Many feel that the commercial real estate market will recover before residential – primarily because of the severity of the housing market’s problems – not due to any saving grace of the commercial sector.  And this recent Reuters article is the latest in a string of good news I have been hearing to add weight to this belief.



http://www.reuters.com/article/bondsNews/idUSN1430571420090814



The sooner money becomes more accessible, the sooner more transactions can occur.  More transactions mean more points of reference for investors and more confidence in the valuation of properties and real estate.



And in fact, I am hearing from developers who feel the time to capitalize on this opportunity is near.



It can take 2 and 3 years for any significant  real estate development project to go from land acquisition to completed sellable product.  Developers understand this long lead time and are looking for signs of turnarounds not just in their local areas but in any part of the US.  The rationale is that even if their local market is slow to bounce back, 2 or 3 years will provide ample time to “catch up” to the leading areas of the country.



So a green light in California, may be all that is needed to spur development in other parts of the U.S. as well.





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The county where my office is located, Brevard County, Florida just announced a moratorium on transportation impact fees. The reason – to help stimulate the local economy. Or in the official language of the new ordinance,

… the Brevard County Board of County Commissioners has determined that putting its citizens back to work is a high priority for every level of government, including county government; and …

… the County Commission has determined that the removal of certain regulatory and economic impediments to new commercial development is one way in which County government can join the State and Federal government in strategies designed to stimulate the local economy…

This is a big deal. My firm is often involved with property developers who are forced to pay transportation impact fees that exceed $1 million dollars.

Reducing the cost of a project by that amount is no laughing matter, and it would certainly make some projects financially feasible that weren’t doable without the savings.

If that is the case, maybe Brevard County will succeed in “putting its citizens back to work”.

Do you have land development projects in your area where the waiving of impact fees would make them profitable? If so, and even if not, you might want to let your local government agencies know about what other counties are doing to spur growth.

Cities and Counties are much more willing to adopt changes when they know others have done it as well. A simple letter or email linking them to Brevard Counties website may be enough to save your next project tens of thousands of dollars. (Here is the link, http://www.brevardcounty.us/landdevelopment/).

But please remember, just because it may make your property developments cheaper to build, that doesn’t mean there is now demand for what you are building. Do your research first.

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It seems nearly every city in every state is aggressively trying to grow in size these days. This can often be a golden opportunity for your property development project.

City’s are looking to grow in size by annexing land for one simple reason – tax revenue. Every parcel that is acquired or annexed by a city increases its tax base and tax revenue. It is a simple way for cities to pay for thier constantly growing services and budgets.

As a property developer, when you conduct your due diligence, it is a good idea to be aware of what cities and towns may be in close proximity to your parcel. If another city is nearby your property, you should definitely evaluate what annexation could do to the value of the raw land and the final developed project.

Through annexation your property may be able to acquire;

• a higher density zoning or even a complete change in land use
• access to beneficial services like water, sewer, mass transit, fire and rescue, or snow removal
• possible change in school districts or added leverage to initiate a change in school districts
• tax incentives (normally for large parcels and developments)

Consider these scenarios.

1. You find a piece of vacant land that does not have water and sewer available nearby and is thus priced accordingly. You put the property under contract and then talk with the nearby city to arrange for annexation and the construction of a sewer line via a fair share agreement. Before you even close on the property you have increased its value significantly.

2. You are under contract to purchase 35 acres for the new property development of a high density commercial and retail center (complete with a big box anchor store and major hotel chain.) While running through your due diligence checklist it becomes clear that the city’s water line does not have the capacity to serve the entire site. However, the adjacent city has water service nearby that does have capacity. Rather than walk away from the project, you pursue annexation and obtain the water concurrency needed for your development.

3. You pursue rezoning of your property to allow for a higher density mix use development but are denied. However, the adjacent city’s planning and zoning board is much more in tune with your development vision and would be in favor of the project if the property was within their jurisdiction. You go through the annexation and rezoning process simultaneously (which is the norm) and get the zoning you need for your development.

It pays to explore all your options when developing property. This is often where the real profits are found. So add annexation to your due diligence checklist. It could bring your property development much bigger profits if you do.

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