Concept of Real Estate
Name
Institution
Date
Chapter 12: stage two-idea refinement
Definition of terms
Axial theory: accounts for intensive land use patterns along the transportation corridors, which outwardly radiate from the city center where there is higher concentrated land use.
Concentric zone theory: the center of the city determines its growth and land use when it is assumed that topography, transport corridors, and land use limits are not varying. Therefore the value of land depreciates from the center of the city, which shows intensive land use.
Sector theory: asserts that development moves outward from the center of a city due to geographical features and differences in access by following less resistance to natural and built elements that lead to lesser transportation costs. This leads to a wedge-shaped pattern of development.
Review questions
What issues do developers face when they find a site that meets their initial criteria but that has not yet been subjected to a thorough feasibility analysis?
Developers analyze areas in the market that may provide a better site than the one they already identified. An analysis of competition of developing companies and projects so that they can be able to create a more competitive project. Again, they discuss project objectives with both elected and appointed officials of the project to clearly define constraints to the project.
How can developers control risk during stage two?
Developers will limit risks during stage two by deciding on the best land acquisition method, which will enable them to limit exposure to their financial plan before fully committing to the project. For example, they will utilize lower down payments, etc.
Main issue(s) raised by the author
The author’s main issue is how vital stage two of the development process is for developers of a given project. This stage involves refining the ideas gathered in stage two of project development.
Pertinent Discussion Questions
The pertinent questions are questions that begin with “why…”, “how…”, “what is the meaning of…”the big problem in this chapter is:
Why is stage two crucial to a developer of a given project?
Stage two is essential to a developer since it links the written idea on paper to a specified site that will legally, politically, and physically support the project.
How does a developer convince other stakeholders to continue with the project?
Developers, when they successfully carry out stage two of a development project, they easily convince investors, lenders, and the public to keep the project going forward.
Chapter Summary/Opening Statement
Stage two is the ultimate heart of a given project when it comes to real estate projects. It refines the big picture stated in the first stages of a project. If the idea generated is still worth pursuing, the developer moves the project to the next step, which increases financial and emotional commitments to the project.
RPI Supplement
ULI Code of Ethics outlines regulations that will guide a developer to deal with a situation in stage two of project development becoming complex.
Chapter 13: stage three-the feasibility study
Definition of terms
Legal feasibility: it is the demonstration of how a given project is viable by providing facts on the progress of the project through stages one and two to other individuals such as investors, lenders, and elected or appointed supervisors.
Market study: it’s the analysis of trends identified in stage two relevant to the project at global, national, regional, and local levels. The tendencies to consider are long-term, and they help in developing the schedule the project will take.
Review questions
What is a feasibility study, and why is it necessary for development?
This is the application of updated and properly analyzed market information to a fully stated project in terms of facts and trends of the new market at the local, national, regional, or global levels. The feasibility study is necessary for development since it outlines the facts that will guide a developer to create a competitive project that will withstand competition, both internal and external.
What is a feasibility study?
This is the project developer’s outline that the project being undertaken is likely to satisfy the goals and objectives when it undergoes testing under specified constraints and limited resources.
What are the essential elements of a feasibility study?
Executive summary, maps of the site and the surrounding areas, photos of the site, the proposed project, full analysis and study of the market, projections of revenue and operating costs, the value of electricity consumption from appropriate market study, documented cost projection, schedule, and background information on key players.
Main issue(s) raised by the author
The main issues discussed in this chapter are;
Issue 1: a broad definition of feasibility, feasibility study, and formal and informal feasibility
Issue 2: testing the project viability
Issue 3: importance of project feasibility to investors, lenders, and supervisors
Pertinent Discussion Questions
These are the questions that analyze the level of the project at stage three and how important feasibility issue is to a project developer;
Why is feasibility important to an architect of a given project?
The architect can utilize the materials available to fully conceptualize the idea in the project outline and ensure that it meets the objectives and goals as intended by the developer.
Chapter Summary/Opening Statement
When properly defined, project objectives will formalize the broad project goals into definable and achievable objectives within a given timeline. This is what project feasibility is all about in general and simple terms.
RPI Supplement
Feasibility analysis should be more than just a way of taking care of risks that may evolve when a project is put in motion but it should be ingrained from the beginning of stage one to the last step.