overbuilding

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overbuilding

A situation that occurs when the rate of construction is faster than the market can absorb new construction.Developers often cannot anticipate the amount of competition until it is too late.The lead time between placing land under contract with a lengthy due diligence period to the first signs of excavation or construction that would alert people of new development can be as long as a year on small projects. The typical market cycle is a period of perceived need for “product”—offices,houses,malls,whatever—and then a seeming explosion of new projects “coming out of the ground”almost simultaneously.By the time developers see the signs of large numbers of competing projects,it is too late to back out of their own plans.As a result,all projects go full steam ahead and hope that something other than price will differentiate them from competitors, allowing the current project to fill up quickly while competitors go begging.This hope is usually misguided,and a price war results.

References in periodicals archive ?
Charter CEO Tom Rutledge agreed at the time to fulfill the requirement to overbuild, but said in a 2016 speech that he would only overbuild in areas where telephone companies-not cable companies-are the primary internet providers.
When I talked to the FCC, I said I can't overbuild another cable company, because then I could never buy it, because you always block those," Rutledge (http://www.
The company said that it will be rolling out the capacity overbuilds over the next six months with some segments ready for service by May 2010.
To date, only Verizon has said it will undertake an overbuild project, while BellSouth and SBC are taking a "wait and see" approach.
If you miss a local district by 1,500 kids, we could overbuild two elementary schools there,'' Tokofsky said.
Since then, it has used the Broadband Loop Carrier (BLC) to overbuild a legacy TDM-based facility, providing IP transport for a transparent local area network (LAN) service requested by a commercial subscriber in the area.
Allied Telesyn, a global provider of secure Ethernet/IP access solutions and an industry leader in the deployment of IP Triple Play networks over copper and fiber infrastructure, today announced that its IP Triple Play solution has been chosen by North Dakota Telephone Company (NDTC) for a multi-million dollar FTTx overbuild of its Devils Lake Exchange, which serves more than 3500 subscribers.
Phase One of the Devil's Lake overbuild will begin this summer and incorporate approximately 1000 lines.
Fort Wayne subsequently received a FTTP overbuild and Mayor Richard has recently unveiled an economic revitalization plan around the Verizon deployment.
This innovative architecture allows current GPON networks to be easily upgraded to provide higher bandwidth in the future, without billion dollar overbuilds or upgrades.