Diagnosing a real estate project development requires a thorough assessment of various factors to determine its viability and potential for success. Here is a checklist to help guide you through the diagnosis process:
1. Market studies
- Evaluate the results of comprehensive market studies to ensure alignment with project goals and market demand.
2. Market and marketing repositioning
- Assess if the project needs repositioning in response to changing market dynamics.
3. Missing the target market
- Determine if the project is not attracting the intended target market.
4. Inept marketing team
- Review the competence and effectiveness of the marketing team.
5. Wrong pricing schedule
- Analyze if the pricing structure aligns with market conditions and project costs.
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6. Unrealistic absorption period
- Check if the projected absorption period is realistic based on market demand.
7. Too small marketing budget
- Assess whether the marketing budget is sufficient for the project’s scope.
8. Paperwork trail
- Ensure all legal and administrative documentation is complete and up to date.
9. Excessive loss of tenants
- Investigate reasons for tenant turnover and assess strategies for tenant retention.
10. Controlling increases in operating expenses
Evaluate efforts to control and minimize operating expense increases.
11. Renegotiating current leases
Assess the feasibility and effectiveness of renegotiating existing leases.
12. Understand the market
Continuously monitor market trends and dynamics to stay competitive.
13. Lack of expansion possibilities
Determine if there are opportunities for project expansion or adaptation.
14. Dated appearance
Identify if the property’s appearance needs renovation or modernization.
15. Poorly functioning space
Evaluate if the existing space layout and functionality meet tenant and market needs.
16. Behind the competition
Analyze reasons for falling behind competitors in the market.
17. Failure of systems
Ensure that building systems (e.g., HVAC, security) are reliable and efficient.
18. Safety problems
Address any safety concerns or violations promptly.
19. High maintenance expenses
Review maintenance costs and identify areas for cost-saving measures.
20. Construction overruns
Assess if construction costs are exceeding the budget.
21. Construction scheduling
Evaluate the construction timeline to ensure it aligns with project goals.
22. Construction omissions and errors
Identify and rectify any omitted construction elements or errors.
23. Debt service restructuring
Explore options for restructuring debt to manage financial obligations effectively.
24. Exit strategy
Determine the exit strategy for the project, whether it’s selling the property, holding it for rental income, or another option.
25. Legal due diligence
Conduct a thorough legal due diligence process to identify any potential legal issues, including disputes, liens, or encumbrances.
26. Risk management plan
Develop a comprehensive risk management plan to address various project-related risks, including market volatility, regulatory changes, and unforeseen events.