Information – The Key to the Real Estate Development Process
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Information generation and sharing is an integral part of the real estate development process, but can this information flow be effectively modeled? Is there a simple yet informationally-rich methodology to detail and understand how it is shared between parties in a complex development process? Because the process is unpredictable, many developers fail to plan accordingly, relying on their past experiences or ability to solve problems as they arise. Practitioners who do attempt to model the development process typically use scheduling and project management software to list out the necessary tasks that occur. While these tools work well when tasks are done in sequence, they are incapable of showing the rework and iteration that occurs as ideas are refined in response to new and unpredictable information. As activities in the development process are completed, other tasks need to be revised and updated. It’s a process that is constantly evolving. The Design Structure Matrix (DSM) is a tool that can help us understand and model this iterative process. The DSM has been used successfully in numerous other product development industries (i.e. aerospace, microchips, etc.) to enhance the understanding of information generation and flows. This paper demonstrates the applicability of DSM methodology to the real estate development process and the insights that can be gained from explicating information flows in complex, information-dense processes. Improved understanding of the process can reduce risk and improve project development efficiency.
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Cornell Real Estate Review
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Cornell; real estate; information generation; information sharing; design structure matrix (DSM); information flows; development process; cost-benefit analysis; feasibility; asset management; estimate costs; identify land opportunities; back-of- the-envelope proforma; preconstruction; construction; stabilization; sale
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