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Ensuring timely project delivery in commercial real estate is crucial to maximizing your investment returns. Delays can lead to increased costs, missed opportunities, and diminished ROI. As an investor, even though you’re not involved in day-to-day operations, safeguarding timelines and ensuring strategic execution are key to success. Here’s how to use proactive strategies and collaborate with your development partners to stay on schedule and protect your investment.
One of the most crucial decisions an investor can make is selecting the right development partner. Whether working with a general contractor, developer, or sponsor, ensuring they have a proven track record in commercial real estate is key. At CRE Construction Partners, we perform comprehensive due diligence on your development partners to minimize risks.
Recently, we helped a family office client vet local development teams for a multi-family project in a rapidly growing urban area. By ensuring that the chosen partner had experience in similar projects, we mitigated the risks of delays and budget overruns, securing a successful outcome for our client.
Well-defined project milestones help keep your project on track. It’s essential to lay out a detailed schedule with specific deliverables tied to each milestone. At CRE, we help structure these milestones, ensuring that your investment is protected by tying funding to the completion of critical objectives.
When developing a project schedule, prioritize major phases such as permitting, site preparation, construction, and inspections. Ensure that payments are only released after key milestones are achieved, mitigating risks related to timeline mismanagement.
For a ground-up multi-family development project, we established a clear milestone structure that included the completion of site preparation, foundation work, and framing. This process allowed the project to proceed smoothly, with accountability built into each phase.
Although you’re not directly managing the project, having access to regular updates is critical. Insist on detailed progress reports from your development partner that cover everything from construction progress to financial standing. At CRE, we help set up precise reporting mechanisms that ensure you are informed at every step of the process.
Set clear expectations with your development partner about the frequency and content of reports. This should include updates on timelines, financials, and any potential issues on the horizon.
Unexpected issues can arise during construction—whether it’s weather, labor shortages, or material delays. At CRE, we ensure proactive risk management strategies are in place from the outset. This means identifying potential risks early and creating contingency plans to keep your project on track.
Build contingency plans into the project schedule and budget. For example, allocate extra time for procurement if there’s a known issue with material availability. This will help prevent delays from spiraling out of control.
In a recent hotel renovation project, our team identified potential risks related to material shortages early on. By adjusting procurement timelines and securing alternative suppliers, we were able to keep the project moving forward without significant delays.
Contracts with developers and contractors must contain clauses ensuring timely delivery accountability. Penalties for delays and incentives for early completion can be practical tools. At CRE, we help structure contracts that protect your interests while motivating your development partners to deliver on time.
When negotiating contracts, include clear language about delay penalties and incentive bonuses. This ensures that all parties are vested in completing the project on schedule.
Technology has revolutionized how real estate projects are tracked and managed. You can keep an eye on progress—even from a distance through cloud-based tools and real-time monitoring. At CRE, we utilize advanced project management software that allows you to access real-time data, ensuring transparency and accountability throughout the project.
For a recent office-to-residential conversion, we implemented cloud-based project management tools that allowed our investor clients to track real-time progress. This level of transparency helped avoid miscommunications and ensured timely decisions at critical points in the project.
“By wisdom, a house is built, and by understanding, it is established; through knowledge, its rooms are filled with rare and beautiful treasures.” – Proverbs 24:3-4
At CRE Construction Partners, we believe that a solid foundation—both in faith and planning—is essential to the success of every project. With our expert team, we ensure that your investments are guided by wisdom, understanding, and strategic execution.
Recently, we helped a family office client navigate a multi-family development where they partnered with a local development sponsor. By implementing milestone-based payments, detailed reporting systems, and contingency planning, we were able to keep the project on schedule despite several unforeseen challenges, including material shortages. The project was completed within the planned timeline, delivering the expected return for our client.
Ensuring timely project delivery requires proactive management, clear contracts, and a trustworthy development partner. At CRE Construction Partners, we work with investors like you to manage these elements effectively, giving you peace of mind and maximizing your return on investment. Ready to ensure your next project stays on schedule? Contact us today.
