What Exactly is Land Development?

What Exactly is Land Development?

Any business’ goal is growth, and often, the best way to expand a business is to acquire and develop a new property you can grow into. A company expansion that involves acquiring and developing a new property is exciting, but it can also be daunting to sit down and really take a look at all the things you need to do before you have a completed facility to sell, lease or use. Sometimes you’ll hear the terms “land development” and “real estate development” used interchangeably. In any case, it also likely came with a warning – it’s a complicated and involved process no one should go into without having done exhaustive research. And while land development and real estate development are not the same thing, one does have to do with the other.

Raw land development describes the processes involved in changing a parcel of land into a leveled area that can accommodate buildings, whether it’s houses, businesses, a warehouse, etc. This will also encompass laying property lines and running utilities. Real estate development, on the other hand, is a much broader term. It can encompass the entire process of buying acreage, developing it and then putting that acreage up for sale. But it can also refer to the process of renovating or rehabbing existing commercial properties and then putting them up for lease or sale. So, land development is a type of real estate development, but definitely isn’t the only thing a real estate development company does.

Land Development Services Cover a Lot of Ground

One of the reasons The Schueler Group of Companies has an in-house firm solely dedicated to providing land development services is that it’s an important part of most commercial land acquisitions. It’s also a middle step for many commercial real estate ventures, so if you’re not extremely knowledgeable about the processes of developing a raw parcel to sell or build on, you can easily get lost in the process. Thankfully, our in-house land development company, Bunnell Hill Development, makes this a seamless process. On the front end of a project, they work with our commercial real estate agents and brokers at Henkle Schueler & Associates on the land acquisition process, and on the back end they work with our commercial construction company, Bunnell Hill Construction, from the building process to project completion. Bunnell Hill Development is the most prolific land development company in the Southwest Ohio/Northern Kentucky commercial real estate markets, so at this point they’re experienced enough to make the land development process look a lot simpler than it actually is.

The Process of Developing Commercial Land into a Commercial Property

The simplest way to explain raw land development might be to separate it into four stages, each of which includes several sub stages that are each as important as the next. We’ll refer to our four broad stages as pre-development, pre-construction, construction, and project completion. These steps will take us from a parcel of undeveloped farmland for sale all the way to selling, leasing or marketing a completed commercial or industrial property.

  1. Pre-Development

Okay. So you’ve shortlisted a couple plots of acreage for sale as the ideal location for your land development project. What do you do now?

  • Research: Educate yourself on the areas surrounding the plot, considering things like visibility, access to major highways, proximity to existing commercial areas/corridors, and the general condition of the local economies.
  • Feasibility: Conduct a systematic study to help you predict the viability of the type of commercial property you’re going to develop. This includes things like determining your budget going forward as well as what you expect in return upon project completion. You should also gain a well-rounded understanding of the local market as it applies to your project.
  • Permits and Zoning: Before investing in a piece of commercial land, you should know exactly what you can and cannot build on that land. What’s the opinion of the local governments? What limitations will you face with this parcel of land? Be sure you’ll be able to get all the permits you need before moving forward.
  • Land Acquisition: AKA purchasing the plot of land. The steps you took before actually putting an offer down and initiating the land development process are going to help you determine what’s a good deal and whether or not you need to switch to a Plan B. The important thing to remember here is that you should never go into this stage blind. Commercial real estate is a field where we’re always working with big numbers. There are often multiple investors and complicated financing. If you haven’t done your research before signing a contract on a piece of farmland that was for sale, you could make a horrible decision that will put you andyour investors under water, and could even kill your entire project.
  1. Pre-Construction

So, you’ve chosen a piece of commercial land, done all your research, and have acquired it. The steps you take in this phase will do a lot to determine how smoothly the construction phase goes.

  • Planning: You’ve likely had a pretty clear idea of what you want your commercial property to look like upon project completion, whether you’re just trying to prep parcels to sell, or building a commercial or industrial building on the land. Architects and engineers should be involved in this step. Establish a schedule. Once you’ve finalized your plans, you’ll need to revisit the local government to get final approval.
  • Horizontal Construction: This step will include any terraforming you need to do, such as levelling a hillside or stabilizing a questionable slope at the edge of the parcel. It also includes running the necessary utilities before construction begins.
  • Choosing a Contractor: Once you’ve got all your ducks in a row with budget, financing, planning and prepping the plot of land, you need to vet various commercial general contractors and decide on who to hire. This is another reason why working with The Schueler Group on any land development or real estate development project has huge advantages: we also have an in-house commercial construction company, Bunnell Hill Construction; so we can get you through this entire process all with one single point of contact.
  • Permitting: Go get any and all permits you need to begin the construction process. Research on the permitting process should have been done in Pre-Development, so this process should basically be checking things off a list that you already made.
  1. Construction

When all your plans and permits are finalized and ready to go, that’s when things become real and you get to break ground and begin construction. The construction phase is a delicate balance of waiting, watching and managing. You’ve got to make sure things stay on track, on time and on budget. And when complications arise, as they always do, you need to know that the commercial general contractors you’ve hired will communicate with you and help you find the best way forward. It’s important to remember that while all that planning and prepping was absolutely vital to the success of your land development project, there will be times when you need to alter your plans a bit. It’s nothing to do with commercial construction itself; that’s just the way life is. And don’t forget to always be ready for inspections – another reason the contractor you choose is so important – you need someone you can trust to follow codes and regulations.

  1. Project Completion

Alright, we’ve made it almost all the way to the finish line. Arguably, we’re fully into the field of real estate development now. What you do next will depend on the purpose your new facility is supposed to serve. If it’s an investment property, now’s the time to market. If you’re going to sell it, now’s the time to list it. If you’re going to lease it, now’s the time to find a top-notch site management company to maintain the site once it has tenants. You’ve also got occupancy permitting, fire and safety inspections to pass, regardless of how you’re going to handle the property.

Things to Think About When Browsing Acreage for Sale

If your business is looking to expand and you think the best strategy to expand is to acquire farmland or empty acreage for sale, you likely have a much better idea of what to look for now. Location, viability of the local marketplace, zoning, budgets and financing will all affect what piece of land is right for your company expansion. Working with an experienced, local commercial real estate agent is key here, as they can guide you through the details and advise you on what the best site for your land development project might be.

Bunnell Hill Development: Schueler Group’s Land Development Company

The Schueler Group of Companies is a vertically-integrated, full service commercial real estate company that navigates and facilitates all steps of commercial real estate development:

    1. Henkle Schueler & Associates handles the brokerage and financing aspects of commercial real estate projects.
    2. Bunnell Hill Development handles the land development processes we discussed in this post. They work closely with Henkle Schueler as well as Bunnell Hill Construction.
    3. Bunnell Hill Construction provides commercial construction services for real estate development projects. Their starting point on any given project overlaps with Bunnell Hill Development’s endpoint, making the handoff between land development and commercial construction seamless.
    4. Schueler Group Property Management provides site management services for all our commercial and industrial properties. We lease office and retail spaces, warehouses and more, and we provide inclusive, responsive ongoing site management services to all our tenants.

So, yes, land development and real estate development in general have a lot of moving parts that all need to cooperate and stay on the same page for your project to be successful. That’s why Schueler Group has spent over 80 years becoming the most experienced and sought-after comprehensive real estate services firm in the Cincinnati-Dayton and Northern Kentucky commercial real estate markets. So if you’re looking for help with business growth, we’re the ones to call.

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