USP 151 FINAL FLASH

What are the 3 most important skills for a developer?

Knowing money, dealing with people, and managing risk.

Why do developers need to understand the market?

To know what people want and where to build it

What kind of person makes a good developer?

Someone who takes smart risks and solves problems.

What is an “entitlement”?

Legal permission to build on land.

What does a feasibility study do?

Checks if a project can work and make money.

What is a “spec project”?

A building with no tenants signed yet

What’s the difference between creating value and speculating?

Creating value means improving land; speculating means gambling on price

What is land banking?

Buying land and holding it for future use

Why are developers like orchestra conductors?

They lead many people working on one project.

What is project risk?

Things that can go wrong with cost, time, or approval.

What is a merchant builder?

Someone who builds and sells buildings for profit.

What is a fee developer?

Someone hired to manage a project for someone else.

What is a joint venture (JV)?

A partnership where two or more groups share a project

Who can be a partner in a JV?

Investors, landowners, or big money companies.

What is a waterfall?

A way to split profits based on performance.

What does an architect do?

Designs the look and layout of the building.

Why hire a public relations (PR) expert?

To talk to the public and win support.

What is a predevelopment agreement?

A deal that outlines who does what in early planning.

What is mezzanine debt?

A loan that’s riskier and comes after the main loan.

What does a construction manager do?

Makes sure building stays on time and on budget.

What are soft costs?

Expenses like lawyers, architects, and advertising

What is a mission-driven developer?

One who builds to help people, not just make money.

What is a preferred return?

Investors get their money back first before profits are split.

What is a takeout loan?

A long-term loan that replaces a short-term one.

What’s the difference between land developers and builders?

Developers prepare the land; builders build the homes.

What’s a plat?

A map showing how land will be divided.

What does “zoning” mean?

Local rules for what can be built where.

What is phasing?

Developing the land in smaller parts over time.

What is a takedown schedule?

A plan for when and how land is sold in parts.

What’s a common risk in land development?

Not getting approvals or running out of money.

Why do developers use joint ventures?

To share money, work, and risk.

What’s a covenant?

A rule in a land deed to control future use

What is infrastructure?

Roads, sewers, water pipes, and power lines.

What is a marketing strategy?

A plan to sell lots to builders or homebuyers.

What’s one way to reduce risk?

Don’t buy land until you have approvals.

What is a land option?

A contract to buy land later without owning it now.

Why is grading important?

It makes land flat and ready to build.

What’s the main goal of land development?

Add value to land and sell it for a profit.

What makes apartments different from houses?

They are rented, not sold, and managed as one property

What is the first financial step in a project?

Estimate how much it might cost and earn.

What is a DCF analysis?

A tool to see future cash flows and project value.

What is loan-to-value (LTV)?

A bank’s loan amount compared to the property’s value.

What is a draw schedule?

A plan for when loan money is used during construction.

What is a subsidy?

Extra funding (often from government) to make housing affordable

What is a market study?

A report to understand what renters want and can afford.

What is preleasing?

Getting tenants to sign leases before the building is done.

What’s a floorplate?

The shape and size of a building’s floors.

What is tenant improvement (TI)?

Custom changes to office space for each business.

What is ESG in office development?

Environmental, social, and governance goals.

What is a leasing broker?

Someone who helps find and sign office tenants.

What is a standby loan?

A backup loan if the first one falls through.

What is an occupancy rate?

The percentage of space that is rented.

What’s a lease term?

How long a tenant agrees to stay.

What is an office condo?

Office space that’s owned instead of rented.

What is a core and shell building?

The basic structure, not yet finished inside.

What is a flex space?

A mix of office and light industrial space.

What makes a good industrial site?

Close to highways, ports, and flat land.

What is a speculative (spec) building?

Built without a tenant yet.

What is the lease-up phase?

Filling the building with tenants.

What is a tilt-up building?

Walls are built flat and lifted into place

What does ESG mean in industrial?

Making buildings greener and more community-friendly.

What is a trucking apron?

The space where trucks load and unload.

What is a right-in, right-out access?

A driveway where vehicles can only turn right.

What is soil cement?

A base material to support pavement.

Why are joint ventures used?

To share cost and risk between partners.

What’s a cold storage building?

A warehouse that keeps goods cold or frozen.

What is a truck court?

The area behind the building for truck loading.

What is absorption in industrial?

How quickly space gets leased after it's built.

What are incentives?

Tax breaks or benefits to attract developers.

What are site constraints?

Physical or legal limits on what you can build.

What is a build-to-suit?

A custom building made for one tenant

What’s a key risk in industrial?

Building for the wrong market or not leasing fast enough.

What’s the goal of industrial development?

Deliver a low-cost, efficient building for storage or production

• What is shadow space?

Leased but unoccupied space (not yet subleased)

1. What does high churn in office leasing indicate?

A: Tenants are moving between buildings; not net new demand

What is GLA in retail?

: Gross Leasable Area (area rented to tenants)

What type of retail center is anchored by grocery or drugstores and serves 2–3 miles?

A: Neighborhood Center

Which center type provides convenience goods and services like dry cleaning and shoe repair?

A: Neighborhood Center

• What type of retail center is anchored by a department store and provides general merchandise and entertainment?

• A: Regional Center

• Which retail center has 500,000+ sq. ft. and serves a 7–10 mile radius?

• A: Regional Center

What does BOMA stand for?

A: Building Owners and Managers Association

• What does “Effective Rent” measure?

A: True lease cost accounting for concessions like free rent and TI

• What period marked a shift to suburban office parks?

• A: 1960s–1980s (freeway era)