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One of the most challenging aspects of real estate development is getting new projects off the ground. With 70% of real estate project delays happening before construction begins, getting the pre-development phase right is essential.
Delays are more than just frustrating. They're costly and cause stakeholders to lose confidence. Here's why roadblocks and bottlenecks occur in pre-construction and how you can reduce them.
Understand the Domino Effect During Pre-Development
A few little things here and there can suddenly combine to create a significant setback. Everything from a rainy day to a COVID outbreak can halt construction. However, several pre-development delays can occur well before the construction team arrives on site.
When we talk about the "domino effect" that can negatively impact your pre-development, we're specifically speaking to three main issues:
- Minor setbacks add up to substantial project delays
- One-off situations can derail your project schedule
- Minor delays add up to costly budget overruns
Let's say you're planning the ground-up construction of a new office building. You must complete everything from selecting numerous vendors to managing a high volume of costs while ensuring accuracy.
Traditionally, you track these details in various project spreadsheets, checklists, email threads, and other filing systems. It's difficult for employees to constantly sift through these sources and find the information they need to complete pre-development tasks with the most relevant, accurate data. It can feel nearly impossible to make time-sensitive decisions. When your team finds themselves bogged down in disorganized paperwork and multiple spreadsheets, it's no wonder their decisions are slow at best and incorrect at worst.
With so much to manage and no clear, simplified way to do so, it's easy for a project team to fall behind, losing a few days each month to inefficiency. Making the wrong decision based on inaccurate data could mean selecting a more expensive vendor, not realizing a particular material is subject to inflated prices at the time, and more. All of which eat into your project returns.
One to three days of delay each month can add up during the 12+ month pre-construction phase, totaling up to more than an entire month of time and money lost, thus putting the domino effect into motion.
With a few mistakes here and there, your project is both running long and going over budget. It becomes a vicious cycle. No one is happy, not your investors, not your leadership, and certainly not you.
Regain Control of Your Project
It's well past time that you stop playing dominoes and de-risk your projects!
For many teams, the problem comes down to inadequate planning. During the pre-development phase, planning includes calculating the types of equipment, materials, suppliers, human resources, time, and cost required to complete the next construction phase. By having data-backed planning rather than trusting your gut instinct, you can enjoy more informed decision-making.
Using better pre-development tools unlocks the ability to:
- Quickly assemble, plan and develop new projects while leveraging the power of automation and data.
- Leverage your powerful historical cost and vendor data to make more informed assumptions during project budgeting.
- Modify project budgets while avoiding data entry and formula errors.
- Manage critical tasks and milestones to ensure projects stay on track.
- Assemble accurate cash flow projections and draw schedules in seconds to better manage capital and impress your financial partners.
Proactive decision-making positively impacts both ROI and stakeholder confidence. With Northspyre Plan, you can manage pre-development tasks in one centralized system. We offer a cloud-based, proactive intelligence platform that empowers your real estate project teams to get easier, more predictable outcomes even before you break ground.
Tag(s): Real Estate Technology
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