Why Contract Management Matters in Commercial Real Estate Development

By: MA Sadik, Commercial Real Estate Intern 2025

In commercial real estate development, securing a contract is a major milestone—but it’s only the beginning. The real work, and the true test of a project’s success, lies in the intricate process of contract management. This phase is fraught with potential obstacles, from zoning delays and permitting issues to unforeseen site conditions. Navigating these challenges while maintaining a positive and productive relationship with the seller is paramount.

Successful outcomes hinge on a delicate balance of time, process, and relationships, with collaboration, transparency, and adaptability being the cornerstones. At M Square
Commercial, we understand that this requires a combination of technical expertise and interpersonal finesse.

 

The Art of Contract Management: Essential Skills for Success

Managing a property under contract is a multifaceted discipline that extends far beyond legal and financial acumen. It’s about proactive problem-solving, meticulous attention to detail, and, most importantly, clear and consistent communication. Here are the core competencies every successful contract manager should possess:

  • Clear Communication: This is the most critical skill of all. The ability to
    communicate clearly, concisely, and transparently with all stakeholders is the
    foundation of a successful project. This includes regular updates (e.g., weekly
    check-ins, milestone reviews) and documenting all agreements in writing to
    avoid disputes.
  • Financial Acumen & Risk Assessment: A deep understanding of the project’s
    financial underpinnings is non-negotiable. This involves analyzing costs,
    forecasting revenues, and assessing the financial implications of any changes or
    delays. It also means proactively identifying potential bottlenecks (permits,
    financing, design changes) and having contingency plans for common delays,
    like supply chain issues.
  • Time Management: Staying on track with contractual deadlines while
    allowing space for problem-solving is crucial. Using project management
    tools to track deadlines and prioritizing critical path items can prevent
    cascading delays.
  • Negotiation & Problem-Solving Ability: Negotiation is an ongoing process.
    As the project evolves, you’ll need to negotiate contract changes, address
    disputes, and find mutually agreeable solutions to unforeseen problems. This
    requires quickly assessing roadblocks and developing workable alternatives.
  • Attention to Detail and Organization: Real estate contracts are complex
    legal documents. A keen eye for detail is crucial for ensuring all parties
    adhere to the agreement, that deadlines are met, and that all
    documentation is in order. A centralized system for managing contracts and
    timelines is a game-changer.
  • Relationship Management: Maintaining trust and goodwill is essential to
    foster cooperation when unexpected issues arise.

 

Working with Your Seller: A Collaborative Approach to Overcoming Obstacles

The relationship with the seller is a delicate one, particularly when the unexpected occurs. The key is to approach the relationship as a partnership, with both parties working towards a common goal.

  1. Establish Open Communication and Align Expectations Early: From the
    moment the contract is signed, agree on how and when updates will be shared.
    Define roles, responsibilities, and timelines clearly within the contract and agree
    on a dispute resolution process upfront. Putting key dates in a shared calendar
    keeps everyone aligned.
  2. Frame Challenges as Shared Problems: When a development obstacle
    arises, approach the seller as a partner, not an opponent. Frame the issue as
    something “we” need to solve, rather than placing blame. For example, if
    zoning delays occur, the buyer and seller could jointly engage local officials.
  3. Be Transparent About Timelines and Trustworthy in Your Dealings:
    Sellers have their own pressures. If an obstacle will affect the closing timeline,
    communicate it immediately along with proposed solutions (e.g., extending
    closing, modifying contingencies). Share progress reports and financial
    updates openly to build trust.
  4. Maintain a Solutions-Oriented Mindset and Be Flexible: Tough
    conversations are easier when you consistently focus on the shared goal:
    getting to closing. Avoid blame and instead focus on solutions, such as using value engineering to cut
    costs. Be open to flexibility in renegotiating terms, like extensions, when justified.
  5. Document Everything: If you and the seller agree to modifications, put
    them in writing. This protects both sides and avoids confusion later.

 

Managing Time and Process as the Buyer

  1. Strict Adherence to Milestones: Break the project into phases with clear
    deadlines. Monitor the seller’s performance without micromanaging and, even
    while resolving issues, continue making progress on other aspects of the
    deal—like title work or financing—to show commitment and maintain momentum.
  2. Leverage Expertise: Involve attorneys, architects, or third-party consultants
    early in the process. Use due diligence periods effectively to uncover and
    address risks before they become major problems.
  3. Protect Your Interests: While collaboration is key, it’s also important to protect
    your investment. Include clauses for termination or penalties if obligations aren’t
    met. This allows you to protect your interests while still working to preserve the
    relationship.

 

Conclusion

Successful contract management balances firmness with partnership. A buyer who
manages the process efficiently while building a cooperative relationship with the seller
is better equipped to navigate development challenges without derailing the deal. By
viewing challenges as shared hurdles, not adversarial roadblocks, both parties can work
together to achieve a smooth closing.

At M Square Commercial, we guide clients through every stage of the contract
process, ensuring that timelines, communication, and relationships work in
harmony. Whether you’re a first-time buyer or an experienced developer, the way
you work with your seller during obstacles often determines whether your project
moves forward—or falls apart.