Developers are in high demand!

real estate development
Visionary developers are being courted aggressively by city leaders throughout the country. They are also in high demand by other public officials, including university planners, transit authorities, county officials, school administrators and public hospital leaders. There’s a reason for this new popularity – mixed-use development has become one of the hottest new tools for generating revenue that public officials badly need.

Urban developments are the perfect vehicle for blending together retail, housing, entertainment, parks, health care and cultural facilities to create “communities” that attract people and businesses. This type of project is every municipal leader’s dream because of the benefits that are possible.

New development projects increase property tax and sales tax revenues. They result in economic stimulus that lasts for decades. And, if these projects are collaborative in nature, they also produce new revenue streams for cities. Falls Church, Virginia, analyzed eight mixed-use developments recently and reported that the projects generated $3.8 million in net revenue annually. Gross revenue of $10.6 million per year was generated by the projects when all city tax sources were included.

Benefits that result from mixed-use developments include alternative funding, new jobs, an economic stimulus for the entire area, an enhanced citizen environment and often an expansion of public transit. That’s hard to replicate with other projects.

Government leaders are aggressively pursuing all types of alternative funding and development projects are one of the most attractive options. The many incentives for private-sector investors to provide capital for collaborative joint ventures enhance interest from both public- and private-sector potential partners.

A $20 million mixed-use development in Flint, Michigan, benefited from a $7 million performance-based loan from the Michigan Economic Development Fund. The housing and retail development project includes a four-story building with both retail establishments and townhomes. More than 90 housing units, half of which are designated as affordable housing, are part of the project as well as parking for 100 vehicles. The city will benefit from property tax payments each year and sales tax receipts from the retail establishments. Additionally, developers expect 20 full-time jobs to be created with a large portion of worker wages circulating back into the local economy.

In Fort Worth, the TEXRail commuter rail line slated to open next year is already opening up a myriad of development opportunities along the route. Plans for a $94.2 million mixed-use, multi-family development near the city’s current Texas and Pacific Station have been announced. The development will feature housing, street-level retail and a child care center. A parking garage and hotel are both proposed. The development resulted from a partnership that includes the city, the housing agency and Trinity Metro.

With financial support from the Redevelopment Grant Program of the Minnesota Department of Employment and Economic Development (DEED), a $25 million- $35 million mixed-use redevelopment project in Edina will result in 46 mixed-income apartments with adjoining retail space. The city will match the grant funding through tax increment financing. Redevelopment program leaders describe these grants as a good use of taxpayer funds, noting that the latest $2.16 million in grants attracted $151.8 million in private investment.

City officials in Ann Arbor are evaluating options related to a proposed mixed-use development that would create 100-200 affordable housing units and space for community events and meetings. One option under consideration is a public-private partnership that would include the city, the transportation authority, the district library and the Downtown Development Authority. This proposal would allow the city to retain ownership of part of the property and generate revenue through an annual lease agreement for buildings on the property. Another option would be to allow a private-sector partner to fund the entire project, assume all the risk and make it possible for the city to generate additional tax revenues in the future.

The city of Augusta, Georgia, is investing $14 million in a $94 million residential, office and retail project planned on the city’s riverfront. In Harper Woods, Michigan, city officials are discussing a public-private partnership for a mixed-use development that includes a new city hall and 700 apartments and row houses. A hotel and restaurant may also be included.

Interest in mixed-use development continues to grow. Visionary developers will continue to be in high demand for many years… and not just with cities. The benefits that mixed development projects deliver are attractive to universities, public hospitals, counties, transit authorities and community colleges.

Mary Scott Nabers is president and CEO of Strategic Partnerships Inc., a business development company specializing in government contracting and procurement consulting throughout the U.S. Her recently released book, Inside the Infrastructure Revolution: A Roadmap for Building America, is a handbook for contractors, investors and the public at large seeking to explore how public-private partnerships or joint ventures can help finance their infrastructure projects.

How to Become a Real Estate Developer

Becoming a real estate developer is possible for anyone that’s serious about pursuing or already possesses the necessary education, work experience, drive, and commitment to become qualified.

Here are five key-steps to keep in mind if you’re seriously considering a profession as a real estate developer:

1. Education – While it is true some successful real estate agents without a college degree have gone on to make millions of dollars as an agent; most real estate developers have a college degree in a relevant field at minimum. This is not just to meet the guidelines of prospective employers, but also a requirement by most insurance agencies to get the necessary liability protection you will need in the future.

2. Experience – Even if you don’t have any experience today, it’s never too late to attend local real estate developer events, network, and even apply for individual certification courses either online or in person. Many, are in fact available for FREE, so there’s no excuse not to get started today!

3. Legal identity – As mentioned above, once you’ve received a (ideally bachelor’s level) degree in Civil Engineering, Business, or Management ,next you’ll need to form a legal business identity or entity to obtain the necessary corporation or limited liability company to ensure you’re properly licensed to conduct business.

4. Power in Connection – Outside of trying to do everything as outlined above, consider the benefits of interning or seeking employment with an already established real estate developer.

Understand, that typically real estate developers cannot successfully make it on their own in the industry until they have already obtained AT LEAST 5 years of experience in the field. And even then, this is by no means a guarantee for success or landing a career and successfully opening up your own real estate development business.

5. Start Small – In the beginning, try to research market trends and changes, as well interact with only the most well reputed professional construction firms or contractors. Also, for a fraction of your ‘total costs’ consider the benefits of focusing on “property improvement,” remodeling, and reselling as opposed to land acquisition, demolition, and building from the ground up. Doing so is the best way to ensure maximizing profits, and minimizing costs – unless money is no object!

Finally, take up a sincere interest in not only extra certifications and courses, but also extensive (5-10 years) worth of research to identify the risks, trends, and work toward understanding why and how those that have become the most successful real estate developers made it to the top.