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How to Handle Pesky Setbacks in Commercial Real Estate Development


There are countless setbacks, roadblocks, and obstacles between where your project is and where you want it to be. So, when a project takes an unexpected turn, will you be prepared to keep it on course?

As we illustrate here, the development process is...quite the process. It’s lengthy. It’s full of surprises. And there are definitely a lot of hurdles to overcome to get from conception to completion.

Common Setbacks in Commercial Real Estate DevelopmentTime, money, a complicated approval process, all of these can delay or even halt a new development.

You often have to do some slick maneuvering to make sure it doesn’t go too far off the rails.


Put Your Preparation to Work

They say to expect the unexpected. Or some might say, plan for the best but prepare for the worst.

In this past blog, we note that when you’re looking towards your next development project, make sure you’ve asked the right questions. Try to look two steps ahead. Specifically, know the regulatory requirements. Those can be some of the biggest hangups in development. Approval can take months to years to complete.

Factor for that. Calculate what you’re in for and at what point you think it’s time to cut your losses. Not every project that leaves the planning stage will see the light of day, but that’s ok.


Use the Time and Expense You Padded For

You did account for this, right?

Delays take a heavy toll on a project’s bottom line and adversely impact the tenant if a projected opening date isn’t met.

Take, for example, weather delays. There’s no automatic extension of time because of weather delays. Lots of legal fees get spent every year proving and disproving what “normal” weather is when it comes to those delays.

All of that can be avoided by doing the proper due diligence, research, math, and padding for unforeseen delays. Again, “planning for the best but preparing for the worst” can help you avoid, or at least limit that uneasy feeling.

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Learn to Pivot

Proposed projects don’t always pan out. And that’s ok; if you learn to pivot. If you discover that an environmental or traffic study is going to pinch your budget or shake up your timeline like an Etch-a-Sketch, your only option may be to go back to the drawing board.

Metaphors and analogies aside, setbacks in the commercial real estate development process are definitely not what you want to experience and difficult to manage. At the end of the day, partnering with the right people, preparing yourself, and taking the right approach will help keep you on track.

Commercial Real Estate Development Commercial Real Estate Development Process Tenant