96
Cascade Village [Akron, Ohio], 134, 221
Casey, George, 10
Cash calls, 214
Cash distribution priorities, 129, 130
Cash flow: and developer’s integrity, 392; and development industry trends, 392; and industrial development, 309–10. See also
Cash flow analysis; Discounted cash flow (DCF) analysis
Cash flow analysis, 96; sale of property, 231–32. See also Discounted cash flow (DCF) analysis
Cash-on-cash return, 173, 173, 216
Category-killer stores, 329, 331
CDEs (Community Development Entities), 219
Ceilings: industrial development, 285, 303–4; office development, 252, 257; retail development, 354
Census of Retail Trade, 339
Central business district (CBD), 240
Century West, 210, 216
Certificate of completion, 46
Certificate of occupancy, 357
Chaffin, Jim, 389–91
Chandler, Mac, 335
Change orders, 55, 201, 220
Charlesbank Capital Partners, 311
Charrette, 115
Checklists: landscaping of business park, 302; site acquisition, 81
Chen, Derek M.D., 216
Chicago: and development industry trends, 381; office development, 243, 249
Cities: incentives to work with developers, 378; industrial development, 294, 295; and industry development trends, 381, 382–83, 392; office development, 240, 242–43, 248, 272; retail development, 334–35, 348. See also specific city by name
Citizen opposition. See Community groups/ neighbors
Civil engineers, 48, 293
Claritas, 341
Class A space, 233, 239, 245, 252
Class B space, 239
Class C space, 239, 245
Clawback, 311
Clean Air Act, 294
Cleanup of hazardous materials, 52, 54, 288, 292–93, 295, 319, 353, 385
Clean Water Act, 294
“Climate Change, Land Use, and Energy” (ULI), 383
Closing: ability to extend, 84, 160; multifamily residential development, 209–10; site acquisition, 80, 81
Clubhouses, 197
Cluster developments, 111, 113, 289; and covenants, 141
CMBSs. See Commercial mortgage–backed securities
Collector streets, 117, 118
Colocation, 289
Comcast Center [Philadelphia, Pennsylvania], 238
Commercial banks, 66, 204
Commercial mortgage–backed securities (CMBSs), 68, 261, 314, 358, 376
Commissions, 61–62, 61–62, 83, 133, 268, 316, 319
Commitments, 202, 203, 209–10; forward commitment, 264
Commodity shopping centers: categories of, 331; defined, 327; and design, 347–48; and development opportunities, 334–35; and price/convenience equation, 331, 334. See also Retail development
Common space, 141, 142, 143
Community associations. See Homeowners associations
Community Development Entities (CDEs), 219
Community groups/neighbors: and development industry image, 388; and development industry trends, 388, 392; and industrial development, 292, 297, 319; and land development, 94–96, 142–43; and multifamily residential development, 201; and retail development, 335, 343; and social objectives, 388, 392
Community shopping centers, 331, 348, 355, 362. See also Retail development
Commuting. See Transportation issues; Travel time
Compensation: and development firms, 36–39; equity as, 36, 38; National Real Estate
Compensation Survey (2011), 37. See also
Commissions; specific type of consultant or contractor
Competition in development industry, 133, 376
Completion bonds, 60
Comprehensive Environmental Response, Compensation, and Liability Act, 294
Computer-aided design (CAD), 193
Concrete structures, 253, 304, 306, 352
Concurrency statutes, 377
Condition of premises clause, 270
Condominium associations. See Homeowners associations
Condominiums: closings, 210; conversions, 167; defined, 148; financing, 202; laundry facilities, 198; sales incentives, 224–25; vs. rental apartments, 200. See also Multifamily residential development
Conduit loans, 205, 208, 314
Consolidation of development industry, 376, 377
Constitution Square [Washington, D.C.], 55
Construction bonds, 59–60
Construction costs: of multifamily residential development, 149–50; of office development, 251; and site conditions, 251
Construction documents, 45–46
Construction fees, 214, 298
Construction financing, 65, 66–71; advice about, 26; and commitments, 202, 203; and concerns of lenders, 69–70; and contractors’ purchase terms, 127–28; and draws, 203, 221; and fees, 214; and forward commitments, 264; industrial development, 308–9; and inspections, 220–21; and interest/interest rates, 202–5, 203; land development, 126; and liens, 204; multifamily residential development, 202–5; office development, 262–63; open-ended, 203; percent completion, 204; and permanent financing, 202–3, 204, 205–8; and points, 203–4, 263; and risk, 209; sources of, 66–71 Construction Indus. Ass’n v. City of Petaluma (1975), 90
Construction managers, 219–20
Construction stage: advice about, 26, 131–32; and development industry trends, 379–80; and development team, 219; development team for, 41, 130; example of, 138–40; industrial development, 300–308; land development, 130–32; monitoring, 260; multifamily residential development, 219–22; and R&D, 301; residential development, 130–32; retail development, 356–57; and technology, 379–80; tenant-finish construction, 356–57. See also Contractors
Construction survey, 53
Consultants, 31, 39–43, 56–57. See also type of consultant
Consumer price index (CPI) clauses, 269
Contingencies in purchase contracts, 82, 293
Contingency fee, splitting of, 56
Contractors: advice about, 131; bids of, 54–56; bonding, 59–60; and budgets, 55, 56; commitment letter of, 127; compensation of, 55–56; and design issues, 55; and incentive bonuses, 56; and multifamily residential development, 1 50–51, 201–2; notice of dissatisfaction with, 131; and office development, 260; precommitments of, 127; purchase terms of, 127–28; role of, 54–56; selection of, 39–43; and tenant improvements, 260. See also Construction costs
Contracts. See specific type of contract
Control as negotiation issue in industrial development, 311
Convenience shopping centers, 331, 350, 360–61. See also Retail development
Convertible mortgages, 205, 264
Cooperatives, 148–49
Core factor, 255
Cork Factory [Pittsburgh, Pennsylvania], 166
Corporate parks, 287
Corus Quay [Toronto, Canada], 260
Cosmopolitan on the Canal [Indianapolis, Indiana], 65
Cost approach to appraisals, 57
Cost-plus-fee contracts, 55–56
Costs: and approvals, 388; dead deal cost, 311; and design issues, 200; and development industry trends, 388; and land development, 111–12, 124; and multifamily residential development, 171, 172–73, 233; and protective covenants, 141; and site acquisition, 80. See also specific type of cost
Courtyard buildings, 194, 197
Covenants. See Protective covenants Credit companies, 68
Credit freeze, 241–42
Critical path analysis, 25
Cross collateralization, 311
Culs-de-sac, 111, 122, 302
Culverts, 120
Cumulative/noncumulative return, 212, 215
Custom-designed houses, 133, 134, 135
Cycles in real estate industry, 15–17, 16
D
Dallas, Texas: multifamily residential development, 160, 164, 220; multitenant warehouse, market analysis, 290–91; protective covenants in, 141, 142
Data books, 356
Daycare centers, 196
Dead deal cost, 311
Deeb, Elias, 11
Deed of trust, 83
Deed restrictions. See Protective covenants
Defaults, 202, 266
Demand. See Supply/demand
Demographic characteristics: and development industry trends, 381; and multifamily residential development, 154–56; and retail development, 338
Density: and land development, 97, 97, 111–12, 124–25; and retail development, 341–42. See also Zero-lot-line houses; name of specific product type
Denver, Colorado, 272, 274, 274–78, 276
Design, 110–25; and accessibility, 301–2; advice about, 26, 261; and costs, 200; and development industry trends, 379–80; development team for, 41; example of, 139; flexibility in, 248, 251; guidelines for, 113; industrial development, 300–308, 318; land development, 141; and leasing, 260–61; multifamily residential development, 191–202; office development, 251–61; and R&D, 286, 301; and redevelopment/rehabilitation, 287–88; retail development, 347–56; sensitivity, 113; and social responsibility, 387; of subdivisions, 110–25; and technology, 379–80. See also Exterior design; Interior design; Site planning
Design-award-build contracts, 46
Design review boards, 201
Design review committees, 141
Developer off-site bonds, 60
Developers: advice for beginners, 8–9, 18–21, 26–27, 389–91; backgrounds of, 6–8, 10–11, 18–21; characteristics/activities of, 3–6; definition of, 14; and homeowners associations, 143–44; liability of, 203, 204, 209; personal guarantees of, 209; personal integrity of, 392; as property managers, 63, 64; reputation and credibility of, 64–66, 69, 202; requirements for success for, 5–7; small developers, 376
Development: major parties involved in, 387; types of, 4. See also specific type of development
Development firms, 33–39; compensation, 36–39; life cycles of, 34–35; organizational structure, 36; role as development managers, 14
Development industry trends, 373–93; advice about, 389–91; and changing market factors, 373–76; cities vs. suburbs, 381, 382–83; and community support, 388, 392; consolidation trend, 376, 377; and construction stage, 379–80; cycles in, 15–17, 16; and design, 379–80; and environmental issues, 384–86; financing, 376–77, 380–81; and infrastructure, 377–78; and Internet, 379–80; and marketing, 380; public image of, 388; and regulatory issues, 378–79; restructuring of, 374; and site acquisition, 379; and smart growth, 383–84; and social responsibility, 387–88, 392; and technological development, 379–81; and transportation issues, 387
Development period, 17, 22, 168, 169, 179
Development process: exposure over time, 28; management of, 14–17, 22–25, 28; predevelopment, 22, 74; real estate service firms’ role, 56–64; and risk, 14–15, 22–25, 28; stages of, 17, 22–25, 28, 41. See also Getting started; specific stage in the process
Development rights, 378–79
Development team, 31, 43–54, 219; construction stage, 43, 130; participants, 41; site planning, 114–15. See also specific stage of development process or specific type of member
Direct-mail advertising, 267
Disabled persons, access for. See Accessibility
Discounted cash flow (DCF) analysis: and industrial development, 300; and inflation, 102; and land development, 96, 100, 102–10, 103–9; level of detail for, 102; and loan repayments, 102; monthly analysis during development period, 187–88; and multifamily residential development, 174–76, 177–79, 178; and occupancy/vacancy rates, 177, 178, 179; time periods for, 102, 177, 178–79; and timing of sales, 102
Discount rates, 13
Distribution buildings. See Warehouses Dolan v. City of Tigard (1994), 88
“Dollar stop” clauses, 269
Dominant tenement, 164
Downpayments, 127
Downside liabilities, 214
Downtown @ 700 2nd [Albuquerque, New Mexico], 372
Drainage, 118–20, 132, 307. See also Infrastructure
Draws, 203, 221, 308
Due diligence, 81, 292–93, 311, 379, 385
E
Early suppression, fast response (ESFR) equipment, 307
Earnest money: during development stages, 23, 28; and land development, 127; letters of credit as, 84; and site acquisition, 80, 82, 84
Earnout provisions, 264
Earthquake areas, 304, 319
Easements: in gross, 164; and land development, 97; and multifamily residential development, 164, 165; and protective covenants, 141; and site planning, 124, 125; view easements, 386
Easton Town Center [Columbus, Ohio], 330, 330
Echo boomers, 147, 148, 233
Economic feasibility, 26
Economy and real estate crash of 1980s and early 1990s, 373–74. See also Financial crisis (2008–2009)
Edge cities, 272
Edgeless cities, 272
Edmond, Tim, 90
Efficiency ratio, 255
Eichenstein, Izzy, 317
Eichholtz, Piet, 242
EIFS (exterior insulation finishing system), 353
Electrical engineers, 48, 254, 257
Electric utilities. See Utilities
Elevators and office development, 256 11000 Equity Drive [Houston, Texas], 272, 279–80, 279–81
Ellison, James, 10 Emerging Trends in Real Estate 2010 (ULI), 376
Energy Independence and Security Act, 256
Energy issues: green buildings, 242, 259, 379; office development, 242, 249, 256, 258–59, 271; retail development, 352, 354; tax credits, 256
Energy Star, 49, 242, 271
Engineers and engineering, 47–49, 131, 132; advice about, 26; feasibility, 293–95; on site, 131, 132. See also specific type of engineer
Engstrom, Bob, 389–91
Enterprise zones, 299
Entrances, 117, 228, 302, 350
Environmental consultants, 49–52
Environmental impact report (EIR), 51–52, 91, 92, 295
Environmental impact statement (EIS), 51, 91, 92
Environmental issues: and citizen opposition, 388; and development industry trends, 384–86; example of, 138–39; industrial development, 294–95; land development, 91–93, 112, 113–14; multifamily residential development, 164; retail development, 342, 344; and site planning, 112, 113–14
Environmental Protection Agency (EPA), 54, 92, 119
Equity: advice about, 26; as compensation, 36, 38; and fees, 213–14; and financial backing for construction, 66; and financial feasibility, 96; and industrial development, 308, 309; and joint ventures, 128–30; and multifamily residential development, 202, 210–14; and office development, 264–66; phantom equity, 36, 38; and retail development, 358, 359; return on, 103, 110, 178
Escrow, going into, 80
Estate houses, 124
Estimating market share, 339, 340
Exactions, 51, 93, 167–68, 377–78
Exclusive right-to-sell listing, 61
Existing buildings, 164. See also Redevelopment/rehabilitation
Expense stop leases, 268–69 Experience Exchange Report (BOMA), 245, 250
Exterior design: industrial development, 285, 286, 304, 306, 318; and lighting, 254, 351–52; multifamily residential development, 197–98; office development, 253–54; retail development, 352–54
Exterior insulation finishing system (EIFS), 353
F
Fahmy, Stewart, 375
Family firms, 35
FAR. See Floor/area ratio
Farmer, David, 160
Fascitelli, Mike, 389–91
Fast-track approach, 46, 55
Feasibility studies: development team for, 41; and site acquisition, 82. See also Project feasibility; specific type of study
Federal Emergency Management Agency (FEMA), 119
Federal National Mortgage Association (FNMA), 137, 205, 218, 375
Federal programs, 217–19
Federal Reserve Board’s Index of Manufacturing Output, 296
Fees: construction, 214, 298; and development industry trends, 388; and equity, 213–14; and financing, 93–94; front-end, 214, 214, 216; homeowners association fees and assessments, 142; and land development, 93–94; leasing fee, 214; and maintenance, 142; and multifamily residential development, 213–14; referral, 229; sales fee, 214. See also Points; specific type of fee
FEMA (Federal Emergency Management Agency), 119
FHA (Federal Housing Administration), 132, 137
Fifth and Alton [Miami Beach, Florida], 352
Financial crisis (2008–2009) see also Great Recession (2007–2009): and commercial
Mortgage–backed securities (CMBSs), 68; and compensation, 39; and construction financing, 263, 264; and equity, 110, 262, 264; explanations for, 374–75; and industrial development, 283; lessons of, 159, 208, 375, 389–91; and mezzanine financing, 69; and multifamily residential development, 150, 167, 232–33; and office development, 239, 240–41, 261–62, 263, 264, 272; and small developers, 376; and supply/demand, 24
Financial feasibility: advice about, 190–91; and before-tax computation, 102–3; data for, 300; detail level in, 102; and go/no-go decision, 191; gross vs. net developable acres, 97; of industrial development, 300; and inflation, 102, 110; and joint ventures, 188, 189, 190; and leasing, 178–79, 360; and lot yield, 96, 97; of multifamily residential development, 168–91; of office development, 250; and present value, 98–99, 99; and quick and dirty analysis, 96, 99–100, 101; of retail development, 344–47; and return, 96, 103, 106, 108–9, 110; and risk, 110; stages of determining, 168–91. See also Cash flow analysis; Discounted cash flow (DCF) analysis; Equity
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 204
Financial management, 365–66, 318
Financing: advice about, 26, 128; analysis required for, 23; and appraisals, 204; calling the loan, 203, 209; and capitalization rates, 250; and closings, 209–10; and developers’ credit, 203, 204; and development industry trends, 376–77, 380–81; and development process, 23–24; development team for, 41; example of, 140; and fees, 93; and first deals, 12–14; and government programs, 217–19; and industrial development, 308–14; of infrastructure, 93–94; and inner cities, 358; and land development, 93–94, 125–30; and letters of credit, 126, 127, 213; and multifamily residential development, 148, 202–19; obtaining, 126–28; and office development, 241–42, 261–66; and pass-through expenses, 263, 364; personal guarantees of developers, 209; and retail development, 357–59; and standby/forward commitments, 264; tax increment financing districts, 93; and technology, 380–81; and tenants, 210; types of, 24. See also Investors; Lenders; Site acquisition; name of type of lender/investor or specific type of financing
Finger, Marvin, 154, 165, 197, 232
Fink, Jerome A., 216
Fire codes, 122, 166, 195, 259, 294
Fire insurance, 259
Fireplaces, 198
Fire sprinklers, 259, 288, 307
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act), 204
First deals, 8–9, 12–14
First refusal rights of tenants, 317
Fixed-price contracts, 42, 46, 131, 132
Fixed-rate mortgages, 205, 208
Flexibility: and industrial development, 286, 304, 318, 320; and land development, 94; and office development, 248, 251, 271–72; and retail development, 342, 347, 359
Flex space, 239, 240, 286, 304, 320
Floating districts, 297. See also Planned unit developments (PUDs)
Floodplain permits, 119
Floodplains, 97, 119, 163, 294, 342
Floor/area ratio (FAR), 248, 249, 297, 343
Floors, 198, 304, 353
Florance, Andy, 242
Florida: and development industry trends, 381; growth management law, 90; regulatory issues in, 90; security systems, 199. See also specific cities and developments
Florida, Richard, 381
Focus groups, 133, 160, 339
Foreclosures, 202, 209, 266
Foreign investors, 67
Foreign trade zones, 289
For-sale property, 15, 96
Forward commitments, 264
Foundations, 304
Four Times Square [New York City], 259
Frank, Jerome J., Jr., 165, 199, 204, 221, 222
Frank Construction, 220
Franke Corporate Headquarters and Distribution Center [Smyrna, Tennessee], 282, 286, 299
Free-look periods, 80, 82
Freight facilities, 287
Frey, William H., 381
Frontage: retail development, 353, 355–56; site planning of, 117
Front-end fees, 214, 214, 216
Fuerst, Franz, 242
“Full stop” clauses, 269
Funded community trust, 142
Furniture plans, 201
G
Galatas, Roger, 90, 92
Garages, 123, 125, 195
Garbage disposal/collection, 137, 196, 198
Garden apartments, 148, 149, 194, 195, 223. See also Multifamily residential development
Garden office buildings, 239. See also Office development
Gated communities, 199
General contractors. See Contractors
Geographic information system (GIS) data, 88, 159, 379
Geology. See Site conditions
Getting started: and asset control, 8–9, 12, 12–14; development firms, 34; development process, 17, 22–25, 28
Gleitman, Richard, 211
Glendale, Wisconsin, 367, 367–71
Go decision, 23, 191 Golden v. Planning Board of Town of Ramapo (1972), 90
Goodell, James, 248
Google, 243, 379
Government programs, 217–19, 220–21, 299
Graaskamp, James, 8
Grading, 118, 132
Grayson, Chickie, 18
Great Recession (2007–2009). See also Financial crisis (2008–2009)
Greenbelt 5 [Manila, Philippines], 387
Green buildings, 242, 259, 379 The Green Quotient: Insights from Leading Experts on Sustainability (ULI), 383
Gross building area (GBA), 254
Gross construction area, 254
Gross developable acreage, 97
Gross leasable area (GLA), 349
Gross leases, 268, 268, 297, 317
Grossmont Transit Center [La Mesa, California], 161
Gross rent, 316
Growth issues, 34–35, 90–91; for development industry, 377–78; for multifamily residential development, 155; for retail development, 334–35; smart growth, 383–84
Guaranteed maximum cost contracts, 56
Guarantees of developers, 128, 209
Handicapped access. See Accessibility
Hasbrouck, David, 303, 317
Hawaii, regulatory issues in, 90
Hawthorne, Randolph, 149–50, 204–5, 218, 219
Hazardous materials, 52, 54, 288, 292–93, 295, 319, 342, 344, 353, 385–86
Heating. See HVAC systems
Heitman, 309
Hernandez, Tara, 18–19
Higgs, Roy, 330
Highland Park, Texas, 141
High-rise buildings, 148, 149, 194, 223, 255
High-tech firms, 240, 289, 292
Hines, Gerald, 376, 388, 389, 392
Historic preservation, 218–19, 249, 288
Historic tax credits, 218–19
Homeowners associations, 142–43, 144
Housing and Urban Development, U.S. Department of, 218
Housing revenue bonds (HRBs), 217
Houston, Texas: 11000 Equity Drive, 272, 279–80, 279–81; regulatory issues in, 92
Hudson Green [Jersey City, New Jersey], 32, 392
Hughes, Ken, 165–66, 197
Hughes, Phil, 4, 5 Humidity Control Design Guide for Commercial and Institutional Buildings (ASHRAE), 258
HVAC systems (heating, ventilation, and air conditioning): and industrial development, 288, 307; and life safety systems, 259; and multifamily residential development, 199; and office development, 242, 257–58, 259; and retail development, 354
Hyatt, Wayne, 143–44
Hybrid shopping centers, 335–36
Hydrology, 120, 163. See also Site conditions
Hypersupply, as part of market cycle, 15, 16
I
Illumination Engineering Society, 254
Image of development industry, 388
Immigrants, 147–48, 381, 382–83
Impact fees, 93, 96, 377–78; for industrial development, 298–99; for multifamily residential development, 168; for office development, 248, 250
Incentives: bonuses, 56; leasing or sale of multifamily residential development, 224–25; state and local, 299. See also Tax credits
Income approach to appraisals, 57 Income/Expense Analysis for Office Buildings (IREM), 245, 250
Income-producing properties, 14, 96
Incubation approach in industrial development, 287, 297, 320
Industrial development, 283–325; and absorption, 288; and accessibility, 289, 302–3; advice about, 283, 307–8; and amenities, 303, 316; Ameriplex [Nashville, Tennessee], case study, 321–25; and approvals, 292, 297, 298, 317; and budgets, 314, 315; building types, 284, 284–87, 305; categorization of, 284, 284–87, 305; and cities, 294, 295; and clustering, 289; and construction financing, 308–9; and construction stage, 300–308; data for, 300; deal size and flow, 311; due diligence, 292–93, 311; and engineering feasibility, 293–95; and environmental issues, 294–95; and equity, 308, 309; and exterior design, 285, 286, 304, 306; and fees, 298–99; and financial feasibility, 300; and financing, 308–14; flexibility in, 286, 304, 320; in foreign trade zones, 289; and hazardous materials, 288, 292–93, 295; history, 283–84; and HVAC systems, 288, 307; and incubation approach, 287, 297, 320; and infill sites, 292; in institutional property portfolios, 309; and landscaping, 302; and leasing, 316–19; and location, 289; and maintenance, 316, 318; and management, 317, 319; and market analysis, 288–89, 290–91, 295–97; and marketing, 314–17; multitenant, 286, 290–91; and neighbors, 292, 297, 319; and occupancy/vacancy rates, 288; and parking, 285, 286, 287, 301, 319; and permanent financing, 308–9; product types, 284, 284–87; and project feasibility, 288–99; and protective covenants, 295, 297–98, 315, 317, 319; and real estate brokers, 292, 314, 316; and redevelopment/ rehabilitation, 287–88, 295; and regulatory issues, 297–99; and rent, 316, 317, 318, 319; and return, 309–10; and risk, 311–14, 312–13; roofs, 306; and signs, 302; and site acquisition, 288–89, 292–93; site conditions, 292–93; and site coverage, 297; and site selection, 288–89, 292–97; and speculative development, 283; and streets/roads, 301–2; suburbanization of, 284; and supply/demand, 295–97; and target markets, 289, 314, 315; and technological development, 286–87, 320; and tenant improvements/finish-out allowances, 286, 317; and tenants, 285, 286, 316–19, 320; and traffic, 285, 294, 295, 301–2; trends in, 284, 320; and utilities, 292, 294, 315, 316; and zoning, 292, 297, 301. See also Business parks; Manufacturing; R&D (research and development)
Industrial development bonds, 299
Industrial market and multifamily residential development, 156
Industrial parks: defined, 287. See also Business parks
Infill sites: increase in number of, 148; industrial development, 292; office development, 240, 243; retail development, 341–42, 360; Rock Row [Los Angeles, California], 138, 138–40
Inflation, 13; and land development, 102, 110; and retail development, 339
Infrastructure: and development industry trends, 377–78, 387; financing of, 93–94; and growth issues, 90; and industrial development, 292; and land development, 90, 93–94; and social responsibility, 387. See also specific type of infrastructure
Inspections, 69; industrial development, 319; multifamily residential development, 220–21; retail development, 353
Installation date vs. shipping date for warranty purposes, 49
Institute of Real Estate Management (IREM), 64, 245, 250
Institutional investors, 148, 204, 309. See also specific type of institution
Insurance and insurance companies, 67, 69; and construction stage, 221–22; office development, 261; and subcontractors, 221–22. See also specific type of insurance
Interest/interest rates: calculation of, 203, 203–5; and construction financing, 202–5, 203, 263; and multifamily residential development, 147, 202–5, 203; and office development, 263, 264
Interior design: advice about, 261; and elevators, 256; and leasing, 223; and lighting, 198, 256–57; and multifamily residential development, 198–99; and office development, 254–61; and retail development, 355. See also Space; Tenant improvements (TIs)
Internal rate of return (IRR): industrial development, 300, 310; land development, 96, 103, 106–8, 110; multifamily residential development, 177–78, 212
International Council of Shopping Centers, 349
International trade zones, 289
Internet: and construction stage, 379–80; and design, 379–80; and marketing, 136, 223, 226, 227, 267, 315, 380; and retail development, 336
Investment and development, 14
Investors: concerns of, 214; as construction lenders, 68; joint venture with developer, 130; and multifamily residential development, 202, 214; types of, 74. See also Financing
IRR. See Internal rate of return
Issuers in conduit loans, 208
J
JAS Worldwide International Headquarters [Atlanta, Georgia], 249
Jefferson Pointe [West Chester, Pennsylvania], 152–53
Jerome Frank Investments, 160, 200
Joinder, 84
Joint ventures: advice about, 27, 213; with beginning developers, 31–33; as construction lenders, 68; and industrial development, 309–10; and multifamily residential development, 188, 189, 190, 210–17; and office development, 264; and risk, 128–30; structure of, 128–30
JPI, 205
Just-in-time delivery chain, 304
K
Kansas City, Missouri, 243
Kasdin, Neisen, 384
Kassel, Dan, 85, 113, 221, 392
Kellenberg, Steve, 386 Kelo v. City of New London (2005), 88
“Kickers,” 205
Kiefer, Matt, 52, 379, 383, 385, 388
Killoren, Don, 19–20, 373, 375
Kitchens, 198
Knott, John, 375
Kok, Nils, 242
Kotin, Allan, 247, 296
Krueger, G.U., 158
Kuchma, Philip, 192–93
L
Lake Nona [Orlando, Florida], 116
Land acquisition. See Site acquisition
Land development, 73–145; and absorption, 117; and approvals, 94, 95; and builder precommitments, 127; building development vs., 75; and cluster development, 111, 113, 289; and commercial development, 117; and community groups/neighbors, 94–96; and construction stage, 130–32; and costs, 80, 111–12, 124; and density, 97, 97, 111–12, 124–25; and design, 141; and drainage, 118–20; and environmental issues, 91–93, 112, 113–14; and exactions, 93; and financing, 93–94, 125–30; and flexibility, 94; and floodplains, 119, 163; and grading, 118; gross vs. net developable acres, 97; and growth issues, 90–91; industry structure, 74; and infrastructure, 90, 93–94; loans, 96; and location, 78, 79, 80; and lot yields, 96, 97; and low-impact development (LID) methods, 120–21; and maintenance, 136–37, 141–43; and market analysis, 75–78, 85–86; and marketing, 132–36; and model/spec houses, 134, 135, 136; and neighborhood, 78, 80; not developable land, 97; and planned unit developments (PUDs), 114; and platting, 123–24; predevelopment activity, 74; and project feasibility, 75–110; and protective covenants, 78, 137, 141–42; and regulatory issues, 74–75, 78, 79, 80, 87–96; and return, 96, 103, 110; and rights-of-way, 97; and site acquisition, 80–85; and site conditions, 78, 79, 80; and site evaluation, 78, 79–80; and site selection, 75–80, 85–86; and streets/ roads, 93, 111, 117–18; subdividing land, 73–75; and sustainability, 112; and titles, 81; and transportation issues, 92–93, 111; and utilities, 78, 79, 121–23; and zoning, 79, 87–91, 137. See also Subdivisions
Land notes, 82
Landowner in joint venture with developer, 129–30
Land planners, 47
Landscape architects, 46–47, 253
Landscaping: checklist, 302; and industrial development, 302, 318, 319; and multifamily residential development, 196–97, 228; and office development, 253; and retail development, 351, 352; xeriscaping, 197
Land use: budget for, 97, 97–98; planning, 98–99; and retail development, 347, 349; and smart growth, 383. See also Zoning
Large-volume builders, 133; development industry trends, 376
Larson, Robert, 376–77
Laundry facilities, 198
Lazard Frères, 376–77
Leadership in Energy and Environmental Design (LEED), 49, 239, 242, 243, 259, 271
Leasing: advice about, 27, 361; and development industry trends, 383; and financial feasibility, 178–79, 360; and industrial development, 316–18; and interior design, 223; and marketing, 364–65; and multifamily residential development, 223–25; and office development, 263, 266–69, 270; open listing, 268; and pass-through expenses, 263, 364; and pricing, 224–25; rates and terms, 269; and renewal of leases, 317; and retail development, 359–62; and tenant mix, 359–58; and termination of lease, 317; triple-net, 268, 297, 316, 317, 319, 362; types of leases, 268–69; use clause, 362, 364. See also Rent; Tenants
Leasing agents, 61–62, 223–24, 267–68, 360. See also Real estate brokers
Leasing office: Atlanta, Georgia, 225; for multifamily residential development, 197, 228; for office development, 267
Lee, Chris, 39
Lee, Tom, 384
LEED. See Leadership in Energy and Environmental Design
Legacy Place [Dedham, Massachusetts], 326, 351, 358
Lenders: advice about, 128; fees of, 66; joint venture with developer, 130; and regulatory issues, 92; role of, 64–65. See also Financing; specific type of lender
Letters of credit, 126, 127; as earnest money, 84; multifamily residential development, 213; office development, 263
Letters of intent, 80–81
Levanthal, Kenneth, 374
LID (low-impact development) methods, 120–21
Liens: mechanic’s liens, 48, 69; perfecting, 127; priorities, 83, 137, 204; waivers from subcontractors, 221
Life safety systems, 259
Lifestyle shopping centers, 330
Lighting: industrial development, 306; multifamily residential development, 198; office development, 254, 256–57; retail development, 351–52
LIHTCs. See Low-income housing tax credits
Listing agreements, 61
Lizotte, Nicholas, 209
Load factor, 255, 304
Loan commitment, 209–10, 263, 264
Loans. See Financing; specific type of financing
Local government: and development industry trends, 383. See also Cities; Government programs
Local streets, 117
Location: of industrial development, 289; and land development, 78, 79, 80; macrolocation, 160; microlocation, 160; of multifamily residential development, 160–61; of office development, 240, 272; of retail development, 334–35, 338. See also Site selection
Lockout provisions, 311, 314
Lockwood Place Retail [Baltimore, Maryland], 328
Logistics parks, 287
Lookback returns, 309, 310
Los Angeles: multifamily residential development in, 162; office development in, 249; residential development in, 138–40; retail development in, 335; Rock Row, 138, 138–40
Lot delivery, 127
Lothan, Avi, 271
Lot yields, 96, 97
Low-impact development (LID) methods, 120–21
Low-income housing. See Affordable housing
Low-income housing tax credits (LIHTCs), 148, 218
Low-rise buildings: multifamily residential development, 148, 149; office development, 240, 255 Lucas v. South Carolina Coastal Council (1992), 88
LULU (locally unwanted land use), 388
LumaCorp, 231
Lump-sum contract. See Fixed-price contracts
Luxury apartments, 150, 199
Lynch, Jair, 21
M
Mackie, Don, 135
Macrolocation, 160
Macy’s, 329
Mailboxes, 196
Maintenance: advice about, 27; industrial development, 316, 318, 319; land development, 136–37, 141–43; multifamily residential development, 193; office development, 258, 269, 270; retail development, 361, 364, 365
Malls. See Retail development
Management: advice about, 27, 232; approaches to, 365–66; and cash flows, 231–32; compensation for, 365; costs for, 269, 270; development team for, 43; and industrial development, 317; and multifamily residential development, 219–20, 229–32; and office development, 269–71; and retail development, 365–66; and selling the property, 231–32; and size of project, 229–30; staff, 230; and tenants, 231
Mansions, 124
Manufactured housing, 112
Manufacturing, 285, 294, 296, 306
Maps, 115, 116
Market analysis: advice about, 26, 151; and amenities, 245; and anchor tenants, 338; on appeal of design, 124; and builder precommitments, 127; capture rate, 86, 157; data for, 85–86, 288–89, 295–96, 337–40; definition of market, 86; employment and absorption rates, 86; guidelines for, 85–86, 158–59; importance of, 222; for industrial development, 288–89, 290–91, 295–97; for land development, 75–78, 85–86; for multifamily residential development, 151–59, 222; and niches, 17, 56, 151, 154, 314, 366; for office development, 241–42, 243–47, 244, 251, 266, 267; and project feasibility, 75–78; for retail development, 337–40; and supply/demand, 244–46, 245, 295–97, 337; and trade areas, 337–38
Market approach to appraisals, 57
Market consultants, 56–57
Marketing: advice about, 27; budgets for, 133–34, 223–25, 314, 315, 364; computer-aided design (CAD) to assist, 193; and development industry trends, 380; development team for, 41; example of, 140; and industrial development, 314–18; and land development, 132–36; larger parcels, 135–36; and leasing, 364–65; and location, 272; and market analysis, 222; and marketing plans/programs, 364–65; and marketing strategies, 222–23, 314–15; and model/ spec houses, 134, 135, 136; and multifamily residential development, 222–29; and office development, 266–69; over Internet, 136, 223, 226, 227, 267, 315, 380; and positioning, 364; postconstruction, 364–65; and price, 224–25; to the public, 134–36; purpose of, 222; and retail development, 364–65; and sales, 132–33; and size of project, 133, 135–36; staffing for, 229; strategy, 63. See also Leasing agents; Public relations agencies; Real estate brokers
Market research firms, 156, 159
Masonry construction, 253, 352, 353
Massachusetts: brownfields, 295; home rule state, 88; site acquisition process, 80. See also specific cities and developments
Materials, 253–54, 255. See also specific material
Math, John, 229
Mattingly, Jim, 231
Maturity of development firm, 35
McAllister, Patrick, 242
McCarl, Brian, 10
McCaslin, Tom, 259
McCoy, Buzz, 375
McMansions, 124
Mechanical engineers, 48, 258, 354
Mechanic’s liens, 48, 69
Merchandising, 136, 228, 267, 359–62
Merchant builders, 34
Metropolitan statistical areas (MSAs), 155
Mezzanine financing, 68–69, 208, 261–62
Michigan, 304
Microlocation, 160
Mid-rise buildings: apartments, 148, 149, 194, 223; office development, 240
Miller, Norm, 242
Miniperm loans, 66, 203
Minneapolis, 235, 235–37
Mixed-use development, 113, 384; busy streets in, 123; industrial development, 292, 295, 297; multifamily residential development, 166; office development, 239, 248
Mock-ups, 198
Model houses and rental units, 134, 135, 136, 223, 228
Mortgage bankers and brokers, 70
Mortgages: application package, 211; industrial development, 308–9; multifamily residential development, 205–8; office development, 264. See also Permanent financing; specific type of mortgage
Motor vehicles. See Streets/roads; Traffic
Mow, Harry, 210–11, 212, 216
MSAs (metropolitan statistical areas), 155
Mueller, Glenn, 15
Multifamily residential development, 147–237; and absorption rates, 156, 157–58; and accessibility, 162; advice about, 151, 196, 232; and affordable housing, 148, 217–19; and aging population, 147, 150, 155; and amenities, 196–97; and approvals, 200–202; and closings, 209–10; and construction costs, 149–50; and construction financing, 202–5; and construction stage, 219–22; and costs, 233; cyclical nature of, 147; and design issues, 191–202; and discounted cash flow (DCF) analysis, 174–76, 177–79, 178; and easements, 164, 165; and environmental issues, 164; and equity, 202, 210–14; and exactions, 167–68; and exterior design, 197–98; and fees, 213–14; and financial crisis (2008–2009), 150, 167, 232–33; and financial feasibility, 168–91; and financing, 148, 202–19; and fire codes, 166, 195; and go/no-go decision, 191; and government programs, 217–19, 220–21; history, 148; and impact fees, 168; influences on, 147; and inspections, 220–21; in institutional property portfolios, 148, 205; and interest/ interest rates, 147, 202–5, 203; and interior design, 198–99; and investors, 214; and joint ventures, 188, 189, 190, 210–17; and landscaping, 196–97; and leasing, 223–25; and liens, 204, 221; and maintenance, 193; and management, 219–20, 229–32; market analysis for, 151–59, 222; market demand for, 147; and marketing, 222–29; and model/spec units, 223, 228; and neighborhood, 160–61; and ownership, 148–49; and parking, 195–96; and permanent financing, 202–8; and pricing, 224–25; and private offerings, 214, 216–17; product types of, 148–50, 149, 194; and project feasibility, 151–91; and protective covenants, 141; and regulatory issues, 165–68; and rent, 233; and rent control, 166–67; and risk, 150, 209; scheduling of, 219–20; and site acquisition, 151; and site conditions, 162–64; and site planning, 195–97; and site selection, 159–68; and syndications, 210–17; and target market, 147–48; and tenants, 210; timeline for, 23, 29, 150; and unit mix, 194–95; and visibility, 162; and zoning, 165–66
Multiple for release price, 128
Multiple jurisdictions and regulatory issues, 88
Multiple Listing Service, 77, 380
Multitenant industrial development, 286; design, 303; leasing, 316; market analysis, 290–91
Municipal boundaries, 156
Munson, Mike, 259, 272
N
Nashville, Tennessee, 321–25
National Asbestos Council, 54
National Association of Realtors, 64
National Environmental Policy Act, 51, 294
National Flood Insurance Act, 294
National Real Estate Compensation Survey, 2011, 37
National Research Bureau (NRB), 341
Nature Conservancy, 386
Neely, Al, 89–90
Negotiated-price contracts, 131, 132
Negotiation of development agreements, 298
Neighborhood: and land development, 78, 80; of multifamily residential development, 160–61; preservation of sense of place, 384. See also Community groups/neighbors
Neighborhood revitalization. See Redevelopment/rehabilitation
Neighborhood shopping centers, 331, 348, 355, 357, 362; percentage rents, 362. See also Retail development
Net developable acreage, 97
Net leases, 268, 362
Net operating income (NOI), 170, 172, 308; pro forma NOI, 170, 172
Net present value, 177
Newsletters, 225, 267
Newspaper advertising, 223, 226, 227–28, 267
Newsum, Jeremy, 389–91
New urbanist approach, 111, 113, 114, 123
New York City: condominium conversions, 167; office development, 249; regulatory issues in, 136
Niches, 17, 56, 151, 154, 314, 366
NIMBY, 388
NOI. See Net operating income
Noise and sound buffering, 123 Nollan v. California Coastal Commission (1987), 88
Nonprofit programs for multifamily residential development, 217–19
Noonan, Vicky, 246, 272
Nordstrom, 329–30
North American Wetlands Conservation Act, 163
Note rates, 205, 210
“No-waste” clauses, 83
O
Occupancy/vacancy rates: calculating average occupancy rate, 172; and discounted cash flow (DCF) analysis, 177, 178, 179; and industrial development, 288; and multifamily residential development, 156, 173, 231, 232; natural vacancy, 246; and office development, 246; stabilized vacancy, 246
Occupational Safety and Health Act, 294
O’Donnell, John, 36
Offer to purchase, 80, 81–82
Office development, 239–81; and absorption, 245, 246; and accessibility, 248; advice about, 247; approvals, 260; and budgets, 260, 269; and building codes, 242, 248–49, 259; and building shape, 249, 251; build-to-suit development, 240, 267; categorization of, 239–40, 241; classes of, 239; and construction costs, 251; and construction financing, 262–63; corporate campuses, 243; corporate tenant with multiple location options, 24–25; data for, 243, 244; and design, 251–61; and elevators, 256; 11000 Equity Drive [Houston, Texas], case study, 272, 279–80, 279–81; and energy issues, 242, 249, 256, 258–59, 271; and equity, 264–66; exterior design, 253–54; and FAR (floor/ area ratio), 248, 249; and financial crisis (2008–2009), 239, 240–41, 261–62, 263, 264, 272; and financial feasibility, 250; and financing, 241–42, 261–66; and flexibility/ adaptability, 248, 251, 271–72; and historic landmarks, 249; and HVAC systems, 257–58, 259; and impact fees, 248, 250; interior design, 254–61; and joint ventures, 264; landscaping, 253; larger tenants, 247; and leasing, 263, 266–69, 270; and life safety systems, 259; and lighting, 254, 256–57; location of, 240; and maintenance costs, 258, 269, 270; and management, 269–71; market analysis for, 241–42, 243–47, 244, 251; and marketing, 266–69; and merchandising, 267; and mixed-use environment, 239, 248; and mortgage options, 264; neighborhood offices, 240; and occupancy/vacancy rates, 246; owner-occupied building, 240; and ownership, 240; and parking, 248, 249, 252–53; and permanent financing, 263–66; preleasing, 22, 65; and project feasibility, 243–61; and regional economic growth, 244; and regulatory issues, 248–50; and rental rates, 246–47; and security, 254, 259; selection of contractor for, 260; and selling the completed project, 271; 17th and Larimer [Denver, Colorado], case study, 272, 274, 274–78, 276; and signage, 254; and site conditions, 248; and site planning, 252–53; and site selection, 247–48; and space modules, 251–52, 252; space planning for, 256, 260; spec building, 240; stages of development and timeline, 23, 29; and subleased space, 246; and suburbanization, 240, 242–43; and supply/demand, 244–46, 245; and sustainability, 258; and target market, 243, 248; and technological development, 242, 258, 286–87; and tenant improvements, 246–47, 260–61; and tenants, 260–61; and traffic, 240, 242–43, 248, 250; trends in, 240–43; types of buildings, 239; and zoning, 249. See also Planned unit developments (PUDs)
Office/tech buildings, 286–87
Olney Village Mart [Montgomery County, Maryland]: market analysis, 340–41; sales analysis, 341
Open listing, 268
Open space: covenants for use, 141; developer’s donation of, 143; and development industry trends, 386–87; environmental concerns, 112, 113, 114; multifamily residential development, 196; office development, 256
Operating period, 22, 168, 169, 179
Operations. See Management
Orange County, California, 143
Originators in conduit loans, 208
Outlet shopping centers, 334
Outparcels, 359
Overborrowing, 213
Owner-occupied buildings, 240
Ownership: and development process, 14; in joint venture with developer, 129–30; and multifamily residential development, 148–49; of office development, 240
P
Pacific Station [Encinitas, California], 146
Page Business Center [St. Louis, Missouri], 293, 307
Pari passu, 310
Parking: deferred parking, 249; and industrial development, 285, 286, 287, 301, 318, 319; and lighting, 254, 351; local streets, 117–18; and multifamily residential development, 195–96; and office development, 248, 249, 252–53; perpendicular/diagonal, 349–50; and protective covenants, 141; and R&D, 301; and retail development, 348–50, 351; and security, 254, 259, 351
Parking consultants, 53–54
Participating mortgages, 205, 206–7, 208, 264
Partnerships: advice about, 27; and cash calls, 214; common problems with, 32–33; continuum of, 7; and developers’ integrity, 392; and organizing for development, 31–33
Pass-through expenses, 263, 364
Patio homes, 124–25
Payment bonds, 59, 60
Pay rates, 205, 210
Pearl Qatar [Doha, Qatar], 374
Pedestrians, 302
Peiser Corporation, 87, 95, 160, 200, 213, 220
Pension funds, 67
Percentage rents, 362
Percent completion, 204
Performance bonds, 59, 60, 318
Perley, Jim, 230, 232
Permanent financing: advice about, 26; comparison of types of, 206–7; and construction financing, 202–3, 204; and industrial development, 308–9; and interest/interest rates, 202–3, 204; and leasing, 263; and loan commitments, 209–10; and multifamily residential development, 202–8; and note/ pay rates, 205, 210; and office development, 263–66; and rent, 263; and retail development, 358, 359; types of lenders, 70–71. See also specific type of lender
Permits, 69. See also Approvals; specific type of permit
Perris Ridge Commerce Center [Perris, California], 296
Perseo [Milan, Italy], 270
Petrocchi, Dan, 335
Phantom equity, 36, 38
Phasing of subdivisions, 89
Planned residential developments. See Planned unit developments (PUDs)
Planned unit developments (PUDs), 111, 114, 297
Planners, 387
Plater-Zyberk, Elizabeth, 381
Platting, 87–90, 123–24; and easements, 164; fees, 93; and industrial development, 301; subdivision plat, 143
Playa Vista Campus [Los Angeles, California], 265
Plus Flats [Istanbul, Turkey], 230
PMNs. See Purchase money notes
Point-of-sale incentives, 224–25
Points, 128, 203–4, 263
Porta, John, 199, 219
Positioning, 364
Pour strips, 304
Power centers, 329
Pravada [La Mesa, California], 161
Predevelopment phase, 22, 74
Prefabricated buildings, 306
Preferred returns, 128, 129, 130, 212, 214, 215
Preleasing, 22, 65, 223, 267
Presale commitments. See Forward commitments
Present value, 13; comparison with future value, 98, 99; factors on land allocation for different uses, 99
Pricing, 224–25, 360
Primary market area, 155
Private offerings, 214, 216–17
Production homebuilders, 133, 134, 135
Product type: advice about, 26; and industrial development, 284, 284–87; and residential development, 148–50, 149
Profit. See Return
Profit and loss managers, 38
Pro forma NOI, 170, 172
Project cost. See Costs
Project feasibility: of industrial development, 288–99; of land development, 75–110; of multifamily residential development, 151–91; of office development, 243–61; of retail development, 336–47. See also Approvals; Financial feasibility; Market analysis; Site selection
Project objectives, 222
Promotes, 310
Property managers, 63–64; advice for, 232; multifamily residential development, 196, 201, 229–32; office development, 269; software for, 380. See also Management
Property taxes, 84–85, 143
Protective covenants: cost covenants, 141; and design, 141; enforcement of, 142; and industrial development, 295, 297–98, 315, 317, 318–19; and land development, 78, 88, 137, 141–42; and multifamily residential development, 164; and retail development, 357; running with the land, 141, 164; term and revision of, 141–42
Public relations, 224, 225–26, 267
Public relations agencies, 62–63, 225
Public sector. See Government programs
Puckhaber, Jay, 300–301
PUDs. See Planned unit developments
Purchase and sale agreements, 80, 81
Purchase contracts, 80, 82, 84–85
Purchase money notes (PMNs), 82–84, 126–27
Purchase price calculation, 264
Q
Quality of life and site evaluation, 289
Quantity surveyors, 55
Quick and dirty analysis, 96, 99–100, 101
Quigley, John M., 242
R
Radburn, New Jersey, 111
Rail access, 289, 302–3
Rainier Vista Community [Seattle, Washington], 22, 111
R&D (research and development): and amenities, 303; business parks, 283, 287; and construction stage, 301; and design, 286, 303, 307; and flexibility, 286; and parking, 301; and tenants, 316; and utilities, 294
Rappaport, Jerry, 29, 151, 211–12, 217
Rate of return. See Internal rate of return (IRR)
Rathaus-Galerie Leverkusen [Leverkusen, Germany], 377
Rational nexus for impact fees, 93
RBC Centre [Toronto, Canada], 257
Real estate brokers: commissions, 61–62, 61–62, 83, 133, 268, 316, 319; and industrial development, 292, 314, 316, 319; as leasing agents, 61–62, 267–68; and marketing, 133; and office development, 267–68; selection of, 61
Real estate investment trusts (REITs), 67–68; industrial development, 308; land development, 148; office development, 261, 264; trends, 374, 376
Real estate service firms, 56–64
Rebar, 304
Recession. See Great Recession (2007–2009)
Recession, as part of market cycle, 15, 16
Recovery, as part of market cycle, 15, 16
Redevelopment/rehabilitation: and industrial development, 287–88, 295; and retail development, 334, 342, 343, 344
Referral fees, 229
Regional shopping centers, 329–30, 331, 334. See also Retail development
Regulation D private offerings, 214, 216
Regulatory issues: advice about, 300; and development industry image, 388; and development industry trends, 378–79; example of, 138, 140; and financing, 93–94; and industrial development, 297–99; and land development, 74–75, 78, 79, 80, 87–96; and multifamily residential development, 165–68; and multiple jurisdictions, 88; and office development, 248–50; and retail development, 342, 343–44; and site selection, 78, 79; and subdivisions, 74–75. See also Approvals; Platting; Zoning
Rehabilitation. See Redevelopment/rehabilitation
Reisner, Gabe, 253
Release, 209; out-of-sequence release, 84; price, 128; on purchase money notes, 82–84, 126
Rent: calculations for, 246–47; and financing, 263; and industrial development, 316, 317, 318, 319; and marketing, 224–25; and multifamily residential development, 224–25, 233; and office development, 263; percentage rents, 362; and retail development, 345, 347. See also Leasing; Rental rates
Rentable/usable ratio (R/U ratio), 254–55, 269
Rental office. See Leasing office
Rental rates, 246–47, 263, 345, 347, 362
Rent control, 166–67
Repayment of loans: and discounted cash flow (DCF) analysis, 102. See also Release
Replacement costs, 314
Replatting, 87
Reserve parcels, 143
Residential development: and business parks, 284; construction stage, 130–32; and lot yield, 96, 97; and platting, 123–24; and product types, 148–50, 149. See also Multifamily residential development
Residential unit developments. See Planned unit developments (PUDs)
Residual profits, 214, 216
Resolution Trust Corporation (RTC), 373–74
Restrictive covenants. See Protective covenants
Retail development, 327–71; and accessibility, 342, 347, 350; anchor tenants, 338, 348, 350, 360–61, 362, 364; and approvals, 335, 343–44; Bayshore Town Center [Glendale, Wisconsin], case study, 367, 367–71; and building configuration, 347–48; and build-to-suits, 356; categories of, 327, 331; and community groups/neighbors, 335, 343; and construction stage, 356–57; and cost, 344–45, 346; and data books, 356; data for, 337–40; and demographic characteristics, 338; and design, 347–56; and downtown locations, 334; and energy issues, 352, 354; and environmental issues, 342, 344; and equity, 358, 359; and exterior design, 352–54; and financial feasibility, 344–47; and financial management, 365–66; and financing, 357–59; and flexibility, 342, 347, 359; and hazardous materials, 342, 344, 353; history, 328–30; and HVAC systems, 354; and income projections, 345, 347; and infill sites, 341–42, 360; and inner cities, 335, 358; and inspections, 353; and interior design, 355; and Internet, 336; and landscaping, 351, 352; and leasing, 359–62; and lighting, 351–52; and location, 334–35, 338; and maintenance, 361, 364, 365; and management, 365–66; and market analysis, 337–40; and marketing, 364–65; and niches, 366; and outparcels, 359; and parking, 348–50, 351; and permanent financing, 358, 359; and pricing store spaces, 360; and project feasibility, 336–47; and redevelopment/rehabilitation, 334, 342, 343, 344; and regulatory issues, 342, 343–44; and rent, 345, 347; and roofing, 353–54; and security, 351; and signs, 355, 355–56; and site acquisition, 342; and site conditions, 341–40, 350–52; and site planning, 343–44, 350–52; and site selection, 340–42; size and shape, 341–40, 355; and streets/roads, 342, 348; and suburbanization, 328; and supply/ demand, 337; and tenant-finish construction, 352, 356–57; and tenants, 335, 336, 355–56, 359–62; and trade areas, 337–38; and traffic, 342; trends in, 363, 366; and utilities, 353, 354; visibility of, 342, 347; and zoning, 343–44. See also specific type of shopping center
Retainer agreements, 42
Return: accrued return balance, 212; cash-on-cash return, 173, 173, 216; on equity, 103, 110, 178; and financial feasibility, 96, 103, 106, 108–9, 110; and inflation and risk, relationship to, 110; and joint ventures, 128–30; lookback return, 309, 310; and multifamily residential development, 173, 173; preferred, 128, 129, 130, 212, 214, 215; profit split, 212, 214; and residual profits, 214, 216; tiered hurdle rates of return, 310. See also Internal rate of return (IRR)
Rights-of-way, 97
Risk: and builder precommitments, 127; and construction financing, 209; and development process, 14–15, 22–25, 28; and industrial development, 311–14, 312–13; and joint ventures, 128–30; and multifamily residential development, 150, 202, 204–5, 209; and partnerships, 32–33; and return and inflation, relationship to, 110; stages of, 25, 28; and value, 13
Roads. See Streets/roads
Rock Row [Los Angeles, California], 138, 138–40
Rolling options, 86
Rollover options, 128
Roofs: industrial development, 306; land development, 141; multifamily residential development, 197, 198; retail development, 353–54
Rose, Daniel, 388
Rose, Jonathan, 55
Rouse Company, 362
RTC. See Resolution Trust Corporation
Rummell, Peter, 384
S
Sale-leasebacks, 264
Sales, 132–33; and financial feasibility, 102; forecasting, 340; incentives, 224–25; and marketing, 132–33. See also Marketing
Sales brochures, 223, 226–27, 315
Sales offices, 136, 228
San Francisco: condominium conversions, 167; office development, 248
Sanitary sewers. See Sewers
Savings and loan institutions (S&Ls), 66–67, 373
Scheduling the job, 219–20
Schultheis, Paul, 211, 229
Schweitzer, Judi, 386
Schwimmer, Howard, 293
Sears, 243, 329
Seaside [Walton County, Florida], 113–14
Secondary market area, 155
Security: multifamily residential development, 199; office development, 254, 259; parking, 254, 259, 351; retail development, 351, 365
Seller’s “comfort language,” 84
Seller’s remedy, 85
Seller’s warranties, 83
Selling the project, 271, 319
Selling the property, 228–29, 231–32
Senior housing, 125. See also Aging population
Sense of place, 384
Septic tanks. See Sewers
Service areas in industrial development, 302
Servient tenement, 164
Setasides, 217–18 17th and Larimer [Denver, Colorado], 272, 274, 274–78, 276
Sewers: and industrial development, 294; and site planning, 121–22. See also Infrastructure
Shadow space, 246
Shipping date vs. installation date for warranty purposes, 49
Shopping centers, 327–71. See also Retail development; specific type of shopping center
Short-term leases, 317
Sick building syndrome, 258
Siding. See Exterior design
Signs: and industrial development, 302; and marketing, 223, 226, 228; and office development, 254; and retail development, 355, 355–56
Simple capitalization, 169–73, 170–73
Simpson, Scott, 195
Site acquisition, 80–85; advice about, 26, 83; checklist for, 81; and closing, 80, 81; and contingencies in purchase contracts, 82; and contracts, 80–85; and development industry trends, 379; and earnest money, 80, 82, 84; example of, 139; and feasibility studies, 82; and industrial development, 288–89, 292–93; and land development, 80–85; and letters of intent, 80–81; and multifamily residential development, 151; and retail development, 342; and site conditions, 80; steps in, 81; and technology, 379; and titles, 81; and zoning, 82
Site conditions: and costs, 251; and industrial development, 292–93; and land development, 78, 79, 80; and multiresidential development, 156, 162–64, 197; and office development, 248; and retail development, 341–42, 350–52; and site acquisition, 80. See also specific type of condition
Site coverage, 297
Site engineering, 118–23, 350–52
Site maps, 116
Site planning, 110–25; and absorption, 117; advice about, 26; alternative layouts, 114, 115; base maps, 115; and boundary surveys, 116; and commercial development, 117; and concept development, 116–17; and costs, 111–12; and density, 123, 124–25; and development industry trends, 379; diagram of site’s features, 114; and drainage, 118–20; and entrance to project, 117; final plan, 115, 201; and floodplains, 119, 163; and grading, 118; and industrial development, 318; and low-impact development (LID) methods, 120–21; models, 115; and multifamily residential development, 195–97; and planned unit developments (PUDs), 111, 114; and platting, 123–24; preliminary, 200–202; processes, 114–15; and retail development, 343–44, 350–52; and site engineering, 118–23, 350–52; site maps, 116, 379; and streets/roads, 117–18; and technology, 379; topographic maps, 115–16; and traffic, 117–18; and utilities, 116, 121–23; and value enhancement, 117. See also Density; Parking; Zoning
Site selection: development team for, 41; for industrial development, 288–89, 292–97; for land development, 75–80, 85–86; and location, 272; for multifamily residential development, 159–68; for office development, 247–48, 252–53; and regulatory issues, 78, 79; for retail development, 340–42; and site conditions, 78, 79, 292–93
Size of project: and first deals, 12; for industrial development, 285, 311; and management, 229–30; and marketing, 133, 135–36; for multifamily residential development, 161–62; for retail development, 341–42, 355
Skylights, 306
Slope of site. See Site conditions
Small-lot villas, 124
Smart buildings, 199, 242, 258, 272
Smart growth, 383–84
Smith, Scott, 89
Social responsibility, 387–88, 392
Soils. See Site conditions
Soils engineers, 49 Solid Waste Agency of N. Cook County v. U.S. Army Corps of Engineers (2001), 88
South Campus Gateway [Columbus, Ohio], 347
Space: common space, 141, 142, 143; measurement of, 254–55; and office development, 254–56; planning of, 256. See also Design; Open space
Spec buildings, 134, 135, 240, 283
Special districts, 93, 297
Specialty shopping centers: categories of, 331; defined, 327; and design, 348; and development opportunities, 335; and landscaping, 352; and lighting, 352; and product/place equation, 334. See also Retail development
Spivey, Jay, 242
Sponsors in conduit loans, 205
Spot footings, 304
Spread footings, 304
Squier, Chris, 11
Stabilized operating period, 22
Standby commitments, 69–70, 264
Startup. See Getting started
Steel construction, 253, 304, 306, 352
Stenlund, Ronald, 49
Sterling Collwood [San Diego, California], 119
Stone exterior, 253
Storage areas, 141, 196, 318, 319
Storefront system, 253
Stormwater, 163–64, 302, 351. See also Site conditions
Strategic planning, 38, 39
Streets/roads: and financing, 93; hierarchy of, 111, 117–18; and industrial development, 301–2; and land development, 93; and retail development, 342, 348. See also Parking; Traffic
Strip shopping centers, 329, 332–33, 333, 342. See also Retail development
Strongbacks, 304
Structural engineers, 48
Stubblefield, Jo Anne, 89, 136, 137, 143
Stucco, 197, 253, 353
Subcontractors, 131, 132, 221–22
Subdivision bonds, 60
Subdivisions: definition of, 73; design of, 110–25; filing process for, 89; and homeowners associations, 142–43; and industrial development, 301; phasing, 89; process of subdividing, 73–75. See also Land development
Subleased office space, 246
Submarkets for multifamily residential development, 154–56, 191
Subordination, 84, 126, 127
Suburbs: and development industry trends, 382–83; industrial development, 284; office development, 240; retail development, 328, 332, 335
Sullivan, Mike, 253
Super community centers, 331
Superfund, 294
Supermarkets, 331
Super regional centers, 331
Supplementary note procedure, 84
Supply/demand: for industrial development, 295–97; for market analysis, 244–46, 245, 337; for multifamily residential development, 154, 156–58, 159; for office development, 244–46, 245; and real estate cycles, 15–17, 16; for retail development, 337
Supreme Court decisions on land regulation, 88
Surety companies, 59–60
Surveyors, 52–53
Sustainability: advice about, 345; and land development, 112; and office development, 258
Swimming pools, 196
Syndications, 67–68, 188, 189, 190, 210–17
T
Takeout loans. See Permanent financing
Target market: and design, 113, 124; and getting started, 17; and industrial development, 289, 314, 315; and marketing, 222; and multifamily residential development, 147–48, 151, 154–56; and office development, 243, 248, 266, 267; and trends in development industry, 376
Tax credits, 148, 218–19. See also specific types
Taxes: increases and leasing, 317; and industrial development, 299, 319; and joint ventures, 129–30; and office development, 248; property taxes, 84–85. See also Tax credits
Tax increment financing, 93, 299
Tax Reform Act of 1986, 148, 218, 299
Technical services packages, 315
Technological development: and development industry, 379–81; and industrial development, 286–87, 320; and office development, 242, 258, 286–87. See also R&D (research and development)
Technology parks, 287
Telecommunications, 199, 287. See also Wiring
Tenant-finish construction, 352, 356–57
Tenant improvements (TIs): and industrial development, 286, 317; and office development, 246–47, 260–61; and R&D, 286
Tenants: credit requirements for, 232; and design, 243; and financing, 210; and industrial development, 285, 286, 316–19, 320; and management, 231; and marketing, 364–65; and multifamily residential development, 231; and office development, 254–56; placement of, 361; and R&D, 286, 316; and rentable space, 254–55; and retail development, 335, 336, 355–56, 359–62; satisfaction of, 270; seed, 317, 318; selection of, 318, 359–60; and signs, 254, 355, 355–56; turnover in, 231, 232. See also Anchor tenants; Leasing; Rent; Tenant improvements (TIs)
Ten Fifty B [San Diego, California], 127, 200
Terrazzo [Nashville, Tennessee], 48
Terwilliger, Ron, 389–91
Texas: and development industry trends, 381; industrial development, 306; notice to tenants of property sale, 231; regulatory concerns, 90; security systems, 199; site acquisition process, 80; subdividing land, 73. See also specific cities and developments
Thin Flats [Philadelphia, Pennsylvania], 8
Third-party investors, 130
Third Square [Cambridge, Massachusetts], 197
Thomas, John, 252
Thompson, Kevin, 225, 226, 227
Thurber, Lynn, 389–91
Tiered hurdle rates of return, 310
Tilt-up buildings/walls, 352. See also Concrete structures
Time and materials (T&M) agreements, 42, 46, 52, 53
Timeshare ownership, 149
Title companies, 58–59, 83, 115
Title fees, 59
Title insurance, 58–59, 85
Titles and land acquisition, 81
Title searches, 52, 58–59, 266
TOD (transit-oriented development), 166
Topographic surveys, 115–16
Topography. See Site conditions
Townhouses, 123; and covenants, 141; popularity of, 124; site design, 194, 195. See also Multifamily residential development
Toxic waste. See Hazardous materials
Tract maps, 297
Trade areas, 337–38
Traffic: and development industry trends, 387; industrial development, 285, 294, 295, 301–2; land development, 92–93, 111; office development, 240, 242–43, 248, 250; residential areas, 117–18; retail development, 342. See also Accessibility
Traffic consultants, 53–54
Trails, 196
Trammell Crow Company, 205
Transferable development rights (TDRs), 87, 249
Transit-oriented development (TOD), 166
Transportation demand management (TDM) programs, 250
Transportation issues: and development industry trends, 387; for multifamily residential development, 155; for office development, 248, 250; and smart growth, 383. See also Accessibility; Traffic
Trash collection. See Garbage disposal/collection
Travel time, 155
Trends: in development industry, 373–93; in industrial development, 284, 320; in office development, 240–43; in retail development, 363, 366
Trip generation, 250, 298
Triple-net leasing, 268, 297, 316, 317, 319, 362
Truck access to industrial development, 302–3, 318–19
Trust for Public Land, 386
Turnover of tenants, 231
U
Urban Land Institute (ULI), 10, 26, 148, 217, 344, 349, 373, 383, 389, 393
U.S. Army Corps of Engineers floodplain permits, 119, 120
U.S. Census Bureau, 338
U.S. Green Building Council, 242, 259
U.S. Supreme Court decisions on land development regulation, 88
Usable area. See Rentable/usable ratio (R/U ratio)
Use clause, 362, 364
User fees, 93
Utilities: and construction stage, 132; easements for, 165; and industrial development, 292, 294, 315, 316; and land development, 78, 79, 121–23; map of, 116; meters, 198; and multifamily residential development, 164–65; and retail development, 353, 354; and site planning, 116, 121–23; and site selection, 78, 79. See also Infrastructure
U-values, 258
V
VA (Department of Veterans Affairs), 132, 137
Vacancy decontrol, 167
Vacancy rates. See Occupancy/vacancy rates
Value, 12, 57. See also Present value
Variable-rate mortgages, 205
Variances, 141, 298, 344
Vegetation. See Site conditions
Ventilation. See HVAC systems
Ventura Lofts [Houston, Texas], 60
Venture capital, 289
Veranda by Charter Homes [Lancaster, Pennsylvania], 95; discounted cash flow (DCF) analysis, 100, 102–9, 103–9; quick and dirty analysis, 99–100, 101
Vesting of development rights, 90
Victoria Gardens, 360
Vilkin, Greg, 230
Virginia, regulatory issues in, 111
Visibility: of industrial development, 302; of multifamily residential development, 162; of retail development, 342, 347
Vulture funds, 309
W
Walking trails, 196, 302
Wall systems, 304, 306
Warehouse Row [Chattanooga, Tennessee], 43
Warehouses, 285, 319–20; design, 303–4; in foreign trade zones, 289; multitenant warehouse, market analysis, 290–91; supply/demand analysis, 296; warehouse/distribution parks, 287. See also Industrial development
Washington, D.C., 243, 330, 335
Waterfront at Pitts Bay [Hamilton, Bermuda], 91
Water systems, 122, 294. See also Utilities
Websites, 223, 226, 227, 315, 380. See also Internet
West River Commons [Minneapolis, Minnesota]: case study, 235, 235–37; combined analysis of development and operating periods, 179, 180–87, 187; development costs, 171, 172–73; discounted cash flow (DCF) analysis, 174–76, 177–79, 178; financial feasibility analysis, 168–91; joint venture–syndication analysis, 188, 189, 190; maximum loan amount, 170, 172; monthly cash flows during development period, 187–88; pro forma NOI, 170, 172; rental summary, 169, 170; return to investors, 188, 189, 190; simple ratios, 173, 173
Wetlands, 119–20, 163, 342, 344, 385, 386
White Provision [Atlanta, Georgia], 70, 72, 382
Williams, John, 311
Windows, 198, 245, 251, 252, 261, 304, 306
Wiring, 199, 254, 261, 320, 380
Wisconsin Place [Chevy Chase, Maryland], 58, 335
Wolff Waters Place [La Quinta, California], 2, 157
Wolverton Park [Milton Keynes, England], 35
Wong, John, 259
Working drawings, 45, 45–46
Work letters, 260
Wu, Charles, 311
Wyper, Jay, 160
X
Xeriscaping, 197
Z
Zavitkovsky, Karl, 205
Zax, Leonard, 58
Zehngebot, Corey, 235
Zero-lot-line houses, 124–25, 125
Zipper lots, 125
Z-lots, 125
Zombie buildings, 271
Zoning: development industry trends, 378, 379, 384; industrial development, 292, 297, 301; land development, 79, 87–91, 137; multifamily residential development, 165–66; office development, 249; planned unit developments (PUDs), 114; retail development, 343–44; and site acquisition, 82
Zuker, Edward, 150