What do you do if you're ready to take on more complex commercial real estate projects?

In my experience, when building the outline of the complex development understanding the marketplace, experts and zoning laws are vital in understanding what is the correct development thesis. For example, building an lab/office building in a remote parts of the United States would be more challenging to have occupants than an urban setting.

I will study and research to master the necessary knowledge and skills. I will build relationships with experienced experts and partners to learn and receive support. Finally, I will seek out innovative solutions for specific challenges during project implementation.

Building knowledge in commercial real estate projects involves a multi-faceted approach that includes formal education, practical experience, and continuous learning. 1. Formal Education and Certifications 2. Practical Experience 3. Continuous Learning 4. Networking 5. Stay Updated on Regulations and Market Trends By combining formal education, practical experience, and a commitment to continuous learning, you can build a robust knowledge base in commercial real estate projects. This will enable you to take on increasingly complex and rewarding roles within the industry.

If you're ready to take on more complex commercial real estate projects, start by expanding your knowledge and skills through advanced training or certifications. Network with experienced professionals in the field to gain insights and mentorship. Seek out opportunities to work on challenging projects or take on leadership roles within your current organization. Develop a strategic plan outlining your goals and steps to achieve them. Stay updated on industry trends and market conditions to make informed decisions. By continuously learning, networking, and pushing yourself out of your comfort zone, you can successfully tackle more complex commercial real estate projects and advance your career. You got this!

Two and a half years ago, I started to realize that just adding value to LP capital was not enough; I needed to multiply it quickly and with managed risk. I contacted a respected Luxury RV Resort feasibility consultant. After fostering a relationship, he gave me access to over 100 feasibility studies from past deals to meticulously study. In conjunction with spending several thousand hours studying other aspects of the outdoor hospitality industry, including zoning, construction, and competition, after ten months, I felt I had accumulated enough knowledge to build my first boutique luxury RV resort. Today, I have in-place purchase option agreements on more than 150 waterfront acres and plan to expand to 2,000+ pads in the next 24 months.

I cannot emphasize conservative underwriting enough. Even in a doomsday scenario, I will never do a deal resulting in principal loss. As a General Partner, your role in meticulously evaluating every potential financial and operational risk is crucial. It's not just about avoiding confirmation bias, but also about ensuring that you are not compromising on the quality of the deals you are considering. In the current challenging market, it's more important than ever to underpromise and overdeliver. If the appraisal says vacancy is 5% of EGI, I underwrite 10%+. If property management and R&M appraise at ~5%, I underwrite 10% each. If you believe rents will grow by 5%, assume 3%. If the deal still works, consider moving on to the other risks.

In the current market landscape, repurposing properties can be quite complex. From office to residential, or hotel or mixed-used, in addition to factors like regulations and zoning laws, there’s the factor of high construction costs. When securing financing, it couldn't hurt to look at public subsidies like tax abatement and increment financing. Remember to make sure to align your investment goals with the type of financing you choose, which will also depend on the type of property you’re investing in. Overall, whether it is a simple or complex project, securing financing starts with exploring all available lending options and choosing the one that suits you the best.

Do not waste time searching for a real estate investment if you are not 100% sure you can secure financing. The financing and terms usually make or break most deals. If you cannot secure it alone, bring in a partner who practically guarantees you can, even if it costs you 50%+ of the GP. The days of 80% LTV at 4% to every borrower are long gone. In the current market, a rising tide lifts all boats. Even with a strong track record and millions of dollars, most banks will still not extend non-recourse loans, highlighting the current challenges in obtaining financing.

One of the most valuable step in starting a complex project, picking the team. Although, everyone has a their own focuses, but working together on challenges for the better of development rather than one person or the other is most valuable. Picking a team that will work together for a year or longer is valuable and can make the experience!

Understanding the limits of your knowledge in complex deals is crucial. Your team is your backbone. A strong team can salvage a shaky deal, while a weak one can jeopardize even the most promising deals. Avoid recruiting the most advertised or renowned team member when entering new geographies. Instead, interview enough brokers, managers, engineers, and architects to find anomalies that give you a competitive advantage. For example, it's more beneficial to enlist a small, local architect with regular interactions with the planning board, rather than a big city architect with a background in skyscraper development.

It is commonplace in commercial real estate to believe that a project you are emotionally attached to and have invested in will have a shorter completion timeline than it will. Real estate is simply a classification of private equity, so everything moves very slowly. In addition, unforeseen complications will always emerge. It is not a matter of if, but when. When planning, you should be able to put together a realistic Gantt chart while incorporating at least a 20% buffer for both time and cost for unforeseen items.

When looking to start a new complex project is planning is understanding the marketplace you are going to be developing in along with the potential uses within the development. The following steps are made; 1. Composing a team that is expertise in their respective fields. 2. The team is nimble to adjust to risks and challenges throughout the development. 3. Allow all team members to speak freely when organizing a project charter.