In the world of commercial real estate development, those who have managed to build careers understand the fundamentals and stick to them. When you see a beautiful and functional mall or an innovative office tower that stands out from the rest, you can be sure that the company that built it had a strong foundation in the tenets of real estate development. For those like Blake Rubin who have had great success in the business, these real estate development fundamentals come naturally, and doing anything contrary would never enter their minds. Read further to get an insight into what they hold dear.
Create Strong Relationships
In a business where many different departments encompassing sometimes hundreds of people must work closely together on a project, having strong relationships with the people involved is critical. In commercial real estate development relationships must be developed with attorneys, equity sources, general contractors, civil engineers, architects, brokers, appraisers and others who have critical roles on a projects design, construction and marketing. A great developer can orchestrate these different groups in a way that gets things completed successfully. In order for his to occur, he must develop strong relationships allowing him to communicate with these key groups in short hand and work closely with them to solve any problems that arise.
Have High Risk Tolerance
When you are standing in a empty lot imaging that a skyscraper or shopping center will be there 12 months from that date, it takes imagination, intestinal fortitude, and an high tolerance for risk taking because everything from that point forward on the project will involve taking a risk. The best commercial developers understand this and have strategies to mitigate some of the risk. But they also know that since commercial real estate development is filled with risks, no matter how much planning or preparation is employed, some risks will remain. Therefore, the best developers learn to develop an appetite for risk and not let it impede their work.
Focus on the Data
Commercial real estate projects are built based on data accumulated about the location, neighborhood, consumer and business trends, the economy now and in the near term, and other objective factors. In other words, going forward on a development project is based on firm business criteria and little else. The good reason for this is because there will be a lot of money and time spent on a project once it is green lit. If the ideas that went into formulating the project were not sound, they will often be revealed after a lot of time and money has been already spent. When a developer decides to go in a direction contrary to the data, he has crossed over an important line and may have jeopardized everything. Adding this additional risk to a project, should never be considered. The best developers know this and keep personal preferences and off-the-cuff decision making to the barest minimums. Sticking with the data simply creates success for all involved.