Land entitlement requirements (rezoning fees, subdivision fees, etc.).
Site evaluation & due diligence costs (i.e., boundary/topo surveys, geotechnical survey/soil study, traffic impact studies, environmental assessments, etc.).Examples of costs by stage can consist of: For example, medical office and retail products may call for more expensive finishes and buildout, while industrial or multi-family may benefit from fewer amenities or economies of scale.Įach of these phases of development includes major activities that incur expenses. Post-construction/closeout or operation & managementĬost breakdowns will fluctuate contingent on the type of real estate being developed.Generally, the real estate development process follows 4 key phases: The first step in building a development budget is to understand the inputs and construction costs by each project phase. In this article, we’ll offer a high-level overview of the significant cost categories by phase of development, discuss the importance of a well-defined scope to the budget creation process, and wrap up with a discussion of common mistakes creating a construction budget.Ī breakdown of real estate development costs by phase Therefore, preliminary budgets should be built early, refined as a project progresses, and constantly reviewed against actual costs as an accountability benchmark.īut the process for building a real estate development budget is not always intuitive, and if you’re unfamiliar with the development and construction processes, it can be impossible. Real estate development budgets often end up as living, breathing documents.
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