A feasibility study assesses how likely it is that a parcel of land can be developed successfully, and what uses would bring the best profits. The analysis focuses on factors which will affect a project, ranging from economic conditions to market assessment, location analysis, what the competition is doing, and likely users. We weigh which factors realistically impact a property’s highest and best use, and whether one or several uses would bring the highest return on investment.
Before tackling the specific property features, we address questions like these:
Is the local/regional economy healthy? If the economy turns, what will that do to a long-term development project? Where will demand come from? Is the market saturated or prime for a new project? How long should it be before you turn a profit? Are there any new highways, changes in land use and zoning, or major changes to utilities in the region?
The next step is sizing up how suited the property is for the proposed project. Is this the best location? Are there any technical site issues? Can the buildings be situated so they are easily accessible and visible? How much depth of market analysis is required depends upon the project. Realistically, the analysis must include evaluation of the likely attitudes of the public, government agencies, and elected officials toward the type and location of the proposed development.
- Supply & Demand Factors
- Development Concept
- Market Fit
- Competitive Factors
- Analysis of Absorption
- Projected trends in Income, Turnover, Vacancies
- Development Risk
- Liquidation Risk
- Market Interviews