Real Estate Development Essay Example | Topics and Well Written Essays - 750 words

Real Estate Development - Essay Example Graaskamp emphasized that developers have a role to play in making social impacts on the community (Greer 34). The real estate decisions they make impact greatly on how the environment of neighborhood will turn out. The developers have to find ways of breaking past constraints to come up with real estate solutions that are favorable to the neighborhood. Graaskamp definition of project feasibility by stating that â€Å"a real estate project is feasible when the real estate analyst determines that there is a reasonable likelihood of satisfying explicit objectives when a selected course of action is tested for fit to a context of specific constraints and limited resources† (Graaskamp 515). Graaskamp’s concept of project feasibility is important in focusing on the assumptions that are involved in the decision to make real estate developments. By considering project feasibility, developers have a chance of making real estate decisions that are beneficial for the market and the investors as well (Etter 95). In real estate development, the term market is used to describe feasibility study refers to the evaluation of a project’s practicability. The feasibility study is normally carried out on the expected cost, operating performance and mortgage market conditions. A project’s feasibility study consists of a financial and market analysis (Graaskamp 517). This study is important as it helps developers establish whether or not a proposed project has the ability to generate enough cash to pay loans and construction debt services as well as provide enough equity capital return. A project feasibility study aims at answering the following questions: what is the developer doing? Who is he doing it for? Whom will he affect? Does the project make financial sense? (520) A market study is described by Graaskamp as the analysis of geographic fragmentation patterns, trends and