Post date: Jan 26, 2016 6:45:35 PM
On Wednesday 27 January 2016, Professor Geoffrey Booth will conduct a workshop with us on land and property development. As an architect, your clients are largely developers. Knowing the language of development is an absolute key to success as an architect. Developers are largely investors; they are focused on how to make money from transforming real estate assets from one use to another use. They can make their money by basically one of two ways. They can sell it (flip it), or they can lease it. In the final sense, the ability to lease the property to a business or a resident is the measure of the value of the property.
Professor Booth is a pioneer in the kind of development conducted by Midway. It is based on a people-centric philosophy that investors should pursue enduring value that enriches people's lives. This is achieved through creating pedestrian friendly, family friendly, entertainment oriented, beautiful, amenity-rich total environments, and then managing them over a long time to reap initial profits and continuing profits.
Land development has five stages that should seem fairly familiar to us as architects:
Professor Booth will show you the basic financial instrument, the "pro forma", that a developer uses to conceptualize and craft a project so that it is profitable. As an architect, if you can understand and discuss the pro forma with your client, you will win enormous respect and differentiate yourself from the vast majority of young architects who know nothing about the client's perspective.
To prepare for tomorrow, here are some readings:
City Centre 2 investment package. This is an example of the profitability argument that the developer makes. In this case, the argument is made to potential investors in the venture. (The developer must raise money to pay for the design and construction. Investors and lenders provide the money.)
City Centre 3 investment package.
City Centre 2 leasing package. This is an example of how a developer pitches the property to potential leasors.
City Centre 3 leasing package.
The following documents present some of the philosophy and strategies of mixed use, moderate and high density, livable suburban and urban centers.
ULI Ten Principles for Reinventing America's Suburban Business Districts
I suggest that you look over these documents. You don't have to read them cover to cover, but if you have skimmed through some of them you will begin to speak the language that Professor Booth and other developers use.