5.1 Land acquisition and site selection

Land acquisition and site selection are crucial steps in real estate development. Developers must carefully evaluate physical characteristics, market conditions, and infrastructure to find the ideal location. This process involves assessing factors like topography, soil conditions, and existing amenities.

Due diligence is essential before purchasing land. Developers conduct legal investigations, environmental assessments, and financial feasibility studies. They also navigate zoning regulations and consider how location and accessibility impact the project's success. These steps help minimize risks and maximize potential returns.

Site Selection Factors

Physical Site Characteristics

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• Topography shapes development potential and costs
  • Steep slopes increase construction complexity and expenses
  • Flat land simplifies building but may require more extensive drainage systems
• Soil conditions impact foundation design and construction methods
  • Clay soils may require specialized foundations to prevent settling
  • Rocky terrain increases excavation costs
• Environmental factors influence development feasibility
  • Wetlands protection limits buildable area
  • Flood zones necessitate elevated structures or flood mitigation measures
• Existing vegetation affects site preparation costs
  • Heavily wooded sites require extensive clearing
  • Open fields may need less preparation but lack natural buffers

Market and Economic Considerations

• Market analysis determines demand for proposed development type
  • Residential market studies assess housing needs and preferences
  • Commercial analysis evaluates retail gaps and office space demand
• Local economic conditions impact development viability
  • Employment rates influence housing demand and commercial space needs
  • Income levels affect the potential for luxury or affordable housing projects
• Industry presence shapes development opportunities
  • Tech hubs create demand for modern office spaces and high-end housing
  • Manufacturing centers may require industrial parks or workforce housing
• Demographic trends guide development decisions
  • Aging populations may increase demand for senior living facilities
  • Young professional influx could drive need for urban apartments and co-working spaces

Infrastructure and Amenities

• Existing utilities impact development costs and feasibility
  • Water and sewer capacity determines potential density
  • Electrical grid capacity affects industrial development possibilities
• Transportation networks influence site accessibility
  • Proximity to highways enhances commercial site potential
  • Public transit access increases residential density opportunities
• Public services availability affects development types
  • Quality schools drive demand for family-oriented housing
  • Emergency services coverage impacts insurance costs and marketability
• Proximity to amenities enhances property values
  • Parks and recreational facilities boost residential appeal
  • Shopping centers support mixed-use development potential

Due Diligence for Land Acquisition

Legal and Title Investigations

• Title searches verify property ownership and reveal encumbrances
  • Liens may indicate financial issues or unpaid taxes
  • Easements can limit development potential or require design accommodations
• Property surveys confirm boundaries and identify potential encroachments
  • Fence lines not matching legal boundaries may require neighbor negotiations
  • Discrepancies between deed descriptions and actual boundaries need resolution
• Deed restrictions impact allowable uses and development parameters
  • Homeowners association rules may limit commercial development in residential areas
  • Conservation easements can permanently restrict development rights

Environmental and Geotechnical Assessments

• Phase I Environmental Site Assessments identify potential contamination
  • Historical use as a gas station might indicate soil contamination
  • Nearby industrial sites could pose groundwater pollution risks
• Phase II assessments involve soil and groundwater testing if concerns arise
  • Soil borings can detect underground storage tanks or contaminated fill
  • Groundwater monitoring wells assess pollution plumes and migration
• Geotechnical investigations evaluate soil conditions for construction
  • Soil bearing capacity determines foundation design requirements
  • Presence of expansive soils may necessitate specialized foundation systems
• Geological hazard assessments identify risks like sinkholes or landslides
  • Karst topography increases sinkhole risk in limestone areas
  • Steep slopes may require extensive erosion control measures

Financial and Market Feasibility

• Pro forma analysis projects potential returns on investment
  • Development costs, including land acquisition and construction expenses
  • Projected revenues from sales or leases based on market conditions
• Cash flow projections assess long-term financial viability
  • Operating expenses, including maintenance and property management costs
  • Debt service coverage ratios for financing requirements
• Market studies validate demand for proposed development type
  • Absorption rates for similar properties in the area
  • Competitive analysis of existing and planned developments
• Infrastructure capacity assessments determine upgrade needs
  • Traffic impact studies may reveal necessary road improvements
  • Utility capacity analysis might identify required system expansions

Zoning and Land Use Regulations

Zoning Ordinances and Development Standards

• Allowable land uses dictate potential development types
  • Residential zones may permit single-family homes but prohibit apartments
  • Commercial zones often allow retail but restrict industrial uses
• Building height restrictions impact development intensity
  • Downtown areas may allow high-rise construction
  • Suburban zones often limit buildings to 2-3 stories
• Density regulations control units per acre or floor area ratios
  • Single-family zones might allow 4-6 units per acre
  • Mixed-use zones could permit higher densities of 20+ units per acre
• Setback requirements shape site layout and building footprints
  • Front yard setbacks create consistent streetscapes
  • Side yard setbacks provide space between buildings for light and air

Special Zoning Districts and Overlay Zones

• Historic districts impose additional design and preservation requirements
  • Exterior alterations may require approval from a historic commission
  • New construction must often match architectural styles of existing buildings
• Transit-oriented development zones encourage higher density near public transit
  • Reduced parking requirements near subway stations
  • Increased height allowances within walking distance of light rail stops
• Form-based codes focus on building form rather than specific uses
  • Street frontage requirements ensure active ground floors
  • Building envelope standards create consistent urban form
• Incentive zoning offers bonuses for providing community benefits
  • Density bonuses for including affordable housing units
  • Height increases for incorporating public plazas or green spaces

Zoning Flexibility and Variances

• Conditional use permits allow case-by-case approval of non-standard uses
  • Churches in residential zones might require conditional use approval
  • Large-scale retail in mixed-use areas may need special permitting
• Variances provide relief from specific zoning requirements
  • Lot size variances for irregularly shaped parcels
  • Setback variances to accommodate unique site constraints
• Planned Unit Developments (PUDs) offer flexible zoning for large projects
  • Mix of uses not typically allowed in standard zoning
  • Custom development standards tailored to project needs
• Rezoning processes allow changes to existing zoning designations
  • Public hearings and community input requirements
  • Consistency with comprehensive plans often required for approval

Location and Accessibility Impact

Transportation Network Connectivity

• Highway proximity enhances regional accessibility
  • Interchange locations create prime sites for regional shopping centers
  • Industrial parks benefit from easy truck access to major highways
• Public transit access increases development potential
  • Transit-oriented developments cluster high-density housing near stations
  • Office developments near light rail stops attract tenants seeking reduced parking needs
• Walkability improves local accessibility and property values
  • Mixed-use developments with internal street networks promote pedestrian activity
  • Sidewalk connectivity to nearby amenities enhances residential appeal
• Bike infrastructure supports alternative transportation options
  • Dedicated bike lanes increase commuting options for office developments
  • Bike share stations near multifamily housing attract younger demographics

Traffic Patterns and Site Access

• Traffic volume impacts commercial viability and residential desirability
  • High-traffic corridors suit retail development but may deter luxury housing
  • Low-traffic areas appeal to residential developers but limit commercial potential
• Ingress and egress points affect site functionality
  • Multiple access points reduce congestion for large commercial developments
  • Limited access in residential areas can enhance safety and reduce cut-through traffic
• Peak hour congestion influences development feasibility
  • Office parks may require staggered work hours to mitigate traffic impacts
  • Retail centers might focus on off-peak shopping times to avoid congestion
• Future transportation improvements shape long-term development potential
  • Planned highway expansions can increase site value for future development
  • Proposed transit lines may justify higher-density zoning in anticipation of improved access

Visibility and Market Exposure

• Street frontage visibility impacts commercial success
  • Corner lots command premium prices for retail development
  • Office buildings benefit from prominent signage opportunities on major thoroughfares
• Elevated sites offer marketing advantages for certain developments
  • Hotels on hilltops provide views and increased visibility
  • Residential developments with panoramic views command higher prices
• Natural and man-made barriers affect site exposure
  • Rivers or highways can create distinct market areas
  • Large industrial zones may limit residential development potential nearby
• Proximity to complementary developments enhances market synergy
  • Medical office buildings cluster near hospitals
  • Restaurants and entertainment venues support nearby hotel development