4.2 Acre Almost Ocean Front Property for Aution. How to Value it? Pacific Grove, CA
**Azul Bay1352 Lighthouse Ave**

11,200 SF Specialty Building, Pacific Grove, CA

[https://www.loopnet.com/Listing/1352-Lighthouse-Ave-Pacific-Grove-CA/23178359/](https://www.loopnet.com/Listing/1352-Lighthouse-Ave-Pacific-Grove-CA/23178359/)

This property is way out of my league. However, I am curious how an experienced developer would think about this property. I am not planning to research local regulation (like intended use, density requirements etc). Just throw your ideas, potential constraints to these ideas, how to value them, how to decide your maximum bid.

* 4.28-acre site with an 11,200-square-foot freestanding office
* about two blocks from ocean
* There is an old office building with significant amount of open unused spaces.

Thanks.
[{"id": "hrpw9wa", "text": "Residential if the city would allow it. Being in CA and that close to the ocean tho, I bet it would take 8+ years to get approvals.", "replies": [], "depth": 1}, {"id": "hrpzc9b", "text": "Last-mile/infill distribution center", "replies": [], "depth": 1}, {"id": "hrq0t49", "text": "IMO, land value based on current and, if potentially different, future entitlements. That\u2019s absolutely a redevelopment site. Existing structure is 70yrs old across from the ocean. Would be willing to bet damn near any physical work to the building would trigger a 7-figure renovation to current code. I would attribute virtually no value to the building as a developer. \n\nI\u2019d be nervous about environmental issues as well given the age.", "replies": [{"id": "hrqerpe", "text": "Enviro issues on an office building?", "replies": [{"id": "hrqktzp", "text": "Documented asbestos and lead paint.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hrqchg9", "text": "Redevelop it. Look at city\u2019s zoning map, make a call to a city planner, look for any master plans in the area and go from there. To value it your really looking at sales comps near there and talking to brokers. I\u2019d come up with a few different rough pro formas based on the above research that model each scenario/use. We do this at the shop I work at, as we have huge land inventory ripe for development and we have a commercial group that focuses on retail/industrial and a residential group that handles that world. Analysts will research fees and zoning from the city, collaborate, and come up with pro formas for each scenario before taking to comittee\n\nEdit: to value it we\u2019d throw a cap rate relevant to each use on the noi\u2019s from the pro formas and plug the land cost/deal value based on return metrics we\u2019re looking for.", "replies": [], "depth": 1}, {"id": "hrqmcqv", "text": "So the #1 \"potential constraint\" to this site is the California Coastal Commission, or more specifically from the Loopnet zoning info: \"O\" Open Space (Located within the California Coastal Zone and governed by the provision of Pacific Grove\u2019s Local Coastal Program (LCP)\n\nI am not a California developer but last year I did a fairly deep dive into building townhomes near the beach down in Oceano. The coastal plan in general will severely restrict what you can do. But IMO even getting into the questions of could you exceed the existing footprint, could you build higher etc are moot. The property is zoned Open Space in the LCP. It would be a really long road to change that zoning, and likely would not succeed. You would need local political support, and even then if someone who governs the LCP has a hair up their ass, forget about it.\n\nIt is a really cool site, though.\n\nIf someone on here has succeeded in doing a zoning change (or development in general) in a hostile LCP, I would be interested in hearing about the experience.\n\nUnfortunately this property type is not well suited to an auction IMO.", "replies": [], "depth": 1}, {"id": "hrr738g", "text": "You can value it based on its highest and best use or how much it would cost to rebuild the same structure plus land value", "replies": [], "depth": 1}]