Real Estate Journal — Owners, Developers & Managers — February 26 - March 10, 2016 — 3B
M id A tlantic
O wners , D evelopers & M anagers By Barry Schmidt, Schmidt Construction Consulting Designing the best product for your residential dev. site
n light of the inherent challenges of construc- tion projects the devel-
to no return from your buyers or renters? A critical aspect not obvious from the outside is the unit mix, or the mix of different types of apartments contained in the building. Is the building to contain hun- dreds of micro studios or far fewer 4-bedroom duplexes? Likely it will contain a mix of varying sizes, so optimiz- ing the mix of studios, 1 & 2+ bedroom apartments needs to be carefully done to maximize returns while minimizing the downside risk of shifting market preferences. Within each of the units in the mix the unit layout is also
crucial. Are the 2-bedroom units to have larger bedrooms relative to the kitchen and liv- ing area or vice versa? Again, only people intimate with what this specific market de- mographic is demanding will understand what the optimal mix and sizes of your units needs to be. Finishes, cabi- nets and fixtures also have an important cost sensitivity relative to returns and need to be considered carefully. The importance here is that any changes made after completion of the design docu- ments will cause construction continued on page 6B
oper needs t o a l wa y s keep thei r t o p i n t e r - ests front of mind, those being time and money. A l t h o u g h p r o b l e m s
implementing construction can have a huge impact on both, often issues with the design itself have the greatest impact on the developer’s rate of return. With that in mind it’s crucial to approach the design process with an eye on maximizing returns. The building being de- signed is a product to be of- fered to the market for either sale or lease. In either case the developer needs to maxi- mize their rate of return, and in order to do that the design of the building, both aesthetic and functional, needs to be optimized for the desires of the precise demographic be- ing targeted. Demographic issues include the age, family status and income of the buy- ers or renters, and the prefer- ences among that group for those who want to live in the development’s neighborhood. But who understands the target market best? Is it you the developer? Unless you’ve been selling or leasing hun- dreds of residential units to the exact demographic you are targeting at this precise place and time the answer is no, you are not qualified to optimize the design of your building. So is it your architect? They may be the most prestigious and award winning architect around but unless they have been selling or leasing hundreds of units to the exact demographic you are targeting in the precise place and time in the market cycle, they’re also not best qualified to understand what the market is demanding. It’s the sales and leasing team who have been selling or leasing hundreds of these units ongoing and who there- fore best to know what the market is demanding. One of the obvious aspects of the design to be considered is the façade and the external ap- pearance of the building in general. Should it to be edgy and avant-garde or does that extra investment yield little
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