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  • Writer's pictureJennifer Bernstein, CCIM

Navigating Site Selection Fatigue and Texas Development

Updated: Feb 7

Site selection fatigue can be a common concern in commercial real estate development. It refers to the overwhelming process of choosing the right location for a development project. This task can be daunting, given the numerous factors that need to be considered, from demographics and market trends to accessibility and competition.

You do not need to reinvest the wheel when it comes to site selection ideas. One valuable piece of advice is to follow in the footsteps of experienced developers like HEB. HEB, a well-known grocery store chain, has earned a reputation for its successful site selection strategies. They follow stringent parameters when choosing locations for their stores, ensuring a high probability of success. They generally purchase well in advance of their development plans and wait for the market to catch up to the thresholds they require before building the stores. Sometimes they end up selling the land instead of building, but generally, it is still a good indication that there will be good future growth in an area they are interested in.

For commercial real estate brokers and developers, studying the criteria and parameters established by companies like HEB can provide valuable insights. These parameters often include factors such as population density, income levels, traffic patterns, and proximity to competitors. By adopting a similar approach, you can minimize the risk of site selection fatigue and increase your chances of choosing the right location.

Another intriguing correlation to watch is between school construction and utility infrastructure development. Schools play a vital role in communities, and their construction often leads to significant investment in infrastructure. When new schools are built in an area, it can trigger a wave of development and improved utility services.

Commercial real estate professionals can use this insight to their advantage. Keeping an eye on areas where schools are being constructed can provide valuable clues about future growth and development opportunities. Developers who are quick to recognize these trends can position themselves for success by investing in the right locations at the right time.

A great example of this is Manor, Texas, a city that currently experiencing a surge in development plans to support the employment influx brought by Samsung and Tesla. It has been speculated that Taylor is not equipped and ready to support the influx of Samsung so people have been looking to Manor. With schools being built to accommodate the growing workforce, there is an increasing demand for housing and commercial space in the area. This presents a significant opportunity for real estate professionals looking to invest or develop in Manor.

Manor, TX City
Manor, Texas

When deciding where to invest or develop, leveraging Bureau of Labor Statistics (BLS) reports can provide valuable data on the labor force in an area. Understanding what drives the local job market is essential for making informed decisions. Areas with a growing labor force often translate into increased demand for retail and commercial spaces.

Furthermore, Texas offers unique advantages for businesses and investors. The absence of state income tax is a compelling reason for individuals and corporations to consider moving to the Lone Star State. Additionally, many municipalities in Texas are offering bonds to fund infrastructure projects. These bonds serve as excellent markers to follow when deciding where to develop. Opportunity zones, designated areas with tax incentives for investment, are also worth considering as they can provide substantial benefits for developers and investors alike.

Site selection fatigue is a challenge that commercial real estate brokers and developers often face. However, by learning from experienced developers, staying informed about school construction and infrastructure developments, and considering factors such as BLS reports, tax incentives, and opportunity zones, you can make more informed decisions when selecting various development sites. In the dynamic landscape of commercial real estate, staying informed and adopting best practices is essential for achieving your goals and increasing your net worth. As you continue to grow your expertise in real estate and explore business partnerships, remember that knowledge is your greatest asset, and Texas presents a promising landscape of opportunities for those willing to seize them.

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