The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
When coming up with new commercial property development projects, make sure you get to know your market and you get to know it really well. One of the most expensive mistakes commonly made in commercial property development is taking on projects that simply don’t fit particular markets or their market demands. Financing goes into architecture and design for a grand project, and the local market simply doesn’t respond as one may have expected it to.
Richard Wilson: What’s the most expensive mistake that you see commonly made in commercial property development?
Chad Moss: I think what I see happen is people often work in a vacuum. They don’t trust their consultants. They design something that is way out of line for the area and the demand, and they spend a bunch of money on architecture and planning, and they figure out their job is not financeable because the market demand is simply not there for that type of product. Whether you’re talking gross square foot numbers, sellable versus rentable, or even just something that’s, you know, just doesn’t work for that particular market.