Great Opportunities Call for Careful Planning to Maximize Success
Land development in CRE has seen considerable growth over recent years, with organizations making significant investments in various states ahead of large infrastructure projects. For example, the State of Ohio has seen investments from Intel ($20 billion), Amazon ($7.8 billion), Invenergy ($600 million), and Microsoft ($57 million) for a variety of long-term construction projects that are expected to have a widespread economic impact.
As one of a few alternative asset classes that is seeing growing interest due to the struggles of other more traditional classes in the post-pandemic world, land development projects present a great opportunity to invest in a burgeoning space. Despite interest rates remaining high and other economic concerns, construction in the U.S. has remained strong — particularly with multi-family housing (another strong opportunity for investors).
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Whether it’s for multifamily developments, industrial assets such as warehouses or data centers, or retail-focused assets, land development must take place to make a space ready for these structures. GPs, syndicators, and other deal sponsors looking to take advantage of land development in CRE must ensure they’re properly prepared with the right technology to manage investment into these assets at all times. Here, we’ll explore how the right CRE asset management platform makes land development efforts successful.
5 Ways an Asset Management System Helps Land Development Deals Succeed
- Planning — Land development efforts can be complex because of varying local regulations and codes. Additionally, it’s important to understand the dynamics of the local market and the demand for the type of assets that will be built on it. The right platform will allow you to centralize information storage, provide the ability to share that information with investors, and track the progress of navigating these complexities.
- Forecasting — You, as a GP managing land development in CRE, need to be able to understand at a moment’s notice where a deal stands in terms of funding and, once the deal is closed, what its current financial outlook is. Utilize tools that provide the information in an easy to access way and that can be shared and reported on to investors and other partners.
- Fundraising — Just as with any other CRE deal, raising capital for land development is a critical early phase. You need to share information about the land and your vision for it with investors, track their interest, manage commitments, conduct capital calls, and manage a number of transactions. And most important, you need to understand the structure of the deal to ensure future distributions are set up and executed properly.
- Reporting — Whether monthly, quarterly, or annually, you’ll need to provide reporting to investors and other parties about the performance of your land development assets. Being able to automate this process — while providing recipients of that reporting with a self-service place to access it — will go a long way in streamlining workload and serving your investors.
- Distributions — It’s time to stop fearing “wire day.” Distributions to investors should be automated to reduce administrative workload, reduce risk due to human error in dealing with complex files and calculations, and ultimately deliver your investors’ due returns to them in the way they see fit. The right solution will allow you to set up this important financial function and automate it to maximize investor delight and minimize your headaches.
Capitalize on Land Development in CRE with Covercy
As the first real estate investment management platform that combines asset management with banking, Covercy provides everything GPs, syndicators, and deal sponsors — as well as investors — need to make the most out of each asset under management. Our platform enables firms and individuals to fundraise, conduct capital calls, automate distribution payments, customize and share reporting, centralize asset data, open and fund bank accounts, and much, much more — all from the convenience of a single platform.
Ready to make the most of land development in CRE? See how Covercy can help you get there in a private demo.