What is typically the first step in the real estate development process?

The first step in the real estate development process is typically the pre-development phase. This phase is crucial as it lays the groundwork for all subsequent activities. During pre-development, developers conduct initial research and assessments that help shape the project. This includes determining the feasibility of the site, understanding zoning regulations, and assessing financial implications.

It is in this phase that the developer identifies project goals and objectives, reviews site conditions, and engages with stakeholders. This preparatory work is essential for ensuring that the project moves forward with a clear understanding of potential hurdles and opportunities. Without a solid foundation during the pre-development phase, later stages such as market analysis, entitlement, and construction can become significantly more complicated and potentially risky.

In contrast, construction occurs much later in the process, and while market analysis may be part of the overarching strategy, it typically occurs within the pre-development timeframe. The entitlement process, which involves securing the necessary approvals for the project, also follows after the initial pre-development activities have established the viability of the project concept.