Real Estate Feasibility Study Services

1. Market analysis: This examines the demand for the type of property proposed to be built, the competition, and the target market's characteristics.

2. Location analysis: This assesses the suitability of the proposed site for the type of development, taking into account factors such as zoning, accessibility, and infrastructure.

3. Financial analysis: This estimates the costs of the project and projects the potential revenue and profit based on the market and location analyses. This helps to determine the project's potential return on investment, and to identify any potential financial risks.

4. Development Proforma: This outlines the financial projections of the project, including projected income and expenses, cash flow, and the project's overall financial viability.

5. Recommendations: This summarizes the findings of the study and provides recommendations for proceeding with the project or not.

A real estate development feasibility study is important because it helps to determine the potential success of a proposed development project. By conducting a feasibility study, developers can determine whether a project is financially viable and make informed decisions about whether to proceed with the development or not. Additionally, it allows developers to take steps to mitigate or avoid potential risks and challenges. Overall, a feasibility study can help to ensure that a real estate development project is profitable and successful.

An independent real estate development feasibility study can be a useful tool for obtaining a bank loan for a development project. Banks and other lenders often require detailed information about the potential success of a project before they will provide funding. The feasibility study acts as a comprehensive business plan which can help to demonstrate to the lender that the project is financially viable, and that the developer has a well-thought-out plan for the development.

The vast majority of USDA guaranteed and direct business loans require an independent feasibility study to support a loan application. The requirements for these feasibility studies are outlined in the Code of Federal Regulations (CFR) Title 7, Part 4280, Subpart B. This regulation provides the criteria and standards for feasibility studies required for USDA loans and grants.

The USDA and its Rural Development department periodically introduce new and specific programs aimed at supporting certain industries or segments. These programs may have additional requirements for feasibility studies. Therefore, it is advisable to consult with an experienced lender or consulting company to determine the guidelines for a program-specific feasibility study.

To apply for most of the USDA's direct and guaranteed business loans including more popular one like Business and Industry Guaranteed Loan Program and Food Supply Chain Loan, a feasibility study is required to assess the viability of the proposed business or project. While specific requirements for the feasibility study may vary slightly depending on the nature of the business or project, there are several common sections that the USDA is looking for.

Executive Summary: This section provides a brief overview of the project and summarizes the key findings and recommendations of the study.

Economic Impact Analysis: This section assesses the economic impact of the proposed business or project on the local community, including information on job creation, tax revenue, and other economic benefits.

Environmental Analysis: This section evaluates the potential environmental impact of the proposed business or project, including information on any necessary permits or regulatory compliance.

Market Analysis: This section analyzes the market demand for the proposed business or project, including information on the target market, competition, and market trends.

Technical Analysis: This section assesses the technical feasibility of the proposed business or project, including details on the production process, equipment, and technology requirements.

Financial Analysis: This section evaluates the financial viability of the proposed business or project, including financial projections, funding sources, and risk analysis.

Management Analysis: This section analyzes the capabilities and experience of the proposed management team, including their ability to successfully implement the project.

A feasibility study required for the Food Supply Chain (FSC) Guaranteed Loan Program typically needs two additional sections:

Food Supply Chain Factors: This section examines impact of project on the food supply chain and more specifically on agricultural producers.

Safety Conditions: This section assesses factors relevant for food safety, certifications as well as safety of staff and customers.

A good and through study should also have relevant recommendations and conclusion.

Established in December 2021 under the American Rescue Plan Act, the USDA Food Supply Chain Guaranteed Loan Program aimed to bolster the food supply chain in rural areas through loan guarantees primarily in response to the supply chain disruptions due to the COVID pandemic. Despite the program’s tremendous success, it was recently discontinued due to debt ceiling negotiations in Congress.

The future of the Food Supply Chain Guaranteed Loan Program remains uncertain. While its revival is possible, its initial creation as an emergency measure under the American Rescue Plan Act may suggest a permanent discontinuation.

However, alternative programs may offer some relief:

1. The Business and Industry (B&I) Loan Guarantee Program, for instance, supports rural businesses by improving the economic and environmental climate in rural communities.

2. The Rural Energy for America Program (REAP) provides financial assistance for agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.

3. Additionally, the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program provides loan guarantees to develop, construct, and retrofit commercial-scale biorefineries and to develop renewable chemicals and biobased product manufacturing facilities.