Before proceeding with the development, however, there must be evidence that the project is feasible or that market acceptance of the end-product (single family houses, offices, warehouses, etc.) is highly likely. This step is important even though the land developer may or may not be the developer of the final product. In other words, in the land development phase, the developer must anticipate and understand the demand for the final product (or products in the case of a mixed-use land development). For example, the economic drivers may alter the land use for residential, industrial, or for commercial developments.
In residential land development, it is common to find firms specializing in the acquisition of raw land in suburban fringe areas and developing sites for single family detached units or for multiple uses, such as combinations of single family units, multifamily apartments and cluster housing.
Based on the market segment in which the end use will likely sell, the land developer
- Acquires land
- Develops a land use and traffic circulation plan
- Constructs streets, lighting, and subsurface improvements (utilities, drainage, sewage)
- The developer then subdivides individual sites, and sells smaller sites to builders and project developers.
- The developer may also retain some retail sites for later sale if the site has suitable highway frontage.