Strategies to Attract Investment A proactive approach to reducing risk is a necessity for projects of any size, but especially for large, complex projects. Some key considerations to risk reduction include developer vetting, land assemblage, due diligence, and zoning. Equally important is the vision for the future, which should be shared and agreed upon between the developer and the City. While due diligence entails a thorough investigation and evaluation of the project (think of this as the science part of the equation) to ensure that it meets investment objectives and potential pitfalls, having the right development partners onboard ensures that the shared and desired end-result is achieved (this can be thought of as the art portion of the equation). Together, the art and science must add up to make the project pencil. While the following list is not intended to be comprehensive, some key elements to be considered when conducting due diligence include:
Regulatory Compliance Ensures that applicable laws, regulations, and zoning requirements are met with regards to the property and its operations. Title and Survey review should also be completed to understand any encroachments, easements, or restrictions that may have implications on the project. Environmental Assessments An evaluation of current and previously remediated environmental risks like soil or groundwater contamination should be conducted to ensure there are no liabilities, or discovered so a path towards remediation can be implemented.
Financial Analysis To assess the property’s financial performance, including historical and current income, rent rolls, operating costs, and vacancies. Existing leases and tenant relationships should also be investigated to determine the status of current and future relationships. Site Specific Market Analysis Conducted to understand the properties competitive nature across multiple real estate sectors, these studies help owners and developers understand and position their projects for the greatest value capture possible.
170 | East Berry Corridor Study
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