Real Estate Development and Investment A Comprehensive Approach

by Peca, S. P.

• ISBN13: 9780470223086
• ISBN10: 0470223081
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-06-02
• Publisher: Wiley

Summary

This book provides a systematic and practical analysis of the various phases of the real estate development process. Taking a comprehensive approach, it covers the necessary topics of financing, accounting and construction in addition to several often-overlooked (but equally important) aspects of real estate development. Advanced Real Estate Development and Investment will educate readers on what comprises and is involved in the real estate development process and help them to gain an appreciation of the functional skills necessary to be successful. It will also enable them to understand and recognize the value of the ethical and human elements involved and understand what happens before and after a building is actually built.

Author Biography

Stephen P. Peca, Cpa, Mrics, is a Managing Director of Concourse Realty Group, LLC, and is an adjunct assistant professor in the Real Estate Institute of New York University. Before forming Concourse Realty Group, he was with Fleet Securities, Inc. Peca also has extensive experience as a commercial banker, chief financial officer, and property developer. Much of his work extends into overseas markets, and as such, Peca has extensive experience arranging international and cross-border transactions, including corporate, project, and infrastructure finance. Peca has a Certificate in Advanced Management from the University of Chicago and has a BBA in public accounting. He has received the New York University Award for Outstanding Service and is a Member of the Royal Institution of Chartered Surveyors as a Chartered Management Consultancy Surveyor. He is also a member of the Financial Executive Networking Group (FENG) and established and leads the FENG NYC Real Estate Special Interest Group and is a member of CoreNet Global.

Table of Contents

Preface	p. ix
Acknowledgments	p. xiii
Overview of the Development Process	p. 1
Economic Perspective	p. 1
Relevancy of Universal Knowledge	p. 6
Ground-Up Development versus Redevelopment	p. 14
The Six Phases of Development	p. 15
Business Ethics	p. 21
Relevancy to the Real Estate Industry	p. 21
Legislated Ethics	p. 24
Project and Development Teams	p. 29
Types of Developers	p. 29
Functional Disciplines in the Development Process	p. 30
Factors to Consider When Forming a Development Team	p. 34
Historical Perspective of Real Estate Development	p. 38
The Beginnings of Real Estate Development	p. 38
Major Events Causing Change in the United States	p. 45
Market Research	p. 51
Inception of the Idea	p. 51
Markets, Market Research, and Marketing (Analysis of Development Potential)	p. 52
Concepts That Define Marketing (and Markets)	p. 56
Using Market Studies and Preparing for Marketability Studies	p. 58
Sources of and Methods for Gathering Information	p. 62
Flaws of a Study	p. 63
Validate the Data and the Importance of Revisions and Updates	p. 64
Marketability Studies	p. 65
Showing That Your Development Concept Could and Should Be Built	p. 65
Importance of Marketability Studies Revisited	p. 68
Idea Refinement and the Application of the Marketability Study	p. 69
The Process of Idea Refinement	p. 69
Land Acquisition and Control	p. 74
Nonspatial and Spatial Markets	p. 76
Elements of Design	p. 77
Target Markets and Market Share	p. 79
Site Control and Acquisition	p. 81
Public and Private Restrictions on Land Use	p. 86
Land Planning and Siting	p. 91
Value Creation	p. 91
Project Programming and Design	p. 95
Elements of Design-Again	p. 95
Talking to End Users	p. 95
Tenant Mix and Marketability	p. 96
A Brief Word about Architectural Drawings	p. 103
Entitlement Process and Public-Private Partnerships	p. 105
Typical Community Approval Process	p. 105
Public-Private Partnerships	p. 107
Budgeting, Financial Analysis, and Capital Structure	p. 113
Preparing for the Financial Analysis and Pro Forma	p. 113
The Development Budget	p. 114
The Operating Pro Forma	p. 115
Review of Common Analytical Measurements	p. 115
Financing and the Capital Markets	p. 119
Short-and Long-Term Financing	p. 122
Financing Cycle-Anticipating Requirements	p. 126
Elements of a Feasibility Study or Deal Book	p. 127
Guarantees	p. 132
Contractors, Consultants, and Construction Contracts	p. 134
Budgeting and Scheduling	p. 134
Contractors and Construction Contracts	p. 135
Risk Management during Construction	p. 136
Preparing for Construction: Bid Proposals and Review	p. 138
Construction Documents and Construction Agreements	p. 139
Risk Management: Part 2	p. 141
Scheduling	p. 142
Bonding and Insurance	p. 142
Construction Monitoring: Draw Meetings, Managing Change Orders	p. 145
Tenant Improvements and Coordination	p. 148
Construction Closeout	p. 149
Leases and How They Are Used	p. 151
Value Creation	p. 151
What Is a Lease?	p. 151
Common Lease Structures	p. 152
Lease Management and Analysis	p. 154
Marketing Focus of Development	p. 157
Know Your Target Audience	p. 157
Your Essential Vision	p. 160
The Importance of Branding	p. 161
Image, Identity, and Communication	p. 161
Components of Marketing Centers	p. 162
Investment Management	p. 164
Function and Goal of Property Management	p. 166
Function and Goal of Asset Management	p. 167
Function and Goal of Portfolio Management	p. 168
Property Life Cycle	p. 169
The Future	p. 171
Recent History-Where We Left Off	p. 171
Apparent Future Trends	p. 173
Green Development and Smart Growth	p. 174
Social Responsibility and Ethics	p. 177
Glossary	p. 179
Index	p. 201
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