The Land Development Play

    Here at Maple, we love all types of multifamily housing, not just Class B and C assets in great locations. In this country, new apartment development has been pivotal in helping to reduce our housing shortage. It’s true that some markets are showing signs of oversupply of these newly built, Class A, garden style apartments, but other, smaller tertiary markets outside big metros are still in need of thousands of units in the coming decade. We have been working on a project just outside Charlotte, North Carolina which involves what is called the Land Development Entitlement Process. The concept it simple to grasp, but requires skill, market knowledge, and relationships–many of the same attributes we utilize daily when searching for value add multifamily assets in our target markets. Below, are some high-level milestones for you to better understand the process:

• • Identify a market outside a large metro that has a housing need.
  • Find a raw piece of land large enough to build garden-style apartments. Before getting it under contract, do your due-diligence and visit City Hall, talk to city planners, board members, and business owners, and make sure the property is well-suited for redevelopment.
  • Put the property under contract. Closing to be contingent on obtaining all
    permits for construction. This is key and missed by many newbie developers.
    This provides a way to terminate your contract and walk away if large
    barriers to redevelopment are exposed during the entitlement process.
  • Hire your engineers, architects and other professionals to pursue annexation,
    re-zoning, and finally, planning board approval for the construction of your
    project.
  • Once you obtain all of your required approvals for construction, there are many viable exit strategies. Capital will be required if you decide to pursue construction on your own, and during the entitlement process those
    conversations with lenders and private entities should be happening in tandem to your approval process.

We hope this has provided you a high-level understanding of this process, and in the video above, Gonzalo Trenosky, with many years of land development experience under his belt, provides an in-depth deep dive into the process. Enjoy!