How to Improve Your Real Estate Development Process in 2024

The real estate market will have a mixed outlook in 2024, and while economists are hopeful the U.S. will avoid a recession and achieve a soft landing, economic growth remains slow and downside risks will stay high. As a result, investment activity and capital deployment are expected to remain stalled through the first half of the year, contributing new challenges to your real estate development process. Even amid obstacles, your team can take steps to remain agile and competitive in the current market. 

The firms that will be the most competitive in 2024 and beyond must have a forward-thinking mentality around the development process. The current market conditions shouldn’t stop your team from conducting thorough due diligence, staying up to date on new construction practices, and taking advantage of technology to facilitate project management. By implementing a creative funding strategy, prioritizing sustainable practices, and leveraging modern development software, your team can succeed at every stage of the development process, increasing productivity, eliminating overspending, and improving decision-making.

Below you’ll find actionable strategies and tools to improve your real estate development process in 2024: 

The Role of Alternative Funding Strategies In Your Real Estate Development Process 

Securing funding and acquiring investments to get projects off the ground will be the main obstacle for real estate firms this year. The economic slowdown and increased downside risk are expected to persist through the first half of the year, and even if conditions don't amount to a full recession, turbulence in the market will make access to capital an uphill battle. The traditional debt markets may be suppressing multifamily construction loans, but you can find alternative capital sources to round out your capital stack and get projects off the ground. 

Government programs such as transit-oriented community incentives and low-income housing tax credits (LIHTC) are among the most common alternative capital sources for developers willing to pursue projects with affordable housing or access to public transportation hubs. The Biden Administration proposed an additional $28 billion in funding for LIHTC programs and a lowering of the bond test, which determines the amount of private equity allowed on a project, potentially opening up new opportunities for your team. Keeping an eye on opportunities to take advantage of relevant grants, tax incentives, private-public partnerships, and other funding sources is essential to stay competitive as state and local governments look to boost housing production. 

Real estate crowdfunding is another financing model that is on the rise amid slow markets, with online platforms allowing individuals or groups of investors to fund real estate projects. Crowdfunding is ideal for portfolio diversification, allowing you to move beyond stocks and bonds and spread risk. Sustainable and green funding, including Commercial Property Assessed Clean Energy or C-PACE grants, are also worth looking into. Government programs are increasingly allocating funds to these programs as concerns about climate and resiliency grow. By incorporating green building materials and technologies into projects, you can make projects eligible for green incentives such as cash rebates, tax credits, and an expedited permitting process.

The Rising Importance of Sustainable Development 

In the next decade, forward-thinking development teams are likely to shift focus toward sustainable and eco-conscious practices. Investors are increasingly looking for opportunities to support projects that meet Environmental, Governance, and Social (ESG) standards, seeing these assets as being lower risk and higher value in the long term. ESG requirements are also likely to impact the type of projects competitive firms pursue as well. For example, The future of urban living is expected to be high-density, mixed-use development with access to public transit.

Incorporating sustainable and environmentally conscious practices into the construction phase of the development process has additional benefits for your team. Sustainable building materials are replacing old standards, and these materials often come in at a lower-cost point and provide other benefits such as increased durability. Green initiatives are also shaping the future of mixed-use construction with LEED certification, zero-energy buildings, and adaptive reuse among the top trends. Your team can stay ahead of government requirements for the industry and make your portfolio more appealing to investors by prioritizing environmentally friendly practices in your development process. 

Streamline The Real Estate Development Process With Technology 

Building complex projects is a major undertaking, and if you’re planning to explore alternative financing methods or incorporate green practices into your development process, your team will need to prepare for additional challenges. Modern real estate development software can help you streamline operations from pre-development to stabilization. Technology like Northspyre eliminates tedious tasks that slow down project management teams, ensuring you meet regulatory requirements while empowering data-driven decision-making.  

Improved Project Management and Collaboration 

Northspyre uses automation to reduce manual data entry, increase productivity, and maximize your returns at every stage of a project’s life cycle. The platform’s industry-leading automation tools accelerate project management by automatically capturing and organizing project documents, extracting data, and categorizing across budget lines. Your team will no longer need to rely on outdated and error-prone spreadsheets, which require extensive manual entry and can create damaging information silos. Data dashboards also provide real-time updates to all relevant stakeholders, reducing the amount of unnecessary back-and-forth communication and ensuring version control.  Improved communication and reporting capability can improve your chances of securing alternative capital sources, and help your team ensure these funds are deployed effectively. 

Ensuring Regulatory Compliance 

When you have an advanced capital stack with multiple funding sources, hitting regulatory benchmarks is crucial for your project’s success. Northspyre helps your development team meet regulatory standards by keeping track of key documents, The platform’s data index allows you to quickly view PDFs, approve workflow histories, make comments, and edit component information, making collaboration across teams simple and efficient. You can search, expand, filter, and organize your data index to meet specific needs, ensuring all your regulatory, zoning, or building code information is easily at your fingertips. 

Data-Driven Decision Making 

All your data is tagged and indexed in Northspyre to enable quick and easy searching in contracts, proposals, and change orders. By enabling your team to make data-driven decisions across your portfolio, you can avoid relying on gut decisions with the potential to derail your projects. Leveraging data allows you to move forward in the development process with confidence, no matter what unique financial or regulatory obstacles 2024 or the following years present. Access to your team’s historical data helps you make stronger decisions in the future, replicating past successes and ensuring more predictable outcomes on your complex projects.  

Learn More About Northspyre 

Northspyre acts as your all-in-one real estate development command center, making it easy to manage administrative tasks like data uploads and document management across your portfolio. The platform caters to real estate development teams of all shapes and sizes and helps you automatically generate investor reports, and stakeholder links, and draw requests simply and effectively. Unlock your development team’s full potential this year by assembling accurate budgets with benchmarked portfolio data, and manage forecasts, contingencies, draws, schedules, and vendors with proactive alerts that save you from costly errors. 

Download our white paper Software Misalignment in Real Estate Development: Right Tech for the Job and discover how your development team can realize the full potential of technology integration.