Initially the woman
considered selling her property outright, though the final agreement she
negotiated gave her an option for an equity position in the project equivalent
to one-third of the purchase price. She also took an option to acquire one of
the condominiums being built. “She realized the entire character of downtown
would improve, and she wanted to be a part of that. She wanted to participate in
the project,” explains Hidalgo, whose development team spearheaded the
development.
TOP VIEW
Properly developed real estate holdings can become powerful legacies
for our families and communities. The actual development process, though, is
often an ulcer-inducing obstacle course of cutthroat politics, stifling
environmental regulations and sour business relationships. To avoid such
pitfalls, we should carefully design our projects and, more importantly, partner
with an experienced, trustworthy developer who can bring those projects to
fruition. |
Divest or Develop?
Such salubrious outcomes are not the result of mere
chance. Rather, they are the rewards of a sometimes lengthy process, one that
begins with us asking the two important questions: What can I do to make the
most of my property? How involved do I want to be in its development? The first
question goes to the heart of vision and intent, the second to execution. The
answers (and ensuing further questions) tend to intertwine.
The simplest
solution for a landowner is to sell the property outright to a developer without
contingencies and be done with it. This is a clean, quick and relatively
risk-free option and may well be the best one for those not interested in taking
on a potentially long, expensive project, or entangling themselves with business
partners. “There are time and patience and aggravation issues,” warns Steve
DiFrancesco, of the Philadelphia real estate firm Hunter, Reed & Co. “The
average time [a development project] takes is 12 to 36 months. It is not
something that happens quickly. You need emotional and financial staying power,
since there is an opportunity cost associated with having capital tied
up.”
|
