Looking to the Future

The immediate future of development will be shaped largely by the impact of the financial market crash in late 2008. New developments will have strict lending terms and many projects will not able to find financing. As the economy slows, developments will require solid market analysis and conservative estimates on revenues, and many developers will be forced to hold and manage projects because there is no capital for buyers. Long term, infrastructure needs and sustainability will have a larger impact on the development field. As the costs of energy rise and tenants and users become more eco-conscious, organizations such as the US Green Building Council and their Leadership in Energy and Environmental Design (LEED) rating system will become more prevalent. Also, infrastructure, especially in the United States, will become a large area of opportunity as bridges, highways, and public utilities start to become functionally obsolete. State and local governments will look to privatize the development and operation of these projects due to the high costs and limited availability of public funding. The key to finding and capitalizing on opportunities in real estate development is to understand current economic and market conditions and the ability to adapt your product offering to meet the demands caused by these trends.