Finding a suitable site is the first step in any successful construction endeavor.
- Even if a project has fantastic design and highly functional components, the success of the underlying business depends on the quality of the site selection. An unsuitable location raises construction costs and may hinder the building’s and company’s potential for future growth.
Let’s look at five common blunders people make when choosing a location for their new business.
Error #1: Improper or Unbalanced Criteria
Certain qualities or factors may begin to be favored more frequently than others, potentially making the site selection process more manageable. Each place will have its unique set of benefits and drawbacks, advantages and disadvantages, chances and challenges. It is essential to your search for the ideal location for your firm to be aware of the factors that will most significantly contribute to the project’s overall success.
The project’s cost, population, income, and demographics of the target audience are all potential considerations that could play a significant role in the site selection process. However, things like labor prices, the health of the real estate market, tax rates, and logistics, among other things, need to be evaluated or factored in proportionally.
Error #2: Adopting “one-size-fits-all” Strategy
Development projects need to have thorough plans, but these plans should be constructed as malleable conceptual frameworks so that they may adapt to ever-changing requirements. Every location is one of a kind. Also, every market is unique in its way. Each municipality is unique in its way.
Assuming that a standard model can be installed on any site will lead to issues in the future. Thus, it’s best to avoid doing so. Taking a more individualized approach will reduce the number of times your project needs to be redesigned or undergo change orders, both of which can end up being expensive additions.
Error #3: Lack of Research About a Potential Worksite
One of the essential components of a lucrative commercial real estate transaction is exhaustive research and analysis. It is of the utmost importance to identify and quantify site challenges, such as environmental risk, inadequate infrastructure, and spatially varying building costs.
It is possible, among many other outcomes, that early failure to address site issues will result in the following:
- Inaccurate assessment of the value of the property
- Leaving the new owner with a pile of responsibility
- Rising prices for building materials
Error #4: Forgetting to Account for Incentives
Incentives for development can play a significant role in the eventual cost and decision.
Cities and states offer different incentives, such as commercial development subsidies and property tax abatements.
Companies can benefit from these advantages by conducting a thorough site selection process. The site selection group should always consider long-term and short-term goals that will bring tangible, measurable gains to the business.
Error #5: Determined by Fleeting Fashions
Some organizations benefit temporarily from events or market conditions, but it’s essential to look at the big picture to see whether there are any underlying problems. Excessive operating expenditures and an unfriendly business climate are just two examples of short-term issues that might lead to more significant problems down the road.
Site selection is consistent across all projects, markets, clients, and locations. Building to suit projects relies heavily on careful site selection. Avoiding pitfalls and setting your commercial real estate development process on the right track requires a dedicated, strategic effort.
******************************
Come join us! Email me at mark@dolphinpi.us to find out more about our next real estate investment.