Criteria Definition: Setting the Right Course
Defining precise criteria is a cornerstone of our approach. The principals of The GeoFocus Group utilize lessons learned from current/past developments and projects to maximize efficiency during this process. Items such as development budget, investment horizon, quality of construction, post-construction operations and exit strategy are a small sampling of the items considered prior to initiating the search for developable land/product.
The image above is an example of a real-world site acquired in June of 2021. A sampling of criteria established to initiate site selection for this development included: 50+/- units, ability to design for surface parking, relatively flat topography, ability to intensify, ability to construction multiple buildings with a phased concept, secondary/tertiary market with low vacancy rate and strong rental rate growth, municipality/region with a strong CIP (community improvement program).
Site Selection: The Crucial Starting Point
With the criteria set, whether for ourselves or for our clients we work tirelessly to structure the proposed development for success from as early as the site selection phase. This is where the money is truly made. While the image above is an example of a real-world site acquired in June of 2021 it was one of 12 sites vetted that met with the development criteria outlined above.
Entering a municipality previously unknown to The GeoFocus Group the following link: Real Estate Land Development – A Case Study outlines steps taken after the firm’s principals negotiated a conditional offer. Items such as: retaining a Land Use Planner, participating in the Pre-Consultation Process and coordinating due diligence investigations such as geotechnical, hydrogeological and a phase I environmental site assessment all the way through to the eventual closing of the agreement of purchase and sale, successful coordination of all consultants required to obtain variances to permit intensification of the site to 142 units as well as the negotiation of both municipal and regional incentives/grants totaling in excess of two million dollars over 142 units. The following link featured in the Owen Sound Sun Times outlines the regional component of those agreements: Hanover Offer Incentive to Rental Apartment Developer | Owen Sound Sun Times.
Extensive Due Diligence: Uncovering Pitfalls
Our commitment to site selection goes deeper than simple establishing criteria and site selection. We know that “in real estate, money is made on the purchase, not on the sale”. Our due diligence efforts are extensive and exhaustive reviewing such items as as-of-right zoning, entitlement/approval requirements for proposed concepts, geotechnical investigations, hydrogeological investigations, and engage in extensive discussions with our network of consultants to vet other potential issues that could have a significant impact on development costs and schedules.
Appropriate due diligence not only provides the opportunity to mitigate risk but to ensure that you are purchasing for success. Identifying risks early ensures that you can accommodate for them either via your closing price/terms and/or your design. Poor soil conditions – consider soil improvement. High water table – consider repositioning the proposed footings/foundations to a higher elevation.
You Don’t Purchase Vacant Land?
Our next newsletter will feature a similar cast study; however, on a building that was initially destined for conversion. Unfortunately (or fortunately) The GeoFocus Group’s efforts to identify all of the challenges/risks associated with converting the existing structure to a mixed use development within the confines of the existing structure proved to push the project outside of the realm of viable/feasible.
The image below is an example of a real-world site acquired in January of 2023. A sampling of criteria established to initiate site selection for this development included: 30+/- units, ability to convert an existing structure into rental units, ability to convert with as-of-right zoning, secondary/tertiary market with low vacancy rate and strong rental rate growth, municipality/region with a strong CIP (community improvement program).
With the challenges identified the existing Owners and The GeoFocus Group utilized those challenges to set the stage for potential intensification. Teaming up to facilitate the demolition of the existing structure through an HCD (heritage conservation district) and now to bring additional rental stock to the municipality below is the latest concept for the development which includes for a 110 +/- unit purpose built rental development.
Ready to discuss your next project with us? Let’s collaborate. Take action and set the stage for your proposed development’s success. We invite you to leverage our wealth of expertise and real-world insights. To explore how The GeoFocus Group can help you achieve your goals, please schedule a consultation by clicking the link below.
