Leasehold Development Process

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Hands-on project management for leasehold projects

Leasehold development deals originate when a client approaches us with an asset, typically land, and a desire to obtain economic value from it in the near term. This can mean vending the land into a deal and seeing a cash return, either from the value of the equity contributed or by taking ownership of either a portion or all of the leasehold development. This serves the purposes of the organization and generates cashflow from the management and turnover of the units over time.

Our process starts with understanding your core objectives, investigating your assets, and analyzing your opportunities. We provide our guidance and expertise throughout the development process to ensure your goals are met and the final result meets the needs of your team, your community, your partners and your stakeholders.

Our leasehold development process

Create a project plan

Create a project plan

First, we listen to your goals, to help determine the ideal leasehold structure and model for the project. We then help assemble the development team, define the property to be developed, and create a cohesive project concept. At this stage, we also assess your financial and operational capacity to undertake development of the project.

Development management process - determine feasibility

Determine feasibility

We work with you to assess the project’s overall feasibility, with a goal of determining whether and how it should proceed. This stage involves gathering market intelligence and demand analysis, developing preliminary capital and operating budgets, preparing preliminary designs and investigating approvals.

Development management process - prepare for construction

Prepare for construction

Prepare leasehold legal documentation
We work with legal and other professional services to ensure the foundational leasehold document is sound, achieves the objectives of your organization, and is onside with any government regulation during presales. Proceeding with pre-construction is a significant step, as it typically involves major expenditures for architectural and engineering services. During this stage, we help determine an acceptable construction contract. The goal is to arrive at a firm capital cost budget, finalize agreements and achieve all necessary approvals in order to proceed with construction.

Secure appropriate financing
Leasehold models typically are closer to regular condo developments and are not financed entirely, if at all, by government lenders. Depending on your group’s objectives, we identify and secure the appropriate forms of capital, whether public or private, to ensure the project moves through acquisition or consolidation of any land, rezoning and entitlements, construction, and closeout.

Implement a marketing and sales plan
While they aren’t typical market condominiums, leasehold units still need to be sold to buyers. A concerted and effective marketing and sales strategy is required to educate buyers about the product type and ensure a smooth transition to occupancy. Furthermore, construction lenders require pre-sales of units before funding a construction mortgage. At Terra, we develop and implement a marketing and sales plan that effectively communicates the vision of the project and your group, and sells a sufficient number of presales to close on the financing. This requires careful consideration of the timing, to ensure compliance with consumer protection legislation.

Development management process - support construction

Support construction

We participate in construction meetings and help resolve any issues that arise during the construction process. This stage includes accounting for all project costs and facilitating advances from lenders or financing bodies.

Development management process - move-in and post-construction review

Move-in and post-construction review

Once construction is complete, we support you and your new residents through the move-in process, deal with construction deficiencies, and finalize the project’s capital cost. As a full-service organization, Terra can provide further services through the life of a project, including property management and asset management.