3 Tips for Emerging Market Mixed-Use Developers
The development of mixed-use properties can be lucrative, especially in emerging markets where opportunities are ripe. However, it's not without its challenges. There are communities throughout Metro Atlanta and the Southeast that hold great potential, but they also come with unique risks and complexities.
In this blog post, we'll explore three tips that emerging market real estate developers should keep in mind to thrive in this competitive and evolving landscape.
1. Thorough Market Research
The foundation of any successful real estate project in an emerging market is comprehensive market research. Developers must understand the local economy, demographics, and infrastructure. By identifying growth trends, potential demand, and gaps in the market, developers can make informed decisions about the location and type of commercial real estate to pursue. Esri Location Data Reports offer both quantitative and qualitative insights into a prospective community including average household income, consumer behavior traits, and Tapestry Segmentation to better understand merchandising voids and needs.
Understanding the regulatory environment and legal framework is crucial. Navigating permits, land use regulations, and property rights can be quite different from developed markets. Engaging local experts, lawyers, and consultants can be invaluable in this regard.
2. Build Strong Local Relationships
In emerging markets, relationships are key to success. Cultivating strong relationships with local authorities, community leaders, and potential partners is essential. These connections can help you navigate the bureaucratic and regulatory hurdles that often come with developing in emerging markets. Ensure you’re making the time to cultivate these relationships, as you will often discover additional pieces of information that will guide your project.
Developers must also be mindful of the social and cultural dynamics of the community. Understanding and respecting local customs can make a significant difference in how your project is received and can impact its long-term success.
3. Risk Mitigation Strategies
Emerging markets can be volatile, and risks are often higher than in more mature markets. Create contingency plans for political instability, economic downturns, and currency fluctuations. It's imperative to seek guidance from commercial landlord/developer advisory firms who also understand retail tenant leasing, and consider various financing options, including local and international funding sources.
Developing mixed-use properties in emerging markets is an exciting opportunity. However, it comes with its own set of challenges and risks. By conducting thorough market research, building strong local relationships, and staying flexible in your approach, you can increase your chances of success in this transformative sector of commercial real estate.
Remember that each emerging market and community is unique, so it's essential to tailor your approach to the specific conditions and opportunities of the region you are building in. With the right strategies in place, developing a mixed-use property in an emerging market can be a rewarding and profitable venture!
