Development Risk

There is development risk connected with a property that requires considerable development or redevelopment, which might take the shape of construction risk or entitlement risk. Construction risk refers to the possibility that the project may not be completed on time, resulting in greater construction expenses, or that problems will be discovered after completion. If the investment contains a development component, it is critical to ensure that the sponsor has relevant experience in construction project management.

When attempting to acquire a property and develop it for a specified purpose, there is a danger that government authorities with jurisdiction over the property will refuse to grant the necessary approvals to allow the project to move forward. This is common in new development projects, which often necessitate a lengthy entitlement process to acquire construction approvals. This must be completed before work can begin.

The length of time it takes for approval to be obtained is frequently unpredictable, and it can cause construction dates to be pushed back, affecting the property investment's profitability. We will be working with already existing Assets initially and hence this risk will be minimal from our point of view.

In order to avoid this risk segment totally, the platform will focus only on established assets and not on half complete assets. Hence till the time we allow fund raising for new projects this risk is non-existent for Reitcircles