What is a preferred developer?
Quite simply put, a preferred developer is a “go-to” commercial developer selected by a retailer or tenant to handle a set number of projects and help further a company's expansion plans. Tenants will make the decision to use one particular full service commercial real estate development company to either handle all of their new development projects, or manage projects in a particular geographic region.
A preferred developer is tasked with overseeing multiple projects for companies, either within a trade area, a region, or across the entire country. They manage a tenant’s projects from start to finish. These projects can include a new build to suit development, a new ground up development, or redevelopment project. This process provides companies the assurance, through a strong relationship, that the commercial developer fully understands their expectations.
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What are the benefits of a preferred developer?
Using a preferred developer can have a whole host of benefits to retailers. A tenant’s preferred developer can create a customized strategy to meet their needs on not just a single project but numerous developments within a brand’s expansion plans. This ensures consistency and reliability when rolling out projects. Forming a lasting relationship in the commercial real estate development industry can play a significant role in a tenant’s successful expansion.
Additionally, using a preferred developer allows tenants to know that they have the backing of an expert in the industry. Commercial developers take care of the entitlements, approvals, building permits, and all the other intricacies of the commercial development process. Meaning, you do what you do best while the developer does what it does best.
Using a preferred developer provides a streamlined process, giving you a cost-effective option while offering the expertise you’re looking for. It offers trusted resources and experience to reduce risk, ease expansion efforts, and ensure a brand’s success.
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How can a preferred developer streamline my process?
When partnering with a preferred developer, tenants get the luxury of a simplified, streamlined process by working with one partner. Instead of clogging up the real estate transaction and development process with multiple deals involving multiple parties, tenants can negotiate one lease, one time. There’s no need to spend $500,000 in legal expenses trying to get 30 deals done, when a preferred developer will allow you to complete deals quickly and efficiently.
A commercial real estate developer uses their expertise to ensure that the full development process is completed in a way that meets, or exceeds, a tenant’s expectations. From handling feasibility, underwriting, due diligence and the closing of the property during the acquisition phase, to working with architects, government officials, surveyors, and contractors during the construction phase, a preferred developer provides a streamlined approach to handling the entire process.
In commercial real estate, time is a precious commodity and using a preferred developer can help ensure that you have more time to do what you do best.
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How can a preferred developer save me money?
By providing you a one-stop shop for the entire development process, a preferred developer will save you money by keeping your overhead limited. In today’s real estate market, few tenants handle their own development in-house. That’s because managing your own development projects means adding costly back office teams and additional related overhead. With a preferred developer, those resources are already in place.
Additionally, you get a partner that’s willing to do a lot for you, including taking on the risks that come with the real estate development process and construction costs. At times, commercial real estate developments face the risk of unexpected costs in excess of the allotted budget. The commercial developer bears the burden of these cost overruns, leaving tenants with the peace of mind that the risk is on the developer.
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How can a preferred developer reduce construction risk?
In a preferred developer, you get a partner that’s willing to do a lot for you, including taking on the risks that come with the real estate development process. The developer provides a partner that’s willing to take on a lot of the financial, legal, and other risks involved in the construction process. Some of those risks include:
- Project Approvals and Permits
- Budget/Cost Overruns
- Safety
- Site Conditions
As a tenant, you spend less time worrying about the intricacies and risks of the development process, and more time worrying about running your business.
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How can a preferred developer help me grow my business?
When you partner with a preferred developer you get a trusted resource that understands your brand, your business, and your goals. They know your strategic plan, your site criteria, your requirements, your competitors, and much more about the way you do business. And they do so because from each project completed, they learn a little bit more about what makes their client happy. They learn a little bit more about how to make the next project better, and the next. It’s more than just a one-off, build to suit project, it’s about a relationship. And that relationship and consistency can help tenants be more comfortable and confident in their expansion plans.
You can easily look to one source to understand where Project A, Project B, or Project C are within the pipeline. The other option leaves you with a handful of different developers working on a handful of different projects at the same time. Undoubtedly, none of whom are likely communicating with each other, and all of whom are taking a different approach to completing your projects and meeting your goals.
When you partner with a preferred developer you get an all-in-one point of contact for the numerous projects that you have in your pipeline. So you’re assured that your company’s expansion goals are met, and your company can continue to profit.
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