Risk management planning is key to successful real estate development. Risk Management, the science of analyzing risk areas as they have the greatest impact, allows real estate investors to appropriately allocate resources and / or assess the viability of real estate development projects.
A clear understanding of the development process and the ability to quantify risk areas will provide investors with the competitive advantage they need to emerge from the pack in the new economy.
Listed below is a summary of key risk management due diligence levels for real estate development and planning.
Level 1: Impact assessment
1.1 Assessment of industry standards
Analytical evaluation allows owners to compare existing facilities with commercial and industrial standards. The assessment of industry standards can be used as the basis for planning physical construction projects.
1.2 Evaluation of socioeconomic impacts
Analytical assessment enables owners to determine the status of socio-economic impacts on existing and planned future facilities with respect to changes in the business environment. The assessment can be used to help identify social, cultural and economic impacts to plan physical construction projects.
1.3 Assessment of operational needs
The inclusive process allows homeowners to identify general business and operational needs that will be used as the basis for planning physical construction projects.
1.4 Condition assessment (existing properties)
It enables existing owners to better manage their facilities and to set budgets for maintenance and repair.
1.5 Identification of strategic planning objectives
It enables homeowners to identify key scheduling needs when it comes to planning future construction and construction projects.
Level 2: Concept development
2.1 Conceptual site / campus planning
It enables owners to assess investment risk based on how well scheduled site elements fit and function on the available site.
2.2 Conceptual planning of the building
It enables homeowners to assess investment risk based on how well scheduled building elements perform in a basic building configuration as it is on the proposed site.
2.3 Conceptual phase plan
Allows owners to review long and short term project phases and impacts on facility criteria such as operations, capital expenditures, projected business growth, etc.
Level 3: Environmental plan
3.1 Introduction to sustainable construction strategies
It allows homeowners to consider different environmentally conscious planning strategies and assess the impact on long-term construction costs.
3.2 Environmental assessment
It allows owners to have a conceptual environmental study of existing facilities to be used as a benchmark in future planning projects.
3.3 Sustainable construction recommendations
Proposes appropriate conceptual environmental construction strategies as upgrades to existing facilities.
Level 4: Risk management plan
4.1 Review of surveys and reports
It allows owners to have a quick technical verification evaluation of a site before investing a lot of time or resources.
4.2 Zoning analysis
It allows homeowners to assess investment risk based on how well the proposed site plan and building meet local planning and zoning requirements.
4.3 Building code analysis
It allows homeowners to assess investment risk based on the impacts of current building codes and local amendments.
4.4 Risk management programming
Allows owners to assess overall investment risk in regards to project scheduling and project financing requirement.
4.5 Cost estimation
It allows owners to assess investment risk as it is affected by the total cost of the project and provides a comprehensive figure of construction-related costs that will be incorporated into the financial analysis of the project.
Level 5: Implementation plan
5.1 Long-term physical planning strategy
The executive summary format allows owners to have a concise integrated guide for long-term planning of physical facilities.
5.2 Short-term physical planning strategy
The executive summary format allows owners to have a concise integrated guide for short-term planning of physical facilities.
Make a plan. Have a plan. You will be glad you did!
