An end-of-year analysis released by the CBRE group last week showed that market demand for office, industrial and retail space increased and vacancy rates declined strongly towards the end of 2013, a trend that I expect to continue this year. This strong commercial real estate market is in line with our recent observations that development is back. Data released in December by the US Census Bureau and the Department of Housing and Urban Development showed that building permits for homes and multifamily developments enjoyed strong growth in the Q4 of 2013, which is echoed in the spike we’ve recently seen in demand for our construction due diligence services.
As opportunities abound, it is important not to jump into a development project without remaining diligent about adequately assessing risks. I recently presented a webinar that addressed some of the typical development pitfalls, and discussed practical elements that developers, investors and construction lenders should consider as part of an effective due diligence process. Commissioning key reports and assessments – such as zoning reports or land survey, a Phase I environmental Site Assessment or Subsurface investigations as required – before committing a great deal of time or money will help you to assess a projects viability upfront and reduce development risk.
The webinar is currently available on-demand, and can be accessed here.