CMK’s Programmatic & Predictable Development Model: Minimizing Risk and Maximizing Returns

Discover our streamlined development process that reduces risk, provides reliable results to tenants, and ensures consistent cash flow for investors.

In the world of commercial real estate development, the ability to minimize risk and ensure a predictable outcome is crucial for success. As an investor, you should be confident that your capital is being deployed in a manner that mitigates risks and maximizes returns. At CMK Properties, we understand this and take an intentional, meticulous approach to our projects from start to finish, ensuring our development opportunities are no more risky than traditional acquisitions, yet provide the opportunity for better investor returns as compared to acquisitions. Similarly, for tenants seeking a reliable and sustainable business location, the predictability of the development process is of utmost importance. As a tenant, you need assurance that the property you occupy will be delivered on time, within budget, and meet your specific operational requirements.

At CMK Properties, we have established a streamlined development process that reinforces our solid, stable, and predictable approach to real estate. In this blog we will explore the key steps we take to create a solid foundation for our projects, resulting in a development process that is rewarding for tenants and investors alike.

1. Start with a Tenant-Centric Approach

A crucial first step in minimizing development risk is to prioritize tenants who demonstrate resilience and stability. At CMK Properties we look for tenants with a long track record of success, resistance to market disruptions, and adaptability to changing circumstances. By forging strong relationships and becoming the primary developer for tenants within a certain radius, we have been able to align interests and secure a stable foundation for future projects.

2. Analyze Key Demand Drivers

Next, we thoroughly analyze the key demand drivers that underpin the success of the intended tenant by examining their most prosperous locations and leveraging data-driven tools to identify patterns and trends. Heat mapping techniques can help pinpoint areas with high demand potential, ensuring that development is targeted towards locations that are likely to yield positive returns. With our early childhood education developments, for example, we seek locations with high waitlist times for preschool enrollment.

3. Conduct Comprehensive Due Diligence

Once potential development sites have been identified, we conduct comprehensive due diligence to assess their viability. It’s important to consider not only the immediate site but also the surrounding area and to evaluate factors such as demographics, market trends, competition, and infrastructure to ensure the presence of sustained demand. This step helps mitigate the risk of investing in oversaturated or economically unstable locations. 

4. Address Entitlement and Zoning Challenges

Navigating the entitlement and zoning process is a critical aspect of risk reduction. At CMK we work closely with local authorities to adhere to regulations and secure all necessary permits. By proactively addressing potential hurdles in the early stages, we minimize delays, mitigate legal risks, and ensure a smoother process overall.

5. Develop Prototypical Designs

A key to our development success has been the implementation of prototyped designs that can be replicated across multiple tenant locations. Standardized designs offer several benefits, including lower construction costs, streamlined project management, and reduced risks associated with design experimentation. Prototypical designs also enable us to optimize operational efficiency and maintain a consistent brand image for the tenant.

6. Secure Guaranteed Pricing

To further reduce risk and maintain budget control, we always negotiate guaranteed pricing agreements with our contractors and suppliers. This approach provides us with a predictable cost structure and protects against unforeseen cost escalations during the construction phase. 

7. Implement Robust Construction Management

Implementing a robust construction management process is essential for maintaining predictability and quality. At CMK Properties we devise a detailed construction schedule, closely monitor progress, and exercise strict quality control measures throughout the project. By proactively managing construction timelines, costs, and quality, we ensure timely project completion and consistently deliver properties that exceed our tenants’ expectations.

One final point to note is that there is no substitute for experience.  At CMK our team has collectively delivered over 700 single tenant net lease development projects. We love developing real estate!  When you combine that deep experience with our talent, drive, and passion for real estate it results in happy clients. 

In conclusion, achieving success in commercial real estate development requires a methodical approach that minimizes risk and ensures predictability. At CMK Properties, we have established standard procedures that operate like an assembly line, delivering consistent results, providing partners with a sense of stability, and ultimately maximizing investor returns. As always, we maintain a solid, stable, and predictable approach to real estate development and investment.

If you’d like to hear CMK Properties Founder John Hopfensperger speak further about our development process, check out his recent interview on the Wealth Matters Podcast with Alpesh Parmar. If you’re interested in partnering with us for an investment or development project, please click here to contact our team today.