Structure and or Site Development capability can create considerable benefit……by simply knowing what the options are….or by executing a Development Strategy.
Our Seller Clients can garner at closing Current Value plus a percentage of the difference between Current Value and available Future Development Value … and do so without incurring any capital improvement and or approval costs.
Our Investor/Developer Clients will enjoy a fully supported Development Due Diligence and Return Analysis…. and, if reviewing an Acquisition Candidate not listed by TWG, will have access to our decades of Feasibility Expertise.
Our Advisory Clients, will benefit from Development Analysis quantifying Available Value Increase for Current and or Future Assets. The “benefit’ would be Increased Current Value driven by knowing what Future Value could be…and the “benefit” can be realized by executing some or all Development Elements outlined in our Feasibility.
Development Feasibility Valuation
We specialize in Asset Brokerage using Increased Sale Offering Price supported by Development Opportunity Analysis…..through Partial, Ground Up or Assemblage Development Strategies. Consideration to Ordinance and Zoning Provision interpretation, Master Plan Intent, area activity, short and long term demand probabilities and Variance Precedent is critical to Value….and to the success of a Development Application.
This very specialized element within our Service Bundle is performed as part of a Market Valuation for committed sellers …. or on a Retained Consultative Basis.
Partial or Complete Existing Structure and Site Development provides substantive Value Increase from Current Market Value…..by simply knowing what the Development Options are … and there is often no cost to a seller to garner a percentage of this increase at closing.
Conventionally….Development Value Increase is guided by various levels of capital improvement resulting in either a Use Change or dramatically improved income through Tenant Repositioning within the same use.
An incremental improvement approach has flexibility, usually allows for enough time for return verification and lessons upfront resource allocation. However, if the ultimate goal is for substantive or complete development…. performing incrementally, over a longer time period, will increase total costs and decrease total revenue through the hold period.
A Ground Up Development has high returns, generally offsetting risk. Determining this Value requires generating of what is in essence…. a Preliminary Application.
Site plans and rendered elevations may be generated ….all guided by unit yields, use capability, impervious surface and parking requirements as identified within Zoning and Ordinance Provisions. The “Preliminary Application” is presented to municipality planning and council members…..and in some cases to a Historic Preservation Committee. Our findings, confirmed and or adjusted then become foundational within a Marketing Campaign or Valuation.
Highest and best use categories are then comped to confirm local lease and sale tolerances. Finished Value of completed Fully Absorbed product is derived using current Vacancy and Credit Loss Matrix, Estimated Operating Expenses and an acceptably low cap rate. Regionally accepted soft , financing, labor and material costs are deducted from that Finished Value…. yielding Before Development Value, which historically far exceeds Current Market Value.
Assembled Development Value conventionally has the highest possible Asset value. A site on its own may not have ground up development capability but does when coupled with one or more contiguous neighbors. Each property within an Assemblage becomes more valuable simply because it is assembled with one or more contiguous sites.
A larger site enjoys enhanced options with a Municipality and greater cost amortization through the residential and or commercial unit yields. It also allows the/a developer to “create an environment”….. increasing per unit margins.
A Seller knowing Assembled Development capability and corresponding Asset Value is integral to garnering part of the Value Increase at Disposition. A Buyer enjoys an extremely healthy Added Value Capture by acquiring multiple contiguous properties at Investment Value that at closing, convert to the much higher……Assembled Development Value.