Latitude Developments » Building Value » Ask Ahmad Khalaf » Real Estate Development Management

Do You Want More Returns?

Of course, you do!

Who would ever say NO to more GAINS?

The REAL question is:

How do you get more PROFITS in today's real estate development market?

You may have hired the best real estate development management consultants, worked on a Highest & Best Use (HBU) study and used every value engineering tactic available in the market.

Never the less, it does not seem to stop the DIMINISHING yields.

Even with the many marketing strategies out there; absorption and penetration rates are still DECREASING.

So how can you GAIN higher yields and better returns on your real estate development and investment activities?

 

We need to find a few answers here.

  1. Which projects will make us higher returns?
  2. How should we develop this project? 
  3. How should we market and sell it? 

"THE MOST CRITICAL QUESTION TO ANSWER IN REAL ESTATE DEVELOPMENT IS WHAT SHOULD WE DEVELOP? WHEN WE GET THIS RIGHT, EVERYTHING ELSE THAT FOLLOWS WILL BE BUILT ON SOLID GROUNDS." - Ahmad Khalaf

Lets Focus:

 

How does the real estate development management team make a development decision? 

Some developers base their development choices on mere aspirations. They may use brainstorming or other means to pass ideas and impressions around. They get excited about a particular concept; then they decide to go ahead.

Usually, the decision is “FOLLOW THE MARKET WITH A TWIST.”

Doing so will eventually lead to DISASTROUS CONSEQUENCES.

Real Estate Developers who adopt this approach are at the mercy of the market.

They make money when the market goes up. Nevertheless, will be the first and biggest losers when markets switch direction.

Any real estate development with no particular function and specific demand to fulfill WILL ONLY COST MORE TO BUILD.  Moreover, when markets cool down, it will attract the LEAST number of buyers and tenants.

We all witnessed this phenomenon over and over again.

Other developers, hire real estate consultants to research the market and recommend a development scheme.

 

Let’s look at real estate development management consulting.

Leading real estate consultancy firms cover every sector in the market including residential, commercial, industrial, hospitality, entertainment, retail, healthcare, and education.

They will present to you their recommendations based on proper demand and supply analysis.

However, after you finish construction, you may very much end up in an entirely different position.

By that time, you could face an oversupply situation, which will reduce your absorption and penetration rates, and produce you lower rather than higher returns.

 

Why does this happen?

First, Real estate development is a 3 to 5-year process. By the time you deliver your project, you will be offering a similar product to all other developers who received the same recommendation as you did.

Second, markets are changing all the time. The speed of change is also accelerating. The last thing you want to do is to play catch up with the demand.

Third, all these recommendations use the same basic methodology, which is benchmarking the competition.

Benchmarking is a robust market analysis tool. However, when developers depend entirely on it, they will end up doing what everybody else is doing. 

We all noticed how most developers tend to move in the same direction at the same time. The fastest developer REAPS the fruits. The followers get the leftovers.

Even if the recommended project is delivering higher returns at this point; there is NO GUARANTEE it will continue to yield the same profits by the time you develop it.

The reality is that you will NEVER get outstanding results if you ONLY benchmark yourself to what the competition is doing.

 

So, how can you INCREASE your gains in real estate development management?

To start with, I do not believe in creative brainstorming as a real estate development decision-making tool.

Neither do I focus on benchmarking exercises to identify a potential real estate development opportunity.

Despite the above, I’m still able to get AMAZING results like no one else.

Because I focus on a handful of tactics that DO move the needle.

 

Why?

Because if I start getting creative in making real estate development decisions, I will be MISSING the point.

"IT IS NOT ABOUT WHAT THE DEVELOPER THINKS. RATHER, IT IS ABOUT WHAT THE MARKET WANTS." 

Further, if I copy the competition, it will be nearly impossible to make MORE money.

"BIG MONEY IS IN CREATING YOUR OWN SPACES, NOT IN COMPETING IN OVER CROWDED MARKETS" 

Last, if I do not identify strong demand generators, I will not generate SUPERIOR GAINS.

"IF THE PROJECT IS NOT IN DEMAND, THEN IT IS NOT WORTH THE TROUBLE; BUT WHEN IT IS IN DEMAND THEN ALL THAT IT NEED IS TO BE REVEALED" 

 

So, Where do I focus my efforts to get the desired profitability results as a real estate development management professional? 

  1. I start by singling out hidden market gaps that the competition did not recognize yet.
  2. I identify untapped demand generators which generate you higher yields.
  3. To enjoy long-term growth, I follow by responding to new trends.
  4. I answer with a MATCHING real estate development project that satisfies the specific customer segment’s needs, aspirations, and expectations.
  5. Finally, I optimize your development cost by creating high levels of efficiencies across the development chain.

 

and, How did I create MORE VALUE?

A sizeable semi-government organization launched a massive mix-use development some ten years ago. They were merely copying the trend at the time. In other words, they were benchmarking the competition.

The project miserably failed as it hit the wall by the end of the real estate frenzy.

Last year I was called by the chairman of the group. He showcased many creative ideas to relaunch the project.

To cut a long story short, I asked him for a chance to revisit the proposed development plan.

Going forward, six months later, based on my recommended asset mix, the land appraisal went from $9.00 to $ 30.00 per square meter.

Three international consulting groups verified the before and after valuations based on my proposal.

YES That’s right, I increased the land value by 300% + in one year.

More, I achieved this massive increase WITHOUT spending a single dollar on creative designs, aggressive marketing or copying other developers.

Over and above, several investment funds showed interest in the project at the higher valuation! These are the same entities that refused to invest in the project at a lower entry point!

 

If you think that’s impressive, look at these results.

I  increased the value of an extensive portfolio owned by a powerful family office by 80%.

Here too, a leading international real estate development management advisory prepared the before and after valuations based on my recommended development program.

Not only that, but the return on investment was 250%. That's $2.5 return for every $1.00 spent.

This same group raised the needed funds based on my valuation. Financiers where happy to offer their money because they found more value in the prescribed development plan.

 

Not many real estate development management experts can say that.

However, do you know what's even more difficult than working on large, long-term, multi-phased mix-use real estate developments?

It is creating above market value for an investor who insists you follow his decision on working in a specific sector!

In this particular case, I increased the expected IRR from 18% to 27%.

What did I do? I dug deeper within his chosen sector to single out a poorly serviced market segment.

Achieving these results is the main reason I love doing what I do.

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Ahmad achievements were amazing. He achieved what many could not. We became very good friends and hold to this date a genuine relationship.

Ahmed is very resourceful and was able to secure unique new greenfield project opportunities for bloom in Iraq, Mauritius, Croatia, and Oman.

Who wouldn’t want more returns like that?

Also, if you think that’s amazing, check out how I enabled a leading investment group to secure an $800,000,000 worth of land for a total cash outlay of $15,000,000 only.

This transaction DOUBLED his IRR.

As you can see from the examples above, I know my stuff. Getting this kind of performance is what I do better than anybody.

Even in the most competitive markets, I can crush it and generate superior value.

I accomplish such results by identifying unique value generators and responding with highly differentiated developments.

I’m NOT supporting you to compete with other developers. I am helping you to BYPASS the competition time and over again, to CARVE your specific market segments, and to GAIN  the yields you deserve.

Ahmad's approach is impressive. We never thought we could generate so much value out of our land. His value-based market research approach identified several highly profitable development opportunities for our group.

Ahmad is very energetic with incredible skills that spanned the real estate sector across the MENA region and beyond. He is very much capable of pulling all the threads together to bring into light the most successful real estate opportunities.

Just like the results which I provided above, the ONE THING I’ve mastered is identifying unique value generators and responding with a market-oriented and value-driven real state development project.

I like FOCUSING on what I am good at and only that, which is: Identifying value generators and responding with a market-oriented and value-driven real estate development.

I then hire the best and most specialized experts there is in the market to compliment my work throughout the real estate development process.

I know what you are thinking!

You may be saying by now. Well, Ahmad, that is all good, but how can you guarantee similar results?

How about this answer?

I believe in RISK/REWARD partnerships. I HAVE MY SKIN IN THE GAME. CONTRARY to conventional practices, I base my fees entirely on the INCREMENTAL VALUE I generate you RATHER than on the time I spend on your project.

I GUARANTEE THE QUALITY OF MY WORK. If I do not meet your objectives & that fault is mine, I will refund your full fee.

==> HERE'S THE DISCLOSURE

If you do not have the intention to Optimize Your project's value OR do not want to adopt a market-oriented development approach,

I WILL NOT BE ABLE TO HELP YOU; PERIOD; END OF STORY.

SO — if you want to work with me and grow your business like the examples above, keep reading…