San Antonio Commercial Development – Merchant Development –

What is Merchant Development?

In the world of commercial real estate development, there are countless product types. Each product type has its own variables to manage and almost every municipality has their own specific rules governing the development process. No two commercial properties are identical, so please understand that each property also has its own variables to manage. To improve the likelihood of success in your next commercial real estate development project, I highly recommend working with professional advisers experienced in the product type and area that your project is located in. Last week, we started a new series discussing the commercial real estate development product types we are regularly involved in. Today’s article, Merchant Development, will be followed next by Medical Office Development.

Merchant Development

What is a merchant developer? A merchant developer is a developer that builds commercial building and sells them. Merchant developers are responsible for building many of the restaurants, drug stores (CVS/Walgreen’s), Medical Office Buildings, and other single user developments that you drive by each day. The tenants in these types of deals are typically high credit in nature and open sites in many locations on a regular basis. Due to the tenant’s desire to not “re-invent the wheel” on every site that they open, these tenants create relationships with Merchant Developers responsible for site acquisitions (Tenants approve the site) and developing the tenant’s desired improvements. Due to the volume of projects that many of these groups work on, they typically sell the property after completion. Many of these deals have long term net leases with standard terms that allow the developer to sell the properties either through the public market or to investor groups to hold the property long term. Our group has had a great deal of success in representing these types of groups to acquire sites, run proformas, assist with bank financing, review entitlements/easements, negotiate the lease terms with the tenant, manage the development, and sell the properties (publicly or privately) to our national network of long term net leased buyers.

Stay tuned for our next Commercial Real Estate Blog Article! –

NEXT WEEK’s Topic – Commercial Real Estate Development – Week 3 – Medical Office Development

Contact a San Antonio Commercial Real Estate Expert today:

Link LeGrand, CCIM 210-789-5465