The Three Stages of Commercial Real Estate Development

Great commercial real estate projects don’t spring up overnight. It takes a little time to get the details right. In fact, the typical commercial real estate development project consists of three phases. Before you embark on a project, it’s important to know roughly what these phases are and what each consists of.

The Pre-Development Phase

To lay the foundation for a successful project, it’s important to do your due diligence—and that includes doing some research and some permitting. This pre-development phase is the most unpredictable and it carries the greatest risks of any of the three phases, simply because there are so many unknowns. During the pre-development phase, though, you’ll bring those unknowns to light, and have a better sense of your project’s potential scope and feasibility.

This phase might consist of any or all of the following:

  • Market analysis
  • Acquiring (or securing the option rights to acquire) land
  • Environmental assessment surveys
  • Site planning/building planning
  • Securing the proper permits
  • Arranging the necessary financing
  • Making any necessary improvements to the infrastructure

Note that, as you acquire a land use permit, you may run into some specific hurdles—including the need to rezone, disputes or appeals from neighbors, etc. Again, these factors make pre-development fairly difficult to predict.

The Construction Phase

As your project comes into focus and you begin the actual construction, the risk and uncertainty are reduced—though not eliminated. Some of the considerations during the construction phase include:

  • Vertical construction
  • Project marketing
  • Using your construction financing
  • Pre-leasing
  • Enlisting a property manager

Once you secure a certificate of occupancy, that means the construction phase is over—and you’re ready to commence regular operations of the building.

The Operation Phase

During this phase, the life of your building has begun in earnest. Some of the considerations here include:

  • Ongoing marketing
  • Ongoing leasing
  • Either finding a buyer or enacting a hold strategy
  • Active property manager (working with your property manager)

Ultimately, this phase is all about stabilizing the operation of your building—and ensuring that it remains financially healthy and robust.

As you can tell, each of these three phases comes with plenty of activity, and a lot of factors to weigh—and trying to juggle all these concerns on your own can be daunting. That’s one good reason to enlist the services of a Commercial Real Estate Developer.

At Kuester CRE, we’ve turned spaces into places all across the Carolinas. For decades we’ve been a leading name in commercial property development, and we’d love to speak with you about the services we can offer on behalf of your project. Reach out to Kuester CRE and let’s start that conversation! Call our toll-free number: 855-723-2500.

Corporate Office

127 Ben Casey Drive, Suite #103
Fort Mill, SC 29708

Call for Inquiries


Send Us an Email
Scroll to Top