What Is Commercial Land Development

What Is Commercial Land Development

If you are in construction or a similar industry, you have likely heard of commercial land development. Commercial land development is, essentially, a development that is done on private land and is intended for business that is not heavily industrial or residential, either. This can be a retail location, service station, mall, or more!

Commercial land development is crucial to any urban area, as most companies cannot operate without a building or HQ. It helps urban areas to grow and expand. It forms the core of the local economy of this area! Commercial property can also decrease local charges because they add to the tax base of the area in which it is located. 

Read on for a greater explanation of what commercial land development is and what you can expect if you yourself are embarking on a commercial development project. 

What Do Commercial Developers Do?

A commercial developer or a commercial real estate developer is an individual who handles the purchase, building, and leasing of commercial real estate. When a commercial developer is in the buying stage for a commercial development, they may either buy a plot of land, or they may buy a structure that already exists. 

A commercial real estate developer who excels at their job should be able to identify and subsequently enhance properties with great potential. These can range from residential real estate like apartment buildings, to skyscraper buildings of offices or retail spaces. Sometimes, commercial real estate developers may build these from the ground up, and in other instances, they would add new features to the existing buildings. 

Difference Between Commercial Development and Commercial Construction

You may have heard both the terms commercial development and commercial construction floating around. Commercial development and commercial construction are two interconnected but distinct processes within the commercial real estate and construction industries. Here are the primary differences between the two:

1. Commercial Development:

Commercial development refers to the process of identifying, planning, and executing a commercial project from conception to completion. This includes activities such as:

• Identifying potential project sites and conducting feasibility studies
• Acquiring land or properties for development
• Securing financing for the project
• Obtaining necessary permits and approvals from local authorities
• Creating a development plan, including determining the project’s scale, scope, and intended use
• Hiring and managing a team of professionals, such as architects, engineers, and construction contractors, to execute the project
• Marketing and leasing or selling the completed property

Commercial development is when a developer makes choices to improve an already existing building by creating, developing, and coordinating changes. Essentially, they are further “developing” the structure!The commercial development process focuses on the broader aspects of creating a commercial project, including financial, legal, and planning elements.

2. Commercial Construction:

Commercial construction, on the other hand, is the physical process of building or renovating commercial structures as part of a development project. This includes activities such as:

• Site preparation, including clearing land, grading, and excavating
• Constructing the building’s foundation, frame, and exterior
• Installing utilities, such as plumbing, electrical, and HVAC systems
• Finishing the interior spaces, including walls, flooring, and ceilings
• Installing fixtures, furnishings, and equipment
• Landscaping and exterior site improvements, such as parking lots and sidewalks

Commercial construction focuses on the actual building process and the creation of the physical structure, working closely with architects, engineers, and other professionals to bring the development plan to life.

Another difference between the two is the types of buildings that are considered commercial development or commercial construction. Commercial development is referring to buildings that are used by for profit businesses only. Commercial construction, though, is a term that is more expansive. a commercial construction process can refer to anything that is under the commercial umbrella. Some examples are hospitals, offices, warehouses, manufacturing facilities and infrastructure projects. 

In summary, commercial development encompasses the entire process of creating a commercial project, from concept to completion, while commercial construction is a critical component of that process, focusing on the physical construction or renovation of commercial buildings.

What is Included in Commercial Construction?

Commercial construction projects can vary greatly in purpose, as well as in size and scale. This refers to the practice of building, renting, and selling structures for business purposes, or in the private sector. Different examples of commercial construction can include commercial plants or factories, workplaces, and medical buildings. Restaurants or cafes can be considered commercial construction, too. 

There are many different kinds of buildings that are considered commercial construction, so this touches many different industries. It is for this reason that commercial construction is considered so vital. Commercial construction also has a strict set of rules and regulations, so not just any project can be successful. Part of the reason that these are regulated is for safety, but also for the accuracy of the project. Examples of common commercial development projects include the following:

• Grocery stores
• Offices
• Manufacturing plants
• Medical facilities
• Retail shopping centres
• Retail
• Restaurants
• Sports facilities 

What is Not Included in Commercial Construction?

There are three other main types of construction, outside of commercial construction. These other types of construction are residential, industrial, and infrastructure construction.

Residential Construction

Residential construction refers to the building of structures that are meant to be lived in. These are limited to single family houses or lofts up to 4 stories high. Typically, this is done from the ground up on empty land that a developer will purchase. Examples of residential real estate include the below:

• Homes
• Garages
• Sheds
• Small apartments
• Barns

Industrial Construction

Industrial construction is the building or development of a company that is meant to assemble products. Some examples of this include solar farms, power plants, and assembly plants. Think of what you would consider to be an industrial building, and that is likely considered under the umbrella of commercial construction. Examples of an industrial property include the below:

• Factories
• Energy facilities
• Distilleries

Infrastructure Construction

Infrastructure construction is the last of these three construction types. Infrastructure construction refers to public projects like dams or pipelines, for instance. These projects are usually the most expensive of the types of construction, and they take significant amounts of time to complete as well. Examples of infrastructure construction include the below:

• Sewer systems
• Roads
• Airports
• Bridges

Frequently Asked Questions

What is meant by commercial development?

Commercial development refers to the building of any structure or building that is erected with the purpose of doing business within its walls. Some examples could be grocery stores, restaurants, retail stores, malls, and coffee shops. However, a house or building that a family plans to live in is considered residential development or building, instead of commercial development.

What is commercial and industrial development?

Commercial and industrial development is the development of buildings and other spaces that are built to do business inside of. Industrial development can include larger, more industrial spaces like factories, warehouses, or facilities like energy plants. Essentially, these are spaces that are built and not meant to be lived in. Commercial real estate development can also include spaces like retail stores, restaurants, and hotels or offices.

What are the types of commercial buildings?

There are many different types of buildings that can be considered commercial buildings. Some of these include hotels, warehouses, restaurants, and office buildings. These are all very common types of commercial property that you probably see every day!

Why is commercial development important?

Commercial development is so important because it is key for the economy of an urban area– commercial buildings can help to reduce the taxes in a town, because they add to the tax base of the area they are built in. They also facilitate growth in urban areas, helping the town or city to expand. There is a direct correlation between the amount of commercial development in an area and the growth and life of the area as well. 

For more topics on commercial development and construction, check out our blogs on What is Commercial Construction and What is Industrial Construction