The first consideration with zoning is that it permits you to lease to, or own and operate, the kind of business that plans to use the property. The value of the zoning is its legality or appropriateness for the use it is intended and vice versa.
In addition to appropriate zoning for the use, the value of the property also is related to its desirability to the kind of business which will use the property or, if you are an owner-user, the business which will subsequently lease or buy the property from you when you no longer operate your business at that location. For instance, with a warehouse, is there sufficient ingress and egress for the type of vehicle which will be delivering materials to and from the business? Is there sufficient power for the business? Are the ceilings high enough? Does the zoning permit warehouse storage but also permit light or heavy manufacturing? Is there sufficient parking for the employees and customers? How close is the property to main city arterials and freeways? If there is manufacturing, is there sufficient water? Is there sufficient office space? What kind of cooling is available? Lighting? Does the business need for part of the warehouse to be a showroom?
No matter the use, a commercial property's value increases with the amount of profit an investor is able to derive from leasing it to a tenant whose business is appropriate for the zoning: tenant rent-(expenses +mortgage payment) = cash flow or profit. Or how much profit an owner is able to derive from selling it to another. Or a combination of both. Lease and hold for a period of time, then sell.
Nov 18, 2010