Design Development
Congratulations :-)
Because if you made it this far, we’ve accomplished so much.
We found a property, figured out if the math worked on a theoretical building, navigated the tricky conversations around acquiring the land, found an architect, met with a bunch of stakeholders on our project, and finally shepherded it through city approval.
Okay. I know I just skipped over a bunch of steps in this summary, but I’m not Ken Burns, and this isn’t a documentary.
You were there.
You know what we did ;-)
At this point in our project, we’re about to get back to some of the sexy stuff, namely the Design Development (DD) stage.
More about that in a moment because before we move ahead, I want to circle back to our pro forma.
Remember, the pro forma is a dynamic document, meaning that we’re going to return to it over and over again and test our goals against the hard reality of math. When we went before the city council, we had a specific number of units planned for our building, but now we need to make sure our deal still works. Most times, the number of units that you proposed is what gets approved, but there are definitely cases where you have to make compromises. Maybe you were hoping to build 100 units, but you ended up only getting 72 approved after you made a bunch of concessions to the city or the neighborhood.
If your numbers still work, then it’s time to move forward. If they do not, then you need to sit down and figure out what your options are.
We’re also going to go back and revisit a question we posed earlier:
Are we building to hold or sell?
Sometimes, this changes as we’ve gone through the process thus far. Perhaps real estate prices shoot up, and an outside investor makes an offer you can’t refuse (in which case, we’re not building, we’re going to sell it to her, and SHE’S going to build). Sometimes, we make concessions to the city council, and they’ve limited the number of units we can build, and while the project is still feasible, we’re going to build condos, not apartments (we’re selling). And sometimes, things work out as planned (we’re building and holding!).
In our theoretical build, although we had some resistance from the the neighborhood regarding increased traffic, we assured the neighbors that by adding underground parking we could accommodate new traffic to the neighborhood and, more importantly, we were adding a valuable amenity to the neighborhood by allowing space on the ground floor for a neighborhood cafe (that elusive “third space” ) and grocery store. We reviewed the concerns of the neighborhood WITH our city council person just in case someone objected to our project, but ultimately, there were no formal appeals, and our application was approved by the planning commission.
In Design Development, we’re going to flesh out our schematic plan and initial elevations. While we started this project with specific dreams about what we wanted to build, this is the part of the project where we get very, very specific.
If this were a date, this is the part where we find out if he or she wants to have kids. How many? Shared checking account or separate finances? Cats or dogs? Fox or NBC?
You get the idea.
There are a whole bunch of considerations related to the Design Development stage that we’re going to cover in the next four newsletters, but here they are in a nutshell.
We’re going to design the systems of the building: the mechanical, electrical, and plumbing. Remember, our architect drew up plans specific enough for us to work with the city and facilitate neighborhood meetings BUT we didn’t get so granular that we were spending money on plans that may shift as a result of planning commission approval (or concessions to that commission).
We’re going to finalize the floor plans. Some people simply proceed with what the architect gives them but this is a mistake. I usually spend months on the floor plans because I go through a lot of iterations to make sure they're perfect. I’ll share some very specific strategies in an upcoming newsletter.
We’re going to finalize the exterior material choices.
We’re going to finalize our interiors. We’ll select our windows, cabinets, flooring, plumbing fixtures, etc. We’ll also take a look at our Furniture, Fixtures and Equipment (FF&E) for the common spaces. Think fitness equipment, outdoor furniture, amenity space stuff, etc.
Some of the above can be done post-closing. You don't have to finalize exactly where your art is going or the exact furniture you'll have on your rooftop. But the more you finalize now, the more accurate the construction number you'll eventually get when you start building the project. If your plans are 98% finalized and you know everything except that last 2%, you’re far less likely to find yourself dealing with unanticipated expenses!
We’re going to dive deep into all of the above next week so stay tuned.
Peace,
