ESTATE SURVEYOR & VALUERS AS A STAKEHOLDER
C Darl Uzu
Definition
Developer – Traditional
 Owns Finished Product alone or with others


Identify and acquire the land
Assemble the Development team
 Contribute Equity, Financial and Sweat
 Receive Economic benefits/loss
Development Products
 Housing
 Commercial


Office
Warehouse
 Retail

Shopping
 Hospitality


Hotel
Apartments
 Combinations
Real Estate Development Process
 Interplay of series of steps required to move from concept
to completion successfully.
 How Development Nodes/Matrix




Market
Site
Finance
Management
Play at each stage of Development Process
 Concept Development
 Feasibility
 Design Development
 Construction Documentation/
Construction Bid
 Construction
 Lease Up/Sales Or Asset Management
Development Process Matrix
Dev.
Nodes
Dev.
Stages
Market
Site
Finance
Management
Concept
Development
Feasibility
Design
Development
Construction
Documentation/
Construction Bid
Construction
Lease UP/Sales Or
Asset Management
Concept Development
 Market

Identification of Target Market
 Site



Identification of Site
Evaluation of Buildability Issues (Environment, Zoning, Massing
Building Ratio)
Assemble Development Team
 Finance




Estimate Development Cost
Operating Budget
Identify prospective funding source
Pre development Fund to pay for pre-development expenses
 Management


Project Parameters/Summary
Establish Project Thresholds
Feasibility
 Market



Market Analysis
Determine current and proposed supply
Determine Demand
 Site




Title Report
Survey (Boundary and Topography
Environmental Survey (EIA)
Preliminary design
 Finance
Prelim Proforma






Estimate Revenue, Expenses and NOI
Estimate Development Cost for Project
Create a Sources and Uses of Schedule to determine Debt & Equity
Levels
Build Income Statement to Net Income
Distribute Development Costs and Determine Debt and Equity
Required
Calculate the Internal Rate of Return (IRR) for project
Determine Potential funding Source(s)/Strategy for
raising financing
 Management


Project Development Work Plan/Programme
Contractual Arrangement with Design/Development Team members
Design Development
 Market



Sales Marketing Plan
Management Contract
Preleasing or Presales
 Site






Spatial arrangement
Sizing of Uses
Specification of Equipment and materials
Aesthetics
Value Engineering
Obtain Building Permits/Approvals
 Finance


Finalize Proforma
Secure Funding Commitment
 Management


Manage Design/Development Team
Establish Project Accounting System
Construction Documentation/Construction Bid
 Market

Conclusion of Pre Lease/Sale
 Site




Construction bid package
Contract /Bid Negotiations
Due Diligence Searches
Award of Construction Works
 Finance


Receive Commitment on Funding
Loan Documentation and Closing
 Management
Establish
 Schedule
 Information flow
 Construction coordination system
Construction
 Market

Execute leases/Sale Agreements
 Site



Monitor Construction Progress
Inspection by Planning Control and Funders
Resolve Punchline Issues
 Finance



Monitor drawings/Loan Administration
Monitor Interest Cost
Budget Management
 Management






Schedules
Team Meeting
Milestones
Reviews
Negotiations
Establish Construction Coordination System
Lease UP/Sales or Asset Management
 Market



Supervise Move in
Implement Property Management Plan
Post Lease/Purchase Counselling
 Site


Maintenance Plan
Capital Replacement Plan
 Finance




Close on permanent financing
Monitor Financial performance and make changes as needed
Capitalized operating and replacement reserves
Refinancing or Sales
 Management



Monitor performance of Property Manager
Compliance reporting to funders
Reflection on how project threshold are met
Stages of Development
Dev.
Stages
Concept
Development
Feasibility
Design
Development
Construction
Documentation/
Construction Bid
Construction
Lease UP/Sales Or
Asset Management
Market
• Identification of
target market
•Market Analysis
•Determine
current and
proposed supply
•Determine
demand
•Sales marketing
plan
•Marketing contract
•Preleasing or
presales
•Conclusion of Pre Lease /
Sale
* Execute leases /
sales agreement
•Supervise move in
•Implement property
management plan
•Post lease/ purchase
counselling
Site
•Identification of site
•Evaluation of
buildability issues
(Environment, Zoning,
Massing Building
Ratio)
•Assemble
development team
•Title report
•Survey
(Boundary &
topography)
•Environmental
survey (EIA)
•Preliminary
design
•Spatial arrangement
•Sizing of Uses
•Specification of
equipment and
materials
•Aesthetics
•Value engineering
•obtain building
permits/ approvals
•Construction bid package
•Contract / bid
negotiations
•Due diligence searches
•Award of construction
works
•Monitor
construction
progress
•Inspection by
planning control
and funders
•Resolve punchline
issues
•Maintenance plan
•Capital replacement plan
Dev.
Nodes
Stages of Development (Contd)
Dev.
Stages
Concept
Development
Feasibility
Design
Development
Construction
Documentation/
Construction Bid
Construction
Lease UP/Sales
Or
Asset
Management
Finance
•Estimate
development cost
•Operating budget
•Identify prospective
funding source
•Pre development
fund to pay for
feasibility
Prelim Proforma
•Estimate revenue,
expenses and NOI
•Estimate Development
cost for project
•Create a source and
uses of schedule to
determine debt & equity
levels
•Build income
statement to net income
•Distribute development
costs and determine
debt and equity
required
•Calculate the Internal
Rate of Return (IRR) for
project
•Determine potential
funding source(s) /
strategy for raising
financing
•Finalize
proforma
•Secure funding
commitment
•Receive commitment on
funding
•Loan documentation and
closing
•Monitor drawings /
loan administration
•Monitor internet
cost
•Budget management
•Close on permanent
financing
•Monitor financial
performance and
make changes as
needed
•Capitalized
operating and
replacement reserves
•Refinancing or sales
Management
•Project parameters
/summary
•Establish project
thresholds
•Project development
work plan / programme
•Contractual
arrangement with
design / development
team members
•Manage design /
Development
team
* Establish Project
Accounting
System
•Schedules
•Team meeting
•Milestones
•Reviews
•Negotiations
•Establish
construction
coordination system
•Monitor
performance of
Property Manager
•Compliance
reporting to funders
•Reflection on how
project threshold are
met
Dev.
Nodes
Risks & Skill Concept
Risks &
Skills
Dev.
Stages
Risks
Concept
Development
Feasibility
Design
Development
Construction
Documentation/
Construction Bid
Construction
Lease UP/Sales Or
Asset
Management
1.
Naira invested
without
certainty of
funding
1.
1.
1.
2.
3.
4.
1.
3.
Optimizing best
use of land.
Optimizing
design itself in
terms of
architecture, cost,
functionality and
buildability
1.
Man hour
invested could
be lost
Naira invested
without certainty of
funding
Land Acquisition
and holding cost
Prioritizing
development
opportunities
Potential
environmental risk
Market Research
Leadership quality to
manage
Prepare Project
proforma
Understand the credit
market and knowledge
of finance
1.
Leadership to
manage process
Network
Credibility
1.
2.
3.
4.
5.
6.
2.
2.
4.
Skill Set/Tool
1.
2.
3.
4.
Understand the
market
thoroughly
Know Design
Professionals
Pre
Development
Budgeting
Planning/Zonin
g
1.
2.
3.
4.
2.
2.
3.
2.
3.
4.
Significant naira invested
without certainty of
funding
Growing land holding
cost and pre
development expenses
Funding Risk
Time line uncertainty
Organization
Coordination
Knowledge of Accounting
Marketing
Experience in product
Negotiation
Interest rate risk
Schedule risk
Quality risk
Cost over run
2.
3.
4.
1.
2.
3.
Leadership
Accounting
IT
Lease up within
schedule
Market rent vis-àvis proforma rents
Compliance risk
Meet first year
credit delivery
projection
1. Asset Management
Thank everyone who helped and mock
all that gave you hard time
Acknowledgements:
Commercial Real Estate, A publication of Realties, Commercial Alliance National Association of
Realtors
Real Estate Development, Breaking into Wall Street
William J Poorvu
2003
Financial Analysis of Real Property Investments Harvard Business School
Real Estate Development, Rick Peiser Graduate School of Design, Harvard University
Real Estate Development, A Capital Access Group, San Francisco Study
Portfolio Optimization,
Anna Naguruey, University of Massachussets
Development Strategy
Design
And Implementation,
John Macomber, Real Estate Academic Initiative Graduate School of
Harvard University