As a development specialist and architect, it is easy for me to walk down the street and point out the buildings that work for their owners and the ones that do not (don’t worry – I won’t name names here). Whether it’s a massive skyscraper or a two-story office project, development is a competitive sport, and those who succeed at it come away with exciting projects that engage their communities, drive up market demand, and help their owners make money throughout the life cycles of their buildings.
The knee-jerk reaction most novice developers have when faced with a project is that success equals spending the least amount of money possible. The truth is successful developers know how to build a team of professionals and give them the latitude they need to avoid making very costly mistakes down the road by pinching pennies early on in the process. They understand that a dollar saved in some of the earlier steps of the project can set the stage for thousands of dollars wasted in the later stages of that development.
The process of creating this road map, known as development programming, begins long before a site is even purchased. Development programming starts with bringing a team together, researching what it will take to make the building work in the long run, and mapping out the path to a successful and profitable development. Here are four ways that going through the development programming process early can save you from winding up with a building boondoggle years down the road:
Development programming creates new “outside the box store” possibilities
One of the first steps any good development programming team will take will be analyzing the constraints of the development. This starts with identifying the short-term and long-term goals for the property, which may end up being different than the initial goals.
For example, let’s say a dentist wants to build an office. The initial goals of the development are exactly that – an office to host one practice. However, a strong development programming team is brought on board, and quickly realizes that the proposed site could actually support a building that could accommodate several offices. By properly utilizing development programming, the team could design a space that meets the current needs of the dentist, provides the possibility for extra revenue from leasing out the additional office space, and gives the dentist additional leverage if and when the time comes to exit the property.
Good contextual analysis provides the developer with several key pieces of information, including:
*Short-term and long-term goals
*Quality investment options
These tools do more than just provide developers with options – they are ammunition to help the developer and team make a stronger case for a project that breaks the boundaries of the mundane, and becomes a valuable part of the community as a whole.
Development programming turns financial constraints into opportunities
Seasoned developers know that budgets are not driven by a fixed dollar amount, but rather by many variables that are the real drivers of the project. Time to market, desired realized return on investment, or establishing a new brand identity will each affect the overall project budget in its own way. By defining these variables ahead of time, development programming can inspire confidence in the project, both internally and externally, and help determine:
*Scope of budget based on contextual analysis
*Present value of the project
*Short-term projects that build the path to long-term expansion
Financing is flexible, and lenders are quicker to loosen the purse strings if they see a development program that supports the project, regardless of the project’s size. A solid development program will evaluate multiple financial documents (known as pro formas) to guide the development to the direction that is more likely to achieve the developer’s goals, and set a budget based on those goals for the project.
“Location, location, location” is based on “market, market, market”
What is often missed in the old adage “location, location, location!” is that “location” can be designed. Once the development programming team has identified the contextual and financial constraints of the project, they will also have the market information needed to determine whether or not the project is feasible in its current location. That is why it is vital to go through these steps early on in the process. Otherwise, once the site is locked in, it ties the hands of the team and limits potential for a great development. With market information in hand, the team can identify how best to utilize the potential space to determine:
Development programming can turn bureaucrats into boosters
It’s happened too many times to count – a project is on the right path, funding secured, with a strong plan and support from fellow business leaders… and then it all gets derailed because of lack of support from City Hall. However, a proper development programming process will help keep that from happening. Consultation with government officials during the project will help the team understand the local, state, and federal encumbrances that impact the site. By meeting with local regulators early in the process, the team can determine the flexibility of those encumbrances long before the project gets blown out of proportion and politicized. That way, the team can work with government entities to ensure proper protocols are either given the priority they require.
By analyzing contextual, financial, market and regulatory constraints, development programmers can develop a schedule for the project that takes into account all the variables that would otherwise cause delays later on in the process. The result is a plan that can thrive despite market fluctuations and produce a product that is a win for both the community and the developer.
As development specialists and architects, my team and I build these types of plans to help you realize your development objectives. We see our time with our clients as investing in a shared success, as your success leads to happier clients, who are in turn more likely to continue to develop with us. Starting on the right foot with a solid development program for your project is one of many steps to be taken, but it is a vital one. When executed properly, the process of building programming can shed light on a very complex path, guiding you to make more successful decisions as you navigate the changing demands of the marketplace. Please contact us today to set up a free initial consultation with our team, and learn more about how building programming may be right for your project.