Commercial development refers to the purchase, construction, management, and leasing of commercial property or real estate. Commercial property differs from residential property, where people live; it applies instead to income property, investment property, and other business-use properties, like work offices and retail centers. Professionals who manage the acquisition, building, and income generation for these properties are called commercial developers. At Castle Development Group, we help with all steps of this process, so you can focus on what’s most important to you. Let’s look deeper at commercial development and what it means.
What Is Commercial Development?
Commercial development encompasses many aspects, and it’s a powerful way for investors to increase their profit by leasing improved lots and buildings to clients and businesses. Both businesses and individuals can engage in commercial development, and those that do are called commercial developers. Here are some of the various phases of the commercial development process explained:
Identifying Viable Commercial Spaces
The first step in any commercial development process is locating the area to develop. This can take extensive research and an understanding of market demands, building viability, and project budgets. In order to develop a lot or existing building for commercial use, the area needs to be commercially zoned. It is possible to change a lot’s zoning status, but this can take lots of time to execute successfully. If there are existing buildings on the lot, it’s also important to understand maintenance requirements and if there are currently tenants occupying the buildings.
Purchasing Commercial Spaces
Once a developer identifies the commercial space they want to develop, they can purchase that space using cash, a mortgage or other financing means. From there, they can get additional financing to build a structure. Or, if an existing structure exists, they can begin developing the property. If they’ve purchased an existing structure with tenants, they can work on lease agreements with those tenants.
Often, developers specialize in developing particular kinds of spaces, like strip malls or office spaces. The benefit of developing for a singular niche is it’s often easier to coordinate things like business upkeep, hours, and lease types. It can also help developers create stronger business models, because they understand their business and their goals as they relate to their customers and their reputation within that business area.
Developing Commercial Spaces
Some developers engage in commercial construction, which differs from commercial development. They might develop an empty lot to establish a business in that space, which can help communities and businesses in an area grow. Development of existing properties can range from extensive remodels to general maintenance. This phase of the development process depends a lot on the developer’s goals, the type of commercial business space they’re creating, and the existing status of the commercial property.
Managing Commercial Spaces
Some commercial developers handle management tasks on their own, and others turn to project management companies to fulfill these responsibilities for them. Managing properties means upholding lease agreements, performing regular maintenance and handling lease applications. Relationship management with lessors is also important when managing commercial spaces. How difficult or easy a building is to manage can depend on the structural soundness of the property and the overall development goals for the space.
Leasing Commercial Spaces
Leasing commercial spaces differs from leasing residential spaces. When leasing a commercial space, tenants often sign multi-year agreements. These leases might detail what lessors are required to fulfill as part of their agreement. This might include building security clauses, maintenance requirements, restrictions on what building owners can sell, and signage rules. Typically, all of this information is in the lease so that lessors, property managers, and developers all understand their requirements and expected contributions.
What Isn’t Commercial Development?
Commercial development doesn’t refer to industrial development projects, or the building large-scale infrastructure like hospitals or airports. It also doesn’t refer to residential building, like building homes for people to live in, though a commercial developer might build an apartment building to lease. Commercial construction can differ from commercial development, and often encompasses other aspects of the construction process that include permitting, safety measures, and work with outside contractors.
At Castle Development Group, we offer many services related to commercial development and property management. Our goal is to make development as easy as possible for investors so they can maximize their investments and find success in their projects. Here’s a look at some services we offer:
- Pure development: We offer development services for anyone looking to build medical, retail, professional commercial spaces, and more. This means both ground-up construction and building improvement so you can create the best possible space for your business needs.
- Development management: Our team also handles development management. We focus on providing fast, cost-effective, and expert management services to handle all phases of the development process.
- Construction management: Our group offers full-service construction management, so you can rest easy knowing your project is meeting all your scope, cost, time, and quality needs.
- Equity investment: Our office provides equity investment opportunities so you can start realizing some of your financial goals. Our expert advisors and investment team can meet with you to find the best opportunities available.
- Property management: Keeping up with commercial spaces takes a lot of work, which is why we offer property management services to keep your investments organized and on track. We build tenant relationships and pridefully maintain your assets, making it easy to trust that your spaces are in excellent hands.
- Brokerage services: Our team is here to make your development goals a reality. We offer financing and also handle acquisitions and depositions for our clients so they can achieve all their real estate goals.
Why Castle Development Group?
With over 30 years of experience in development, development management, commercial construction, and property management, the professionals at Castle Development Group are your go-to resource for commercial development and investment. Our expert team is prepared to offer turnkey solutions and advice so you can realize all your real estate goals.
Contact us today to discuss your project or learn more about what we do. We strive to always go above and beyond for our clients, and to be your trustworthy source for asset sales, development, management, and more. With us, it’s easy to make success in commercial development possible.