Determining The Feasibility Of A Commercial Land Development Project

Commercial real estate projects costs millions of dollars to develop and they are quite time consuming as well. As a business, you want to take these decisions very carefully. One way to go about it is to determine whether the project in question would actually be feasible or not.

What is a feasibility study?

A feasibility study is an all-encompassing way of determining the success of a project. It’s commonly used across businesses whether it’s for expansion, diversification, or investment purposes. For a feasibility study, you take into account the demographic, analyze the economic impact, technical impact, legal impact, and effect of competition on your business too.  Market research uncovers valuable information that can determine the success of failure of a particular project.

Demographic trends

For the purpose of this article, let’s assume the project being spoken about is a multifamily commercial building of offices.

This kind of property will be lucrative in areas with a working population, i.e. 18 to 66 years of age. People prefer living in close proximity to their workplace to prevent spending hours commuting, particularly those who have moved away from family to focus on their career. Commuting over long distances is also more expensive. When doing research on the feasibility on an office complexes, location also plays a huge role.

Net present value

The Net Present Value of a property is the difference between cash inflows and outflows of a project. For the net present value of a project all predicted inflows and outflows are adjusted considering the time value of money as well. It’s a great way to determine the true profitability of a commercial project.

Feasibility of the location

Location is essential for any commercial property. Since the project in question is a office complex, developing this project in the city’s commercial hub is essential. You need to be close to potential clients and easily accessible to employees as well.

If you require reliable commercial financing options for a land development project, get in touch with Global Capital Partners Fund. This private lending company has over 30 years of experience in the industry. They have worked with many clients providing loan over $100 million.  They provide hard money loans and bridge financing in Aurora, IL, Davenport, IA, Des Moines, IA, . Get in touch with their agents for more assistance at +1-800-514-7350.

Categories: Real Estate

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