Where Developers Go Wrong Post-Entitlement

Securing city approval for a project can feel like a major win—and it is. But for developers, this is where the real pressure begins. Too often, we see developers exhale after approvals, assuming the heavy lifting is done. In reality, the Design Development (DD) phase is where real value is either protected—or lost.

This is the point in the process where every early assumption gets stress-tested against real-world costs and constraints. Getting it right isn’t just about aesthetics or meeting code—it’s about risk management, strategic alignment, starting early, and ultimately, execution.

Rechecking the Pro Forma: The First Problem to Solve

Most pro formas are built on assumptions—unit counts, build costs, rents, sales velocity. Once entitlement is secured, those assumptions need to be pressure-tested.

Did you make concessions to get through planning? Did the unit count change? Were promised amenities added to appease neighbors? Every change impacts your financial model. This is the moment to recast the pro forma and ask:

Does this still work?

This is where many developers go wrong—they skip this recalibration. If the numbers no longer pencil, you’ve got critical decisions to make. Can you pivot from rentals to condos? Are you better off selling the entitled land? Or can you value-engineer your way back to viability?

CHARLESGATE often steps in here to help clients re-strategize—because solving for viability now avoids disasters later.

Hold vs. Sell: A Strategic Fork in the Road

At this point, many developers confront a shift in strategy. Maybe rising property values invite offers to sell the site outright. Maybe the revised unit count makes rentals less attractive than for-sale product. Or maybe the deal still works as planned and you’re moving forward as a long-term holder.

Whatever the outcome, the important thing is that the decision is made now, based on updated facts—not nostalgia for the original concept.

The most successful developers are the ones who stay nimble, not sentimental. We often works with developer partners to re-forecast exit strategies in real time, helping to identify which path maximizes ROI based on where the market is headed, not where it’s been.

Design Development: Four Critical Systems to Solve

If the pro forma clears the viability test, you’re officially in DD—and now the goal is simple: Reduce ambiguity to reduce risk. Here’s where to focus:

1. Mechanical, Electrical, and Plumbing (MEP)

These systems are the backbone of the building. Missteps here cost time and money. We work with developers to make sure coordination between consultants is tight and early-stage budgets reflect real system needs—not just placeholder numbers.

2. Floor Plans

Don’t rubber-stamp the architect’s first draft. This is where livability, marketability, and cost efficiency intersect. We typically run multiple iterations, test-fit units, and balance unit mix and size based on current market data.

3. Exterior Materials

You don’t need to pick every finish, but locking in key envelope materials early can reduce future change orders and give your GC accurate pricing. Delaying these choices just delays your budget accuracy.

4. Interiors and FF&E

Finalizing specs for finishes, fixtures, and amenity space furniture may seem premature, but the earlier they’re chosen, the more accurate your pre-construction numbers will be. Leaving these open-ended invites scope creep—and cost creep.

At CHARLESGATE, we approach FF&E and interiors with the same discipline as structural design. Every decision here affects rentability or saleability down the line.

The 2% Rule: Why Finalizing Now Saves Later

It’s tempting to leave some decisions until post-financing or post-closing. But the more that’s nailed down during DD, the fewer surprises you’ll face. If your plans are 98% complete, you’ve eliminated nearly all the guesswork—and reduced your risk exposure significantly.

That last 2%? It’s where the majority of budget overruns and construction delays come from.

We regularly advise developers to front-load this work in DD. It may feel like added time now, but it pays dividends in execution, lender confidence, and general contractor accountability.

Final Thought: Build Smarter, Not Just Bigger

Design Development isn’t glamorous, but it’s where deals succeed—or fall apart. It’s the moment where strategy becomes structure and vision meets budget. The most resilient projects are the ones where developers take DD seriously—not as an administrative step, but as a series of solvable problems that, once addressed, lay the foundation for a successful build.

At CHARLESGATE, we don’t just design buildings—we help solve the right problems at the right time. DD is where we help developers build smarter, not just bigger. Because getting it done isn’t the same as getting it right.