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Key Reasons to Consider Future Development and Expansion When Buying a Commercial Building
While touring commercial buildings with a business owner in a small rural area, we observed the activeconstruction of a nearby Wawa. Curious, Iasked the cooperative broker assisting us if the county wasexperiencing a growth surge. The answer revealed more than I expected: not only was the area undergoingsignificant growth, but a strategic rezoning initiative was also underway. This effort included repurposingexisting buildings, adding new amenities, and expanding fiber infrastructure in preparation for larger-scaledevelopments like hotels and big-box chain stores.For my customer, who already saw existing business-to-business (B2B) potential in the area, this contextadded substantial “value add” factors to his decision-making process. Beyond a market analysis, evaluatingfuture development and expansion opportunities is crucial when purchasing a commercial property. Beloware some key factorsto consider:
1. Local Zoning Regulations
Understanding the zoning laws for your target property is critical. These regulations dictate what types ofbusinesses or developments can operate in the area. Before making a purchase, ensure the property alignswith your intended use or has the potential for rezoning to meet future needs.2. City Planning InitiativesInvestigate local city planning initiatives such as new road construction, transit lines, or communitydevelopment projects.Significant projectslike Jacksonville, Florida’sTransportation Authorityefforts to helpimplement part ofthe stateautonomousmobilestrategy.Thesetypes ofinitiativesmaysignificantlyimpactonbusinessesnearby amenities,property values andopportunities. Propertiesnear improved infrastructureor revitalized areas often benefit from increased customer traffic and accessibilitytoo
2. City Planning Initiatives
Investigate local city planning initiatives such as new road construction, transit lines, or community development projects. Significant projects like Jacksonville, Florida’s Transportation Authority efforts to help implement part of the state autonomous mobile strategy. These types of initiatives may significantly impact on businesses nearby amenities, property values and opportunities. Properties near improved infrastructure or revitalized areas often benefit from increased customer traffic and accessibility too.
3. Surrounding Development
Monitor nearby residential and commercial developments. New housing projects, schools, or shopping centers can drive more foot traffic and economic activity to your property. Additionally, infrastructure improvements like expanded fiber networks or upgraded utilities can make your building more appealing to tenants or buyers in the future.
4.Risk
Assess potential risks that could affect the long-term value of your investment. Consider whether the area is prone to natural disasters, such as floods or hurricanes, and research its economic stability. Understanding these risks helps you make informed decisions and plan for contingencies.
5.Conclusion
When buying a commercial building, focusing solely on the present value can limit your potential for future growth. Considering factors like zoning regulations, city planning, surrounding development, and risk mitigation ensures that your investment is not only profitable today but poised for success tomorrow. By aligning your purchase with the trajectory of local development and expansion, you position yourself to capitalize on emerging opportunities and long-term market trends.
Jonyce Brown
Certified Commercial Advisor Designee
Maison Capital | Brokered by SVR Commercial