Commercial real estate development is rarely a smooth process. There are significant obstacles during the development process that can halt, delay, or increase the cost of a project.


Local Approval Process

Entitlements and approvals are legal rights conveyed by governmental agencies allowing for the development of a property for certain use, building type, or building placement.

The problem is, this process can be arduous and lengthy.

Depending on the jurisdiction, entitlements and approval can many times take anywhere from a few weeks to upwards of two years.

Another concern with the approval process is that not all reviewing agencies have the same view on approval criteria. Such a disconnected and conflicting process, through multiple agencies, typically results in a complicated and delayed approval process and thus a delayed development.

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Environmental/Community Concerns

Obtaining official reports denoting some of the environmental aspects and potential hazards associated with the site can be a key roadblock in the development process as well.

From testing for soil or groundwater contamination to monitoring the activity of surrounding wildlife, a great deal of analysis and times goes into ensuring the environment and community will not be harshly impacted.

Some environmental reports and studies may include:

  • Biological Reports – Determining if particular wildlife is present and if any mitigation measures are needed.
  • Air Pollution Report – Investigating whether new development will contaminate air quality beyond acceptable levels.
  • Acoustical Study – Looks at how the store operation and customer/truck delivery noise factors into the surrounding community and determines what mitigation is needed (i.e. walls around compactor and truck docks to shield sound)
  • Archeological and Tribal Monitoring – Can sometimes occur in areas previously occupied by Native Americans in order to ensure no historical artifacts or remnants are disturbed or destroyed.
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Local Community Opposition

For whatever reasons that may be applicable, some communities have a difficult time handling and accepting new development within their community. They may organize through grassroots movements to make their voices heard with municipality planners and government officials.

While opposition provides communities an opportunity to voice their opinions and potentially improve a development, it does cause delays in the project. It can even result in unnecessary site improvements in attempts to satisfy the local opposition requests.

In any case, it’s important to use appropriate steps and programs to enhance the acceptance of a project within the community. Some counties may even require economic reports showing how a national retailer will impact small local businesses.

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Off-site Improvements

When handling a new development, there are always a significant number off-site improvements that are required to supplement the new construction. You can’t merely develop a parcel of land without addressing work that needs to be done to accommodate the new development.

The most common required improvements are typically curb, gutter, and sidewalk. Other improvements that can cause delays and hiccups in new development projects are:

  • Off-site drainage and stormwater management
  • Traffic deceleration or acceleration lanes in and out of site
  • Medians and landscaping in medians
  • Future traffic signal proration cost
  • Obtaining full access driveways versus restricted
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Understanding the Commercial Real Estate Development Process

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