EDSR INFORMATION 03-14-2011 - Laserfiche WebLink

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Ehlers Development App HOW TO THINK LIKE A DEVELOPER Ehlers Public Finance Seminar February 3, 2011 Prepared by Arne Cook, Montgomery Properties and Realty Advisors The economic recession and real estate depression have left the commercial development business in turmoil. Multi-family housing is the only bright spot where we are seeing some new construction. For the most part, the commercial development that will occur over the next two years will be "build-to-suits" - properties built specifically for the tenant or owner. Build-to-suit customers are usually on tight development schedules. They require land sellers to be able to act quickly, and local governments to provide timely approvals. Don't wait until you have a prospect to sort through issues such as future land use goals or environmental conditions. Get ready for your build-to-suit prospect and for when the market turns. You can make your publicly owned site competitive by thinking and acting like a private landowner and developer. Here's a glimpse into how a developer thinks. Know Your Site As a seller, you need to fully understand your site as well as competitive sites. Pricing depends on so much more than just price per square foot. What are the strengths and weaknesses of your site? Consider: • Location relative to Minneapolis/St. Paul commercial business districts (metro sites), local demographics and demand generators • Location to transportation corridors and other amenities (parks, transit, etc.) • Access from highways • Supply of developable land in the market area • Visibility • Site conditions (environmental, geotechnical) • Zoning and city's goals for the site • Costs associated with developing the site Know the Market As community developers we often think about land use in broad terms -mixed use, commercial, industrial. But to think like a developer you have to understand the market in much narrower segments. • What is the supply of the land or product type you are targeting? Think very specifically about product type (i.e., industrial office warehouse, office showroom, distribution). • What options are available to potential users and at what price?