Michael Snedeker serves with Shellback Industries in the Boston area, where he assists in matters regarding commercial construction and real estate. Experienced in various areas of commercial construction and real estate, Michael Snedeker understands the intricacies of managing risk in real estate development.
Understanding the risks associated with real estate development is a crucial part of the process due to its lengthy, complicated nature. Projects can take years to complete, and obstacles may arise at every phase.
Two factors play the biggest role in determining the risks involved in real estate development: project type and stage. The project type generally determines the amount of risk across the project's lifespan since some types involve a higher degree of risk. The overall risk tends to decrease the closer the project comes to completion.
Project types fall into two broad categories: built-to-suit and speculative. Built-to-suit projects involve less risk across all stages since builders and developers identify buyers and their requirements prior to the project’s start. This also gives the project a higher chance of success.
Speculative projects base construction on prevailing market trends or estimated property appeal. Since demand and market trends can shift over the course of development, the risks run higher, and the chance of success may vary.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.