Developers DON’T Want You to Dilute Your Brand

By: Bradley Gillis
DEVRECO, LLC

If you were a mechanic by trade would you ever dream of doing open heart surgery because you thought you were good with your hands?  Hopefully not.  You would think it would be the same when it came to being a Real Estate Developer.  Unfortunately that’s not always the case.  The reality is – the “I can do it” mentality can end up interfering with a business’s core competency and waste valuable time, resources and capital.

When it comes to commercial real estate, Developers take on the risk to benefit the client.  Since every resource (land, property, money, time) can be put to alternative uses, every decision has an associated opportunity cost.  These costs are fundamental costs used to calculate the cost benefits of a project and are evident when decisions are made resulting in either a profit or a loss.  Developers provide a seamless process from concept to completion that allows the end user to maintain focus on their core business without missing an opportunity to make a sale, treat a patient or reach a new audience.

An example of Developers at work was when Peninsula Orthopedic Associates (POA), experienced growth in demographics and their target patient mass back in the early 2000’s.  At the same time, Worcester and Sussex Counties were rapidly growing along with the demand for healthcare services.  In response to the demand, POA founders Dr. Tom Brandon and Dr. John Hedger optioned 36 acres of land under contract in 2006.  They knew in order to expand and grow their business they would need to physically move their offices to a new location.  Experts in orthopaedic care and diagnostic services for muscles, joints and bones – and not real estate development, Doctor’s Brandon and Hedger became frustrated with the process and turned to Devreco for help.

After Devreco built a new 30,000 square foot office on Woodbrooke Drive and sold it to POA other medical professionals followed in their footsteps.  The best part – the footprint was already in place.  Peninsula Imaging and Peninsula Regional Medical Center were next in line to expand into the Woodbrooke Health Campus, followed by Peninsula Main Street Occupational Health & Urgent Care, Delmarva Pharmacy and Three Lower Counties Community Services, Inc.  Devreco was brought on board to facilitate real estate deals that would help create opportunities for the medical community to be more accessible to the growing population.

Navigating through complicated and constantly changing regulatory processes – who has time for that when you are running a business?  You don’t have to.  Local developers are constantly assessing ways to streamline processes to deliver custom real estate solutions.

They have the mastery, history and insight on industry trends that ultimately provide methods to fast track design, financing and building for any project.

Flexibility is another added benefit provided by real estate developers.  Having the option to purchase, lease or lease with the option to purchase puts the power in the end user’s hands. Real estate developers like Devreco are in the business of providing all of these options.  They have the insight behind what option be most beneficial to the real estate user.  Things like knowing companies can actually write off 100% of a lease but when they purchase they can only write off the interest portion of their mortgage.

Look at institutional sophisticated users like Walmart, Target and Giant and you’ll notice a trend.  They all lease their buildings. “They” don’t want to own real estate because it ties up their ability to leverage their business by limiting their ability to grow, expand and potentially relocate. The Salisbury Giant has leased the store’s space on Business 13 for over 50 years because it made the most sense to the company’s bottom line. The franchise could use their capital to buy applesauce and chicken nuggets instead of fulfilling a real estate investment.

As forward thinking companies continue to look at regional trends and changing environments, business relocation may become a reality.  If the company originally purchased property, the piece of real estate then becomes a liability.  But if a developer was involved in the transaction from the beginning they would help the real estate user determine the lowest cost of occupancy for acquiring space.

One more scenario to wrap this up – think about when you go to buy a house.  What do you need?  A realtor, a mortgage broker and an inspector, of course.  When you are ready to invest in commercial space for your business, all you really need is a developer.  They are the one-stop-shop you are looking for to make it all happen without distractions, frustration or stress over your business, your people and your livelihood.

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