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What is the commercial real estate life cycle?

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There are three major constituencies in the real estate process:

  • Space producers – Those who develop properties (e.g., developers) or who provide the capital for the property development (e.g., investors, lenders);
  • Infrastructure providers – Those parties who have a significant impact on the real estate environment in general and on the utilization of the individual properties in particular, including governmental bodies, by providing amenities and services and creating the regulatory environment within which real estate operates; and
  • Space consumers – Those who directly consume the space (e.g., tenants, owners) or who indirectly consume space (e.g., customers, clients) and consume goods and services made available at a particular facility.

The role of these different constituencies depends on the current stage of the life cycle of property: construction, acquisition, occupancy, operation, renovation, repurposing, disposal and demolition.  Optimization of real estate use involves great costs at all stages of a property’s life-cycle.  Real estate engages different professionals in various capacities during each distinct phase of the property’s life cycle.

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