The Value of a Feasibility Study

What is a feasibility study and what is its value to your project?

A feasibility study considers the critical aspects of your proposed project. It allows us to test the viability of the project before undertaking any real significant expense. The study attempts to answer the big questions early in the decision making process.

We include a feasibility study in our initial ‘discovery’ phase for a project. Why? Well, some of our clients have a defined program – they know what they need or want to build – while others aren’t exactly sure what they need or how large the program can be on a site.

We also thoughtfully consider three “clients” even at this earliest phase: the developer/landlord, the end-user, and the community. We focus on making all priorities for each party align, including marketability, long-term impacts, experience, sense of place, and constructability.

The feasibility study often becomes a tool for defining the vision and goals for a project. It can determine the size of the program, how it can be deployed on the site and what hurdles must be overcome to achieve a successful project.

What’s the danger of a project proceeding without a feasibility study?

It’s similar to spontaneously traveling to a new place without a map. A destination may be known but with minimal preparation and not understanding how to efficiently get there will lead to a more expensive and unpredictable journey. Informed by each client’s unique character and vision, we follow a process that guides and inspires this journey.

What is our process for conducting feasibility studies?

Our process when studying the feasibility of a potential project begins with defining the goals for the project with the client. We pose questions, such as, “For what purpose is the site to be used?” and “How large are these uses?” There needs to be a clear picture of where the client wants to go with the project and a defined ideal outcome. We then determine how to get there in an efficient manner.

We start with gathering information pertaining to zoning for the site, precedents, and any trends in the market regarding design, use, constructability, history, and approval processes. This information is synthesized and considered as inputs when test-fitting the site with program layouts. We then generate a series of viable layouts based on this research and experience focusing on unit and common area efficiency. Then we analyze them against the vision and goals of the project. We also provide important data, such as unit counts or rentable square footage, that can be used for underwriting a development deal, used as input in a pro forma, or for a go/no-go decision.

This understanding of potential return on investment is especially useful during the due diligence period of acquiring property. Negotiations with city agencies and feedback from the community will inevitably impact the development; therefore, having a comprehensive understanding of the factors surrounding the project allow a client to make informed decisions.

Our clients are well-equipped with the knowledge of what they can and cannot commit to as a result of these early stage efforts.

What are the benefits of a feasibility study?

Our feasibility studies bring to the surface both quantitative and qualitative opportunities and constraints for a project. This early in-depth understanding leads to informed decision making which minimizes the risk of unexpected costs throughout the project.

The duration of a project should also be considered and we’re often looking to find opportunities to reduce the time needed to complete the project. We often bounce ideas off of our consultants and construction colleagues to consider smart alternatives for larger, high-cost building systems that can speed up construction. This effort leads to minimal value engineering during design, and reduced construction delays and improved document coordination later in the project.

We’ve selected a couple case studies to illustrate the benefits and value of conducting feasibility studies early in a project.

1943 Dot Ave

Our clients for this multifamily building had a strong initial vision for their project. They knew what they wanted to build on a complex, underutilized site but weren’t sure how much or what challenges it possessed regarding their vision. The site is urban but very deep (perpendicular to the street) with sloped topography that was less than ideal, and in a neighborhood of smaller scale residential buildings.

As a result of conducting an in-depth feasibility study, we discovered those key aspects unique to this site that would shape the development such as housing typology context, parking, accessibility, and emergency egress and balance them with the project goals. Therefore, during the initial design phases of the project, we were influenced by these constraints in a positive way. We were able to optimize the building with smaller, more efficient units and integrate more efficient construction techniques while creating a unique identity for our client’s project in an extremely competitive rental market. We were also able to increase the unit count by 20% and achieve an efficiency of 80% for the building. The feasibility study aided our team with city approvals and successfully navigating the design review process with BPDA.

30 Alleghany Street

For this project, our clients attempted to develop an old parking lot site as an apartment building years ago but came to us looking for an updated approach. We looked at a series of building types and layouts deciding to settle on an alternative apartment building layout that yielded twice as many units as their initial plan - a major upgrade.

Because we exhausted various building types in the feasibility study, we were able to efficiently revise the design when our client received pushback from the community on the height and density of the project with minimal impact to the developer’s return on investment. We utilized a duplex townhouse style instead of the apartment building and removed a floor reducing the density by over 30% while only losing 15% of the rentable area.

Furthermore, the townhouse building type is built per the residential building code which is less expensive than the apartment building type that follows the commercial building code. In the end, for this long-term owner the project will be built more quickly and for less cost than the original apartment building. The townhouse building is simpler to maintain and will be more flexible to convert from rental to condominiums at a later date if desired.

Interested in multifamily developments in your area? Discover how ThoughtCraft Architects create value for our developer clients through design by downloading this free resource: Designing Value in Multifamily Housing

The Value of a Feasibility Study