The Most Important Question That a Real Estate Developer Should Ask Himself

Some days ago I tried to explain to a taxi driver what a real estate developer really was. For him it was inconceivable that a person who did not design the building or build it was leading the project. The conversation left me thinking about the true role of a real estate developer.

Unlike other publications, where we present a framework that allows us to understand a specific concept, this time we prefer a question. The purpose of the real estate developer can be focused on:

How can we generate more value in less square meters?

Certainly, the question opens several edges and points of reflection and could even have different implications depending on how it is read. But centrally the idea is clear, we must deliver more value with increasingly scarce resources (think of land, time, and cost).

When we speak of value two side of the coin arise. On the one hand, the financial value, as the return we give investors. On the other hand, is the value of the city, which we generate to the users of the spaces we create. Being a real estate developer of a single value is not sustainable.

The financial value is easy to measure. There are dozens of metrics that are becoming more precise thanks to technology. In contrast, the city value is increasingly difficult to detect and measure. When we are told that a project is facing problems in sales it actually has a problem of value creation. When perceived value is higher than the price (which is the goal we seek in 4S projects), the sales process becomes a very subtle demonstration experience.

As time goes on, new projects – which are more expensive to build – have to compete with the city that already exists. This means that fewer square meters will have to deliver more value if they wish to compete against the past. The developer’s ability to find new value in the market is the true real estate development.

The answer is wide, it is personal and it is unique – it belongs to each developer. Delivering reliable information that helps to better understand the question, is 4S’ work.

We never fail to integrate better answers to the question that gives us the leadership of the project.

* Carlos Muñoz 4S is a value creator for real estate projects. Through Grupo 4S, he has participated in over 1,000 projects in 14 countries. Contact goes through:

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