Top 5 Challenges of New Development in Lake Havasu
The Lake Havasu area is becoming a popular market for CRE investing and new development projects. Part of it is investors looking to capitalize on Lake Havasu tourism, but there is much more. The city has a growing permanent population and is in an excellent location for other commercial ventures.
But what are some challenges facing new development in Lake Havasu? This post explores what investors and developers need to know.
Key Challenges of New Development in Lake Havasu
Navigating Local Regulations
Developers will need to manage local zoning ordinances and regulations no matter where they are. Lake Havasu City is no different. The city enforces detailed zoning ordinances, with residential, mixed-use, and special-purpose classifications. Each has limitations on the types of development the city allows within the zone. Developers also face various restrictions concerning building height, setbacks, lot coverage, parking, and landscaping. Thorough due diligence before acquiring property is essential to avoid costly surprises and ensure compliance.
Shifting Market Dynamics
The Lake Havasu area has unique market dynamics. Even if you’ve succeeded with projects in other places, you must adapt to the local market. While the area’s strong tourism drives demand for hospitality, retail, and entertainment, demand fluctuates. However, the area is also experiencing significant growth in the permanent population. There are opportunities for diverse developments with year-round appeal. As a result, we’re seeing more mixed-use development in the Lake Havasu area.
Environmental Protections
Environmental regulations play a significant role in commercial development near Lake Havasu. The city prioritizes protecting its natural landscape, so developers face strict requirements. The local government and residents want to preserve the lake since it is a major economic driver. Developers must follow the Lake Havasu City Stormwater Management Program, ensuring proper drainage and runoff control. Additional environmental concerns may also exist, depending on location and project scope.
Financing and Interest Rates
Securing financing for commercial projects near Lake Havasu City presents unique challenges. National lenders won’t be as familiar with the local market, so projects may face greater scrutiny. High interest rates can also impact developers’ finances. However, government-backed programs like SBA loans might offer a path to easier, more affordable financing. There may also be various incentives for different types of development projects. Developers building subdivisions, condos, or apartments may also need to consider the financial viability of potential buyers.
Construction and Labor Issues
Investors and developers may experience various construction-related challenges while working near Lake Havasu. The construction industry faces increases in material costs that many expect to persist. High demand for construction labor could add costs to the project. The area’s extreme summer heat can also limit working hours at times. Developers must also contend with permits and approval processes, which can result in delays or added costs.
Are you ready to invest in Lake Havasu commercial real estate? The team from Shuffler Commercial Real Estate is ready to help. We have the local expertise to advise investors, developers, and businesses in the Lake Havasu area. Reach out now to learn more about our services.
