For your first deal

Your first retail development, start to finish

Nine stages, from a corner you like to a center that's full. A small strip center in a North Texas suburb usually takes 2.1–4.4 years end to end; the slow stretch is almost always city approvals. Dark bars are the time it takes at best, light bars how long it often runs.

Open a stage for what happens, what goes wrong, and the checklist. Signed in, each checklist loads onto a property as tasks.

1. 1Find the site and tie it upGet the land under contract with time to check it out1–3 months

   You find a corner, agree a price, and sign a contract with a feasibility period — typically 60 to 120 days where you can walk away and get your earnest money back. That window is when everything in the next three stages happens.

   Watch out: Signing without a feasibility period, or one too short to get a zoning answer and a lender's first read. Ask for 90 days; take 60 only if the zoning is already right.

   In root.deal: Screen a land flyer · Site data: traffic, values, openings

   Checklist

   • Sign a land contract with a feasibility period60–120 days. Earnest money refundable until it ends.
   • Order a survey and a title commitmentEasements, setbacks and anything recorded against the land show up here.
   • Pull the traffic count and nearby sales for the cornerroot.deal's Site page shows TxDOT counts, county values and new openings.
   • Walk the site at 8am, noon and 6pmWatch how cars get in and out. Left turns in matter.
2. 2Check what you can buildZoning, utilities, parking and access decide the building1–2 months · alongside

   The city's zoning says what uses are allowed, how tall and how big the building can be, how far it sits from the street, and how many parking spaces you need. Water, sewer and storm drainage have to reach the site. A civil engineer turns all of this into a site plan that fits.

   Watch out: A corner zoned for retail can still fail on parking or drainage. Have a civil engineer sketch the site plan before the feasibility period ends — restaurants need far more parking than shops.

   In root.deal: Zoning on the property page (Dallas)

   Checklist

   • Confirm zoning allows retail and your likely tenantsRestaurants, drive-thrus and medical often need extra approval even in retail zoning.
   • Hire a civil engineer for a concept site planBuilding footprint, parking count, drive aisles, detention pond.
   • Ask the city about water, sewer and storm capacityA pre-development meeting with city staff is free and tells you a lot.
   • Check for easements, floodplain and pipeline setbacksOn the survey and FEMA map. Any of these can take land out of play.
3. 3Pencil the dealDoes the finished center earn more than it costs to build?1–2 months · alongside

   Add up land, construction, soft costs and a cushion. Estimate the rent each suite can get and what buyers would pay for that income (the cap rate). If the center earns clearly more on its cost than buyers' cap rate, there's a profit; if not, the land is too expensive or the rents too hopeful.

   Watch out: Guessing rents from the best center in town, and leaving out construction interest, broker fees and tenant build-out money. Get two general contractors to price the shell before you believe a cost per square foot.

   In root.deal: Import your Excel model · Development budget and verdict · Deal check

   Checklist

   • Get two shell construction estimates per square footFrom general contractors who build small retail here, not a national average.
   • Set rents from three comparable centers nearbyAsk a retail broker what's actually signing, not what's listed.
   • Build the budget with a 5–10% contingencyLand, site work, shell, soft costs, interest, tenant build-out, broker fees.
   • Run the deal check and fix anything redOn the property page once the budget is in.
4. 4Line up the moneyEquity from you and partners, a construction loan from a bank2–4 months

   Banks usually lend 60–70% of the cost; you and your investors put in the rest, often before the bank funds a dollar. Many lenders want some space pre-leased — signed leases, not interest — before closing the loan. They'll also want a personal guarantee on a first deal.

   Watch out: Starting the bank conversation after the land contract runs out. Lenders take 60–90 days; begin during feasibility. Agree the investor split in writing before anyone wires money.

   In root.deal: Investor ledger · Financing

   Checklist

   • Meet two local banks that lend on small retail constructionBring the budget, the site plan and any tenant interest.
   • Confirm the lender's pre-leasing requirementOften 30–50% of the space under signed lease before closing.
   • Sign the investor agreement before money movesShares, who signs the guarantee, how profits split.
   • Set aside the equity the bank wants in firstUsually the land plus early soft costs.
5. 5Get the approvals and permitsPlatting, site plan approval, then building permits4–9 months

   If the land isn't a legal lot yet it has to be platted. The city reviews the site plan, landscaping, drainage and sometimes a traffic study, often across two or three rounds of comments. Then architects and engineers draw the building and you apply for permits. In most DFW suburbs this is the slowest stretch.

   Watch out: Every round of city comments is 3–6 weeks. Budget interest and option extensions for the long case, not the short one. A zoning change, if you need one, adds months and a public hearing.

   In root.deal: Milestones on the property page

   Checklist

   • Submit the plat if the parcel isn't a legal lotAsk the city; replats go to Planning & Zoning.
   • Submit the site plan and respond to each round of comments within a weekThe clock is yours between rounds.
   • Hire the architect for building drawingsShell drawings first; tenants do their own interiors.
   • Apply for the building permit and pay impact feesWater, sewer and roadway impact fees are paid at permit — sometimes six figures.
6. 6Pre-leaseTurn interest into signed leases, suite by suite6–18 months · alongside

   A retail broker markets the center from a rendering. Interested tenants send a letter of intent, you counter, and lawyers turn the agreed terms into a lease. Expect to give some build-out money and free rent to win good tenants. The first signed lease makes every later conversation easier.

   Watch out: Giving the first tenant everything to get a signature. Price each concession: a big build-out allowance on a short lease can cost more than the rent returns. Check every LOI against what the center needs to earn.

   In root.deal: Upload an LOI; compare rounds · What this lease does to the building · TI vs free rent

   Checklist

   • Hire a retail leasing broker and agree the commissionUsually a percentage of total rent over the lease, split with the tenant's broker.
   • Set asking rent, build-out allowance and free rent for each suiteFrom the budget: what each suite needs to earn.
   • Review every LOI against the numbers before counteringroot.deal prices the whole package, not just the rent.
   • Get the first lease signed before the loan closesLenders count signed leases only.
7. 7Close and buildBuy the land, close the loan, construct the shell10–14 months

   You close on the land and the construction loan, usually the same week. The contractor builds site work first (paving, utilities, detention), then the shell. You pay the contractor monthly from loan draws; the bank's inspector checks progress before each one. Interest accrues on what's drawn.

   Watch out: Change orders. Every tenant request that touches the shell costs money and time. Keep the contingency for weather and surprises underground, not for upgrades. Track draws and interest from day one — the first year's carry is real money.

   In root.deal: Construction loan draws and interest · Milestones

   Checklist

   • Close on the land and the construction loanTitle, survey, insurance and the guarantee all land here.
   • Sign a fixed-price construction contract with a scheduleWith a per-day penalty for finishing late, if you can get it.
   • Record each loan draw and the month's interestOn the property page under the loan.
   • Hold a weekly site meeting and keep a change-order logApprove nothing verbally.
8. 8Deliver suites and open tenantsCertificate of occupancy, tenant build-out, rent starts2–5 months

   The city issues a certificate of occupancy for the shell. Each tenant then builds out their suite — 60 to 120 days — and rent usually starts when they open or a fixed number of days after delivery. Free rent runs from there. The property tax bill on the finished building arrives the following year.

   Watch out: Rent commencement tied to the tenant opening. If they're slow, you carry the loan. Tie it to a date after delivery instead. Tell tenants now that taxes will rise once the county values the finished building — it's their NNN charge.

   In root.deal: Critical dates on the dashboard · Tax shock in the deal check

   Checklist

   • Get the shell certificate of occupancyFire, building and health inspections.
   • Deliver each suite and record the delivery dateThe lease's rent clock usually starts here.
   • Pay build-out allowances only against invoices and a lien waiverNever in advance.
   • Set up NNN billing and tell tenants what next year's taxes will look likeUse the deal check's tax figure.
9. 9Fill it, then hold or sellStabilize, refinance into a long-term loan, or sell at a cap rate6–18 months

   Once the center is nearly full and rents are coming in, it's stabilized. Buyers price it at a cap rate on the yearly income; a permanent lender will refinance it on the same income. You choose: sell and take the profit, or refinance, pull some cash out, and keep the income.

   Watch out: Selling with a vacant suite or a tenant on a short lease — buyers discount both hard. Watch lease expirations against the loan maturity; a lender won't refinance a center whose leases end the same year.

   In root.deal: Sell vs lease up verdict · Buyer page · Dispositions

   Checklist

   • Lease the last suites before going to marketAn empty suite costs more in price than in rent.
   • Get a broker's opinion of value at today's cap ratesCompare with the exit cap in your budget.
   • Decide: sell, or refinance and holdroot.deal's verdict compares the two in today's dollars.
   • Build the buyer page and investor memoBoth come from the data already in root.deal.