Exit Strategies for Developers: Selling in Phases or as a Whole Project?

When a developer builds a real estate project in an exceptional area such as Yenişehir on both sides of the Istanbul Canal, it is not enough to think only about the construction and marketing stage. A developer must also have a clear Exit Strategy: when, how, and to whom the project or its parts will be sold, how to achieve optimal profit, and how to minimize risks.

The most prominent exit options are:

• Selling the entire project in one transaction.

• Selling the project in phases.

• Dividing sales according to sections or individual units.

Below, at Go Smart, we provide a detailed analysis of these two strategies, with their advantages, disadvantages, and decision-making criteria.

First: What Do We Mean by “Selling the Entire Project” and “Selling in Phases”?

• Selling the Entire Project (One-time Sale / Bulk Sale): The developer sells the whole project (buildings, facilities, serviced land) to an investor or a group of investors in one go, usually before or after completion.

• Selling in Phases (Phased Sale / Unit-by-Unit / Sectional Sale): The developer sells the project’s units or sections gradually, often according to construction phases (e.g., first phase sold first, then the second, and so on), or by selling apartments/villas/shops individually or in smaller groups.

Second: Advantages and Disadvantages of Each Strategy

Selling the Entire Project

Advantages:

• Large sudden liquidity: receive a big lump sum, reducing ongoing financial risks of construction and marketing.

• Simplified management: no need to deal with individual buyers, deliveries, or follow-ups.

• Reduced exposure to long-term market fluctuations: the price is almost fixed upfront.

• Most construction risks are already resolved if sold post-completion or near completion.

Disadvantages:

• The total price may be lower compared to selling units individually (especially if market prices rise during construction).

• Negotiation risk: large investors may demand discounts, guarantees, or phased handovers.

• Difficulty finding one buyer with the full financial capacity.

• If the project is in its early stages, it might be undervalued compared to its future worth.

Selling in Phases

Advantages:

• Gradual cash inflows can finance later construction phases, reducing the need for external funding.

• Ability to benefit from rising property prices over time.

• Higher flexibility to adjust designs, features, and pricing according to market response.

• Wider pool of buyers instead of depending on one large investor.

Disadvantages:

• More complex management: multiple sales, deliveries, and guarantees.

• Market risks (rising costs of materials, labor, or inflation) between phases.

• Risk of delayed sales if infrastructure or facilities do not develop as expected.

• Longer marketing and operating costs affecting cash flow.

Third: Decision-Making Criteria – How Should a Developer Choose?

• Cash Flow and Financing:
  Do you have enough capital to fund the entire project until completion without heavy reliance on loans?
  What are the costs of financing if construction extends over a long period?

• Market Demand and Price Forecasts:
  What is the current demand in Yenişehir and the canal region? Are buyers ready now or waiting for infrastructure completion?
  Are property prices expected to rise significantly in the coming years? If yes, phased sales may offer better profitability.

• Risk and Time Management:
  How much time are you willing to spend between construction start and final sale?
  Are you prepared for multiple marketing and sales operations?
  Or would you prefer to exit quickly and reduce exposure to risks such as rising input and labor costs?

• Profitability vs. Risk:
  Compare expected profits in early full-sale vs phased sales, considering potential price increases alongside added risks and costs.
  Sensitivity analysis: what happens if demand decreases or costs rise?

Fourth: Special Considerations for Yenişehir and Canal Istanbul

• Large-scale infrastructure projects like the Istanbul Canal: These add long-term value to surrounding land and increase expected demand.

• Rising demand for housing and commercial units: As Yenişehir develops as an expansion of Istanbul, demand drives land and property values higher over time.

Fifth: Suggested Scenarios

Scenario 1: Large Residential Project on Canal Istanbul

• Reality: A developer can either offer it to a large investor (institution, real estate fund) or sell units gradually to individual buyers.

• Best for Full Sale: When quick liquidity is needed, financing costs are high, or regulatory risks are significant.

• Best for Phased Sale: When the developer can finance and wait for better prices, when demand is steady, or when selling to individuals widens the buyer base.

Scenario 2: Mixed-Use Project (Residential + Commercial + Public Facilities)

• Reality: Full sale may simplify legal and licensing procedures and attract investors seeking an integrated project.

• Best for Full Sale: If the developer wants to finalize administrative/licensing risks at once, or needs liquidity for other projects.

• Best for Phased Sale: If commercial components can be sold first at good rates, or if facilities generate ongoing income during the residential completion.

Go Smart Real Estate Recommendations

At Go Smart Real Estate, we strongly recommend consulting with professional experts before choosing an exit strategy. A detailed feasibility study, financial analysis, and careful timing are key. Monitoring the market closely is also essential.

Our specialized team at Go Smart operates in Yenişehir and Canal Istanbul, offering the best advice for buying, selling, and investing in Turkey’s real estate market.

For more details, contact us directly.