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Building Small: A Toolkit for Real Estate Entrepreneurs, Civic Leaders, and Great Communities
Small-scale, incremental, real estate development offers a growing alternative to more conventional approaches. It helps create more authentic places, acts as a magnet for new investment, helps attract talent based employment, all while fostering a more resilient local economy. This in turn helps communities better differentiate themselves when seeking new investment in an increasingly competitive landscape. For its virtues, however, entrepreneurial real estate developers working to ‘build small’ face jurisdictional and capital inertia that impedes bringing this approach to scale. Drawing on extensive research and using case studies, interviews with over 100 developers, and first hand knowledge gained from tours through15 cities, author Jim Heid articulates what small-scale development means, why it is essential to communities of every size and location, and how entrepreneurial developers and community leaders can help remove the obstacles to small—resulting in more successful projects and a better approach to building community.
- GenresUrban PlanningBusiness
264 pages, Paperback
Published March 31, 2021
14 people are currently reading
74 people want to read
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Displaying 1 - 3 of 3 reviews
June 21, 2022
One of the best books on real estate development I’ve read. There are numerous case studies with nitty gritty information such as pricing, funding structure and more.
One of the best books on real estate development I’ve read. There are numerous case studies with nitty gritty information such as pricing, funding structure and more.
What is better for a community?
What are we building today that is worth preserving into the future?
Patchwork vs planned creates incomparable vibrancy
Attend the ULI Small development forums
Economy of scale - Hotel on three different smaller sites
Small not fit w/typical returns 3-5 years exits
Almost every city/town vacant lots, obsolete strip malls, disinvested neighborhood commercial areas, and opportunities for adaptive use of older buildings
Uniqueness, interesting, inspired development
Think of buildings and spaces between them
Economy of scale one hotel 3 smaller sites
small requires more time+emotional capital than big as it seeks contextually responsible, community responsive, market differentiated.
Small is not just urban. Suburban presents more opportunities at a lower cost of entry than does the urban core.
More value per acre rehabbed old blogs, promotes growth that builds wealth, helps 2nd/3rd tier cities elevate game.
Creates authenticity, local appeal, resilient.
May want to focus on 100-140% for new apps workforce.
Older, messier, more crowded streetscape = people happier
Core investments better for cities than sprawl
Report: Older, smaller, better by research & policy lab
Times of high unemployment, small businesses both retain and create more jobs than larger firms do. - Bristol University/Yale Economists
Young people(Millenials) Love old buildings
Creative economy thrives in older, mixed use neighborhood, older mixed use neighborhoods more walkable.
Nonchain restaurants & retailers
High character areas more jobs in small business
Gap filler website - Small projects far less risky, allows for experimentation of new uses.
More tax revenue per acre than Walmart
Gentlefication vs gentrification
Local Small businesses - 52% of dollars spent in stores recirculated into the local economy.
Economic developers should focus on incubators, startups which grow jobs over time. Especially creative old building.
In the 21st century jobs follow talent, innovation districts, talented people want to live in great places
Big developments gain by creating opportunities for small developers to bring their authenticity and magic to more institutional or conventional developments.
Boomers - want to downsize, less maintenance, walkable, hip and vibrant.
Millennials - Good schools, walkable, authentic sense of place
Small town or rural becoming very popular
Institutional developers - don't live small due to time x financial reward.
Course - IncDevs developer bootcamp
small is iterative adaptive, design, refine, improve
Insurance policies - review for construction+defect liability
Developers are generalists not specialists, conductor of orchestra know what questions to ask, admit what you don't know, find people with right answers
Small takes long time - be persistent
Consider how project builds your brand
Negotiate 6 month option to delay repayment of the interest reserve with lender
Send business newsletters to friends about situation candidly. Stay positive.
buying properties from landowners
-Honor the legacy of the neighborhood, honor the landowners legacy, they want their history to continue.
- Persistent, personal communication, building trust
Find land surplus - public agencies, school districts, storage buildings, parking lots. small enough low competition.
Land value - based on zoning, density, demand for development
Start w/simple back of the napkin analysis
Small projects good as can be adaptable if designed right restaurant, coworking spaces, retail, residential, etc.
Ground floor retail one of the most challenging real estate to execute properly. Sometimes $0.00 psf is too much to pay for poor location or poor design.
Pop up retail good way to test location, generate awareness or launch new product.
Millennials spend 20% more on food & beverage than other generations.
Third place - Home, work, restaurant, pub, anchors for small, Saturday farmers market, food halls, brewery, cooking classes, guest chefs, pop up vendors
Permitting, build out can be $500,000 (culinary maker space, incubator kitchens)
incubator kitchen 30% gross revenue from chef, 70% kept by chef, liquor sales kept by incubator.
Cottage courts
- greater density suburban or rural infill. Small clusters of townhomes, Cohousing more than a product type
- young - location over space
- Downsizing seniors - more space for all the stuff
- Less home, more community
- higher density, no multifamily buildings
- can be site built
- exit optionality selling or holding
- each cottage has a nearby secure garage
Amenities for office worker
- daycares, yoga studios, coffee shops
Hotels
- Previously fewer than 100 rooms operations difficult.
- Microhotels/small boutique hotels, ABNB, Homeaway has changed that
Lawyers
Don't let lawyers kill or run the deal. Always read the contract
Ask questions about what you don't understand
Ask for an hourly rate "not to exceed"
Draft executive summary for investors as part of legal documents, 1 page with all details, structure roles, and more page 89 of book.
Capital
Capital cocktail not capital capital stack
Know investors minimum investor
Ask why not investing
Always have a financing backup plan
Be professional have a real domain, email, official legal documents
Include multiple scenarios in financial model
Promote - The reason sponsor does the deal. Return of capital & disproportionate share of profits.
Developer fees - If pushback from bank explain its so you don't have to go get a job and can stay focused on deal.
Mezzanine is cheaper than equity, but can be riskier.
Low Income Tax Credit, Local Initiatives support corporations, historic tax credits, new market tax credits, (enterprize zone 3-5% non profit lending rates.
Buildings create behaviors
Quality data not quantity
RE Demand driven
Retail are of the most location sensitive of all property types
microunit - 350 sq ft of less
- compliant kitchen and bathroom
- high occupancy, rental-rate premium psf
- must be well designed Murphy beds, tuck away tables and desks, multifunction areas
- community amenities very important
One of the best books on real estate development I’ve read. There are numerous case studies with nitty gritty information such as pricing, funding structure and more.
What is better for a community?
What are we building today that is worth preserving into the future?
Patchwork vs planned creates incomparable vibrancy
Attend the ULI Small development forums
Economy of scale - Hotel on three different smaller sites
Small not fit w/typical returns 3-5 years exits
Almost every city/town vacant lots, obsolete strip malls, disinvested neighborhood commercial areas, and opportunities for adaptive use of older buildings
Uniqueness, interesting, inspired development
Think of buildings and spaces between them
Economy of scale one hotel 3 smaller sites
small requires more time+emotional capital than big as it seeks contextually responsible, community responsive, market differentiated.
Small is not just urban. Suburban presents more opportunities at a lower cost of entry than does the urban core.
More value per acre rehabbed old blogs, promotes growth that builds wealth, helps 2nd/3rd tier cities elevate game.
Creates authenticity, local appeal, resilient.
May want to focus on 100-140% for new apps workforce.
Older, messier, more crowded streetscape = people happier
Core investments better for cities than sprawl
Report: Older, smaller, better by research & policy lab
Times of high unemployment, small businesses both retain and create more jobs than larger firms do. - Bristol University/Yale Economists
Young people(Millenials) Love old buildings
Creative economy thrives in older, mixed use neighborhood, older mixed use neighborhoods more walkable.
Nonchain restaurants & retailers
High character areas more jobs in small business
Gap filler website - Small projects far less risky, allows for experimentation of new uses.
More tax revenue per acre than Walmart
Gentlefication vs gentrification
Local Small businesses - 52% of dollars spent in stores recirculated into the local economy.
Economic developers should focus on incubators, startups which grow jobs over time. Especially creative old building.
In the 21st century jobs follow talent, innovation districts, talented people want to live in great places
Big developments gain by creating opportunities for small developers to bring their authenticity and magic to more institutional or conventional developments.
Boomers - want to downsize, less maintenance, walkable, hip and vibrant.
Millennials - Good schools, walkable, authentic sense of place
Small town or rural becoming very popular
Institutional developers - don't live small due to time x financial reward.
Course - IncDevs developer bootcamp
small is iterative adaptive, design, refine, improve
Insurance policies - review for construction+defect liability
Developers are generalists not specialists, conductor of orchestra know what questions to ask, admit what you don't know, find people with right answers
Small takes long time - be persistent
Consider how project builds your brand
Negotiate 6 month option to delay repayment of the interest reserve with lender
Send business newsletters to friends about situation candidly. Stay positive.
buying properties from landowners
-Honor the legacy of the neighborhood, honor the landowners legacy, they want their history to continue.
- Persistent, personal communication, building trust
Find land surplus - public agencies, school districts, storage buildings, parking lots. small enough low competition.
Land value - based on zoning, density, demand for development
Start w/simple back of the napkin analysis
Small projects good as can be adaptable if designed right restaurant, coworking spaces, retail, residential, etc.
Ground floor retail one of the most challenging real estate to execute properly. Sometimes $0.00 psf is too much to pay for poor location or poor design.
Pop up retail good way to test location, generate awareness or launch new product.
Millennials spend 20% more on food & beverage than other generations.
Third place - Home, work, restaurant, pub, anchors for small, Saturday farmers market, food halls, brewery, cooking classes, guest chefs, pop up vendors
Permitting, build out can be $500,000 (culinary maker space, incubator kitchens)
incubator kitchen 30% gross revenue from chef, 70% kept by chef, liquor sales kept by incubator.
Cottage courts
- greater density suburban or rural infill. Small clusters of townhomes, Cohousing more than a product type
- young - location over space
- Downsizing seniors - more space for all the stuff
- Less home, more community
- higher density, no multifamily buildings
- can be site built
- exit optionality selling or holding
- each cottage has a nearby secure garage
Amenities for office worker
- daycares, yoga studios, coffee shops
Hotels
- Previously fewer than 100 rooms operations difficult.
- Microhotels/small boutique hotels, ABNB, Homeaway has changed that
Lawyers
Don't let lawyers kill or run the deal. Always read the contract
Ask questions about what you don't understand
Ask for an hourly rate "not to exceed"
Draft executive summary for investors as part of legal documents, 1 page with all details, structure roles, and more page 89 of book.
Capital
Capital cocktail not capital capital stack
Know investors minimum investor
Ask why not investing
Always have a financing backup plan
Be professional have a real domain, email, official legal documents
Include multiple scenarios in financial model
Promote - The reason sponsor does the deal. Return of capital & disproportionate share of profits.
Developer fees - If pushback from bank explain its so you don't have to go get a job and can stay focused on deal.
Mezzanine is cheaper than equity, but can be riskier.
Low Income Tax Credit, Local Initiatives support corporations, historic tax credits, new market tax credits, (enterprize zone 3-5% non profit lending rates.
Buildings create behaviors
Quality data not quantity
RE Demand driven
Retail are of the most location sensitive of all property types
microunit - 350 sq ft of less
- compliant kitchen and bathroom
- high occupancy, rental-rate premium psf
- must be well designed Murphy beds, tuck away tables and desks, multifunction areas
- community amenities very important
November 29, 2021
This book is an excellent toolkit for developers, urban planners, economic developers, and investors interested in creating and financing community-scale projects. The author provides insights, case studies, and practical information regarding developing small-scale projects that revitalize and invigorate communities. A must read for those interested in community-focused economic development and community building.
November 9, 2021
3.5 Stars. Very solid book. Great use of the trade paperback format, with illustrations and design elements documenting the ideas being presented by the author. I really enjoyed the overall flow to the book and the fact that it can be a resource after the read. In other words, you can flip to the area you want to re-read easily and move around to enjoy certain learning elements.
Displaying 1 - 3 of 3 reviews