November 17, 2017  
 
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Parties Involved in a Development Project

Written by Brent Pace for Gaebler Ventures

In order to develop real estate you need a team of professionals who can handle all aspects of the job. This article discusses the various parties that are typically involved in a development project and discusses a few of their roles and responsibilities.

To develop commercial real estate successfully you need a team of experienced and educated professionals.
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There can be many parties involved in the process, especially for projects that are very unique and have narrow uses. For a typical office building or retail project, however, there are about 13 different parties involved in the transaction as it is being built. Here's a quick run-down of the parties and their respective roles.

1. Owner/Developer.

The owner and developer is in charge of the whole enchilada. They hire everyone, and are responsible for securing financing, leasing, and payment. In addition, the master developer will be in charge of running the weekly development meetings as construction commences.

2. General Contractor (GC).

The GC is in charge of building the project. A GC may have as many as 25 or 30 sub-contractors working for him on the project. The GC is to work with the developer and architects and engineers to build the project as designed, on time, and for the price promised in their contract.

3. Master Architect.

The architect can be the key to a successful development project. The architect designs the building and is in charge of looking over the contractor's shoulder to make sure that his design is built accurately. The architect will be involved on a daily basis to provide clarifications and answers to questions from the GC and sub-contractors.

4. Electrical Engineer.

The electrical engineer will design all electrical systems and components for the building and ensure that his design is implemented successfully and connected successfully to local utilities.

5. Civil Engineer.

The civil engineer deals with site issues and ensures that the building is situated on the site where it should be, and that the grading of the site is as drawn in his plans. The civil engineer also manages storm drainage from the property.

6. Structural Engineer.

The structural engineer's role is usually towards the beginning of the project. They ensure that the project designed by the architect is done so that it can support the load the building requires. For office towers this includes very specific design for the steel and/or concrete structure of the building.

7. Mechanical Engineer.

The mechanical engineer will design the HVAC and plumbing systems for the building and ensure that his designs are built as planned.

8. Special Engineering (if any).

A project may need special engineering help for specific concerns. For instance, many buildings in earthquake zones have special engineers who help ensure that the building is designed in a way that will allow it to hold up and bend and flex properly in the event of an earthquake.

9. Landscape Architect. Appearance is important, and the landscape architect ensures your property gets the right plants and has the curb appeal you are looking for.

10. Tenants.

Tenants, if involved up front, will often be available to provide input. This is especially important for build-to-suit projects.

11. Financiers.

Occasionally you will receive oversight from parties providing financial assistance to the project, namely banks providing construction loans and permanent financing.

12. Third Party Inspectors.

Often times a municipality or other entity will require inspections to be made of the project. Many financiers require a 3rd party inspector to be hired to ensure that the loan funds are being used appropriately.

13. Legal Counsel.

Legal counsel will often be present and/or available to ensure that the project deals with any problems appropriately.

Brent Pace is currently an MBA candidate at University of California at Berkeley. Originally from Salt Lake City, Brent's experience is in commercial real estate development and management. Brent will have tips for small business owners as they negotiate their real estate needs.

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