Purchased Commercial Plot and Need Guidance on Best Use Case
Hello, 

I purchased about 3 acres of commercially zoned land. I was intending on building for my own business, but due to time constraints I've entered in a long-term lease and no longer have a need to build for my own business. 

Now it's going to purely be investment properties. So, I'm trying to figure out "best use" case. 

I can build somewhere around 30k-40k sqft of warehouse (single story). This number goes up if the building(s) are partial office. I'm not sure if I should be doing a single large building, 3 buildings that are \~10k sqft, or 6 buildings that are \~5k sqft. 

I assume the answer is going to be highly dependent on location -- along with risk tolerance/work involved in managing the property. 

Is there somebody I'm able to hire on a flat rate or hourly rate to help me figure this out? I often see plots of land that are resold with plans attached at a markup, I assume this is exactly what those analysts do; I just don't know what their job title is. I'm sure CRE would know this as well, but to my knowledge they only work on percentages.
[{"id": "j1amaru", "text": "I\u2019d assume any local commercial broker could do this for you. But it would also probably include a contract to market the land for you and try to get those tenants. CBRE, JLL definitely, I\u2019m sure there are other local smaller firms around you. \n\n\u2026.if you\u2019re in the Southwest PA market my company can help.", "replies": [{"id": "j1amk7d", "text": "I'm familiar with cbre and jll. It's just not enough work to prematurely sign such a contract for, regardless of brokerage.", "replies": [{"id": "j1amtz4", "text": "You don\u2019t really \u201cpay\u201d for it. It\u2019s wrapped into the sale like it would be for a house. \n\nYou can also maybe buy Sketch Up and make something yourself.", "replies": [], "depth": 3}, {"id": "j1ax61r", "text": "Honestly if you call local brokerages they are going to tell you something as basic as what they see as the highest and best use for the property for free in the hopes that you hire them to either A) Lease or B) Sell it.\n\nYou could also try for a development consultant.\n\nIf you are planning to do Industrial your going to spend a lot less per square foot to build larger buildings all at once rather than a bunch of smaller ones so that might be something to think about.  \n\n3 acres isn't that large for many types of commercial property so office building probably wont make any economical sense unless you find like DaVita, bank, or something like that to take the whole space.\n\nYou can also potentially do a ground lease deal and just clip your coupon for 30-50years.", "replies": [{"id": "j1aym9s", "text": "\"Development consultant\" is probably the exact job title I'm looking for! ty \n\nYeah the plan was to go industrial. A complex I was in previously had multiple 10k sqft buildings that could be divided in half. Seems like a lot of demand for that range of space, and funnily I felt like you capture a lot of excess value on TI improvements and early termination deals because a lot of these businesses end up out-growing the space in under 3 years. At least, me and 2 others did out of 8 tenants. \n\nThe complex ended up selling for \\~10mm around 3 years after it was built and fully leased. Based on multiple people I've spoken with, the entire project cost under 5mm, probably closer to 3-4mm", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "j1arl2n", "text": "Sounds like you're looking for a development consultant, most brokers can assist in the process as well, but might not have the best insight as development/construction is not their core business.\n\nThe plots you mentioned going up for sale are typically entitled with arch/engineered plans, basically they get it through the entitlement phase with the city and then sell it at a premium because the project is shovel ready. A project with just an unentitled concept isn't worth much more than the land value itself.\n\nDepending on your area, if you're interested in a JV type scenario, we could be open to it. If that's not what you're looking for, I'd look at 4 different areas to help guide you through the process.\n\n1 - Development Consultant and or Broker - to help optimize the concept\n\n2 - Analyst - Determine the feasibility &amp; risk/return scenarios, in today's environment, a lot of projects simply aren't going to pencil well, and a lot of lenders are tightening their purse strings on what they're willing to lend and lend on.\n\n3 - Design/build firm - If you've not built your own warehousing before, you'll want someone who can take the entitlement, design, and construction off your hands. It's more expensive, but likely the easiest way for someone who's not familiar with CRE dev/construction.\n\n4 - Broker/PM - unless you've got the connections and time to lease these things up, a good broker is worth their cost. They can help provide insight into what market rents are for your feasibility study as well.\n\nIf all you're looking for though is someone to help with the site-plan/design for an hourly rate, I'd imagine you could find someone on upwork for that. I've used it for that before, but I already knew what I needed. If you want to spend more money, any CRE architect can help you out with the site plan and concept, usually at no upfront cost as long as they end up with the arch contract for the build.", "replies": [{"id": "j1at88v", "text": "Thanks for the advice! What's a JV?", "replies": [{"id": "j1atpul", "text": "Joint Venture", "replies": [{"id": "j1awcod", "text": "hm, possibly", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "j1aukwc", "text": "How do you know you can build 30-40k sf?\n\nYou\u2019re looking for a feasibility study.  To do that the correct way out of the gate you\u2019d need a civil engineer to work up a development profile factoring in all of the site constraints and capability based on your local governing jurisdictions.\n\nHigher end or corporate Civils will typically package a price based on your scope and needs/wants, smaller firms or singles may do it on an hourly rate.", "replies": [{"id": "j1awa0x", "text": "We're past that stage. Already have an architect on board who's looked into local laws and spoken to the city. \n\nWe know that because I already had plans drawn and approved. However, since it's no longer for my own business and now an investment project I have to completely change how I approach it.", "replies": [], "depth": 2}], "depth": 1}, {"id": "j1awwzr", "text": "Having an architect is a great first step. You may need the approval to expire before pursuing something else. Find a developer or Civil Engineer that you can hire hourly or do a joint venture with. Best of luck", "replies": [], "depth": 1}, {"id": "j1bp4uj", "text": "Careful with entitlements, when you conceive of a misguided project then nobody is going to want to inherit your bad plans or untangle what you did wrong to suit their own business sense.  A good example, i know brothers who got entitled on a project in a hot area, but they only factored in 10 units, then wanted a price that commanded more units for the next party to make money. They also started demolition. Anyone going in needed to start over with new designs and get the city to extend the entitlement.  One strategy is just to sell it with plans but not full entitlement, so it\u2019s only partway through the process, and show preliminary approval that it can be a certain number of units. \n\nArchitects or contractors are usually who you hire. Brokers would need to be experienced in development to be worthwhile.", "replies": [{"id": "j1bqnaq", "text": "hey, sorry I'm not understanding the post. What's an entitlement?", "replies": [{"id": "j1bunmb", "text": "When the city approves you, they entitle you to develop. I think you would be too dependent k. the person you hired to do this.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "j1bqia3", "text": "Get a Level C market analysis Highest and Best Use study (HBU) done by (preferably) an MAI appraiser. It\u2019s what they\u2019ve been trained to do and can present the data backing up their opinion of the best use of the land. Go to appraisalinstitute.com and look up MAI appraisers in your state to contact. Best of luck", "replies": [{"id": "j1bqlu5", "text": "literally exactly what I was looking for. \n\nW post W person. thx friend", "replies": [{"id": "j1brrfc", "text": "NP! Im a certified general appraiser going through the MAI program right now and Level C analysis is what we are trained to do and have to do as part of our capstone course. MAI\u2019s have to go through alot of training especially for these types of scenarios\u2026", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "j1d8xb3", "text": "1. Find potential best use\n2. Put in the infrastructure (water, sewer, power, etc.\n3. Wait 10 years\n4. Sell and repeat", "replies": [], "depth": 1}]