One aspect of the commercial real estate brokerage industry that is often overlooked is the site selection and acquisition process. This is the basis of all development and is sometimes relegated to the classic phrasing “location, location, location”, and while physical location is an essential piece of any good development, it’s only piece of the pie. Although a site may be well located, there can be innumerable issues only discoverable in a developer’s due diligence process. To do this, those of us who assist in site acquisition and development must know what to look for and why some, seemingly ideal locations, might never make sense. Remember, just because you’re at “main and main” does not mean the site will work.
- Zoning. One of the first steps a potential developer should take into account is zoning. Obviously, a zoned site is best; however, in many instances a revised outdated zoning ordinance is advertised or listed online. If a site looks like it might work, we recommend reaching out to local planning authorities to ensure nothing has changed, and that there are no existing or proposed development moratoriums that might be a hindrance to your development. Zoning isn’t always as clear cut as it may seem.
- Wetlands. Remember, a site might look dry when you walk it, drive by, or look at an aerial; however, in many instances, an owner may not know a portion of their site could lie in protected wetlands, flood plains, or other waterways. It’s essential to know how much of a site is buildable from the begging, and if any portion might be protected. Even in areas where there might be no visible water on, or adjacent to a site, it is not uncommon for protected wetlands to surprise a buyer late in the process. Check early to avoid costly errors or fines, or worst-case-scenario: find yourself stuck with a site that isn’t buildable.
- Traffic Studies. If you’re looking at a larger development, typically for retail, residential, or industrial, it is not uncommon that you will be required to submit a traffic study as part of your development proposal for a city/county. It can be a major time drain if a municipality requires certain aspects of the traffic to be included. Be on the lookout for nearby seasonal institutions such as schools and universities, as a project started in the summer, may not be able to include “school traffic” until a time when said school is back in session. This can add weeks or even months to a timeline, and often will not sit well with a seller.
- Access. Getting into and out of your development is essential. Understanding how the public will reach the site can make a huge difference in the site’s success. Most new developments will require input from the state’s Department of Transportation, or city engineers. Sometimes this is as simple as a yes or no, but in some cases, it can be a far more intensive and time-consuming process. It’s not always a given that a site can be accessed the way it is marketed without exorbitant cost to a developer, if it’s possible at all.
- Historical Sites. One thing that many developers do not consider is who may have called a particular site home in the past, or what significance a site might hold in history. Although this is less of an issue in more developed urban areas, it can still come as surprise to developers to find out that a site holds significance historically. Often this is only discovered late into a development process, when artifacts are discovered during site work, or new information is made public. Remember, in many municipalities the simple discovery of a historical artifact must be disclosed, and can require further investigation if deemed necessary. This can require significant time to research, and may even require site-work by trained professionals, all while construction and development must be halted.
When considering a site for development it’s essential to take everything into account: traffic counts, demographics, lease/sale comps, population growth, etc. but you must also work to get below the surface as quickly as possible. Having a great team is key in any development, and getting that team to the table early and often is just as important. Remember, it’s rare that a development project will go as smoothly as originally planned, but with proper planning and an expert team, the number of issues faced can be significantly reduced.
For all of your southeastern site selection/acquisition needs, contact me at [email protected] or call at (205) 913-5915.
