The developmental process of the real estate or the property business shows the interrelation between seven sequential stages. This stage includes the land banking sites, the land packaging sites, land development stage, building development stage, operating stage, renovation stage and the ultimate stage or the redevelopment stage. There are few requirements that include the service of professionals in the developmental process of real estate. The major requirements are the feasibility, underwriting, contract, and the due diligence (Cha, Kim & Ko, 2012). Due to the presence of the seven stages, the developmental process, the financing and the market research becomes easier. The clear and rational discussion about the competencies in the development of the professionals can be enhanced by the application of their marketing thoughts and presence of requisitions, necessary for the development process of real estate and property.
The evaluation of the development process can be demonstrated in the marketing and the policy aspects. Marketing strategies and marketing knowledge are one of the significant skills which should be present within a professional. To determine the current and the future market condition of the property, the most appropriate marketing strategies and the proper marketing tasks are required. Majorly, three policies are involved in the development process of the property or housing (Chan, 2011). The engaging policies are the project selection criteria, the target level of development activity and the elimination of production activity.
Risk factors in development process
This assignment highlights the risks and the types of risks in the development process of “1075 bay street, Toronto, Ontario”. The potential negative impact on that particular property may arise because of the application of strategies unknowingly. Majorly, the systematic and the unsystematic risks are related to the developmental process. In the development process of “1075 bay street, Toronto, Ontario”, the developer had to face many risks such as the sponsor risks which include property management and the asset management. The debt risks including the over leverage, debt maturity and the reward risk are a challenging factor of this development process. On the other hand, the developmental process of “1075 bay street, Toronto, Ontario” are negatively affected by the hazards related to the cap rate risk, the tenant risk which involves the rent roll quality and the rollover risk (Hakami & Yousif, 2014). The physical asset risk, construction risk, the employees’ labour market-related risk and the financial risks are disturbing factors during the development. The risks of overbuilding and the interest rate risk can be a high-risk zone for the developer.
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