By Burt Derr, First Vice President, Development Services
As the old adage goes “Real Estate is a great investment, because they’re not making any more of it.” Truer words have never been spoken.
In these days of extreme activity in construction and development, it can be easy to lose sight of a few of the core principles of sound development. A lot of today’s campus work is focused on expanding new revenue-producing units and associated services, as well as repositioning existing assets to improve operations and service delivery, and recalibrating unit mixes by service levels or within service levels.
One of the easiest routes to expanding, of course, is to overtake that large, undeveloped parcel on your campus. You could also secure adjacent property, if available. With each exciting path to new construction, however, come very serious, long-term considerations.
It’s very critical, before initiating a new development project, to pause and reflect on your long-term strategy. You should have a well thought-out roadmap, or at the very least, a business plan that takes you from your current situation into the next several years of evolution of your campus.
With a plan, you can be far more confident in your short- and long-term moves. With any plan you create, you will want to maximize the density of your new construction. This means building as small a footprint, with as many allowable stories, to which you are entitled by local zoning and development codes. You will have to ask many questions of your project. What can I afford? What other expansion needs should I incorporate at this time? What will my next step, then the next, be?
As easy and tempting as it may be, plan your new addition in such a way that allows you a zone for future growth. Perhaps you know exactly what that expansion might be, or perhaps it will be dictated by your future market. In either case, leaving a ‘future build zone’ on your campus will serve you well.
You should also give thought to where you will best be served in conserving expansion property on your site. While this might be more of a dice-rolling proposition, there are questions you can consider. What will my next two or three moves look like? What will my next best revenue enhancement be? What services will I need to stay atop my market?
Flexibility will always be your key driver in this instance. For example, you may have to decide whether to build adjacent to your IL cottages, or next to your health center. Your obvious first consideration is who you will be serving. In addition, which of your various business centers will you want to grow next – cottages, IL apartments, memory support or another health center related business? Finally, with the placement of your expansion, have you given yourself the widest range of options to further expand your future services?
Driving density in your planning is always a positive step. Now, get out there and grow your business!