Has the volatility in the real estate market, stemming from the pandemic, made you question your development strategy and if you should proceed? As new construction projects are delayed and potentially canceled due to the uncertainty caused by COVID-19, owner and developers are being forced to rethink their overall goals and objectives to determine a new path forward.
If you’re in this position, then you are thinking in the right direction, as this global pandemic should force all owners and developers to proceed with caution and with a broader perspective. Having served as the trusted advisor and steward on hundreds of projects through three economic downturns, our development, project and construction management team understands how to guide our clients through the challenging process of change, determining the new true north that leads to your financial requirements, which maximizes the value of what has been accomplished to date while proceeding in an alternative direction when the circumstances dictate.
I have always been a proponent of bulleted summaries, to rapidly convey information or to provide guidance in a concise format. To that end, below is a quick bulleted list which summarizes CM&D’s proven key first steps that should be taken when rethinking the direction of your real estate project.
1. Host an “All Hands On Deck” Development Charette
a. Who should attend? Bring all your key development team members to the table for a constructive work session focusing on all available development strategies for your project. Key development members should include but is not limited to:
i. Owner’s advisor development and project manager
ii. Architect, interior designer and key engineers
iii. Entitlement consultants such as expeditors and/or attorney
iv. Sales and marketing team
v. Third party operators and/or management firms
b. Where should this be? Ideally in person, as long as you adhere to social distancing and everyone is comfortable, but if needed conduct this virtually.
c. How long should it be? 4-8 hours dependent upon the size and complexity of your project.
d. A detailed agenda with any supporting information should be provided to all participants at least one week prior to the Charette and map out the day, the purpose and intended outcomes for everyone to properly prepare.
e. To start, clearly summarize your values, vision, financial objectives, expectations on schedule and remain open to how these are achieved. There can be no pre-conceived expectations.
f. Remember there are no bad ideas in a Charette, unless one is quickly dismissed without respectful consideration.
g. With all disciplines from your development team present, you will receive diverse perspectives and ideas on what development strategy to take.
h. Ensure the Charette is property moderated to allow you, the owner and/or developer to focus on listening and taking in the constructive back and forth.
i. For each development strategy idea, weigh the pros and cons not versus each other but how they are in alignment with you and your objectives.
j. Conclude the Charette when you are satisfied that all options have been put forth and a clear direction is identified that will give you the highest probability of success while meeting your values, vision and financial objectives.
Next month, we will focus on what happens next. When the high of a successful Development Charette wears off, what are the critical next steps that need to be taken to continue the positive momentum of your reinvigorated project?