Chapter 12 Real estate development

Geographic information system (GIS)

An information system that enables users to work with data that are geographically referenced to the Earth, allowing them to add, store, edit, analyze, map, and present the data . is frequently used to assist decision making for planning and real estate development

Option agreement

The right given by the owner of property (the optionor) to another (the optionee) to purchase or lease the property at a specific price within a set time

Subordination clause

Clause in which one party agrees, under certain conditions, to yield its priority to another mortgagee

Venture capital

Funds available for early-stage, often high-risk investment in a profit-seeking enterprise

Letter of intent

outlines the terms under which the parties would be willing to enter into a contract, is converted into a formal purchase and sale agreement. includes the price to be paid at closing; Deposits paid to the seller as an inducement to take the property off the market; A determination of whether the deposits will be refundable or nonrefundable to the buyer etc

Release clause

enables a borrower or developer to obtain fee title on a portion of the land by paying a portion of the seller’s note. a contract provision allowing specific parcels of land under a blanket mortgage to be freed from a lien upon partial repayment, or enabling a party to exit a contract

site control

the legal right (ownership, lease, or option) a developer has to use a specific piece of land for a project, ensuring they can build, operate, and maintain it

due diligence

A forthright effort to investigate all reasonable considerations in a timely manner. analysis a party conducts before entering into a legal, financial, or business agreement to verify facts, assess risks, and prevent liability.

highest and best use

The property use that, at a given time, is deemed likely to produce the greatest net return in the foreseeable future, whether or not such use is the current use of the property

infrastructure

roads, water, sanitary sewer, and storm drainage.

end users

a range of possible tenants, final person or organization intended to use, consume, or benefit from a product or service