Rather than wait for the moribund housing market to rebound, some builders and developers are instead looking to rezone their land for other uses, such as retail, office or industrial uses. So how successful is this strategy? A story on BuilderOnline.com explains:
The single-family housing market has come to a grinding halt, with land now being sold for 10 percent or 20 percent of what it was once worth. Left with the choice of either accepting the lower price or holding the land indefinitely, many developers are drawn by the appeal of converting lots or selling them for some other use, particularly in light of the fact that the commercial and industrial sectors are foundering far less than their residential counterparts...
Unfortunately, no matter what the current or future use of land may be, a sale may never take place. In this economy, any kind of land deal is difficult...
Rezoning your residential property as commercial, office, or industrial use may look enticing-especially with growing government support...
1) Quantify Demand. Commercial and industrial uses may look appealing, but you need tenants.
2) Know the Competition. Even if there's demand in the area, there may be a backlog of supply at other business parks that will doom a transition.
3) Sign Tenants. The best way to ensure you have tenants when you open is to have them when you break ground.
4) Don't Count on the Chains. Just because you have land at good prices, it's not a given that major chains such as Home Depot will be interested.
2 comments:
It wouldn't seem that retail is an especially good direction with the way this economy is going.
They still grow strawberries in the middle of the downtown business district of Orange County California.
Down zoning back to AG use will at least generate cash flow.
http://maps.google.com/maps?f=q&hl=en&geocode=&q=orange+county+california&sll=33.68938,-117.91082&sspn=0.006561,0.009656&ie=UTF8&ll=33.690174,-117.911432&spn=0.006561,0.009656&t=k&z=17&iwloc=addr
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