Jonathan Rooks is the owner of Parkland Properties, which he founded 34 years ago. Due to his real estate experience, he’s well aware of the challenges that commercial property developers face in today’s world.
You may be surprised to learn that real estate is a huge contributor to greenhouse gases. 27% of Co2 emissions come from building operations. Another 20% comes from construction, building materials, and related activities.
Focusing on sustainability can bring down emissions, and help developers meet their environmental goals. In addition, Jonathan Rooks states that redevelopment is important. This allows developers to make the best use of existing buildings, which reduces the construction materials needed.
Another challenge is choosing the right site. There are a lot of factors that go into choosing a site. You’ll want a site that makes sense based on your target demographic, and your goals.
Developers must consider competition, environmental risks, and planned improvement or expansion. A site may work for you now, but will it work years later, when demand or interest grows?
Developers often assume that everyone in the nearby area looks forward to their project. This isn’t always the case. Opposition from local residents can have an impact on a project, and even shut it down.
This can occur for a wide variety of reasons. These include concerns like traffic congestion and noise. Residents may also have different values than those represented by the development.
Building codes are updated every 3 years. This can have an impact on your project. If you plan your project to meet current codes, there’s a chance that the codes can change before the building is complete.
Permits are another concern. Permits are required for nearly every aspect of construction or remodeling. Developers hope that this process goes quickly and smoothly. However, this isn’t always the case.
Supply chain shortages have had a detrimental impact on real estate development in recent years. Jonathan Rooks explains that the supply chain crisis is multifaceted.
The pandemic certainly exasperated the issue, but there were supply chain concerns before the major shutdowns.
Labor and material shortages are concerns for real estate developers. It can be difficult to get the needed materials for renovations and new building projects.
Projects almost always cost more than you initially anticipate, according to Jonathan Rooks. Current conditions can cause costs to rise even more.
Inflation is a big concern for everyone in today’s world. The U.S. inflation rate is currently 8.2%. Energy costs are rising at a higher rate, with an inflation rate of 19.8%. This includes high gas prices, which ultimately affect material costs.
In addition to rising costs, material delays or shortages can affect project costs. When planning a project, it’s necessary to have the funding to cover unexpected costs.
Jonathan Rooks is a Michigan native. As the owner of Parkland Properties, he’s dedicated his career to development and redevelopment in Michigan. He’s won many awards throughout his career, including the Gerald R. Helmholdt Grand Award.