If you are an investor in the real estate market, you may be familiar with the term zoning.  Before leasing or buying a commercial real estate asset, investors are advised to ensure that property is zoned in a way that will resonate with their future goals and needs. For those unfamiliar with what zoning is, it is the process of segmenting and designating land to various uses. It also involves regulating other elements that are critical to real estate such as design, height, and density in some places.

Commercial zoning includes ordinances that regulate commercial structures such as shopping centers, apartment buildings, and office parks, among others.  The purpose of zoning is to specify what type of businesses can reside in a given area, the type of building that can be erected, and how it will be utilized. The zoning bylaws and regulations vary from one state or city to the next.  When buying a property, you should make sure that you are abreast with the updated zoning by laws for any given location in order to avoid future disappointments.

Impacts of Zoning on Your Property

When zoning is changed from one type of property to the next, it can impact your real estate investment. For example if a property is changed from commercial to residential zoning, the value of your property will plummet and lead to massive losses. However, if the reverse happens, the value of the property may increase dramatically. Additionally, banks and lenders may also have some policies which don’t favor the kind of loan you want to acquire when zoning a property. At times the municipality or state can institute a conditional zoning requirement, which can either affect your property either positively or negatively.

Understanding the impacts zoning regulations will affect your transaction can help you make an informed decision. You also need to know the steps to follow if you want to rezone the property.

The Process of Rezoning a Property

At times, investors may feel the need to rezone their properties. They need to understand what steps to follow in order to complete this potentially detailed process.  In the state of Georgia, most of the zoning decisions are handled locally.

The Zoning Ordinance in Georgia requires that you attend three meetings before you submit a Special Use Permit or Rezoning Application.

The first meeting involves the property owner or representative, and a member(s) of the Planning and Zoning Department. Here you will discuss the rezoning process, make your application, and review it together. You’ll have to explain the intended use of the property and the plan you have in place to achieve this. The Planning and Zoning Department will then determine whether your project is consistent with the area’s comprehensive plan.

Next is to attend the preliminary review meeting with the Plan Approval team. Here, you’ll discuss how new development regulations may affect the project. You’ll try to uncover significant technical hurdles and cost items.

The third step is the Community and Input Meeting, which involves the surrounding property owners and interested parties. Here, you’ll seek to know how your neighbors feel about your application.

Once the three meetings are complete, all county departments will review your application to determine whether it is feasible. They will also seek to understand if the project aligns with state and county ordinances.  If the form is complete, it will be placed on the agenda for the upcoming Planning Commission Public Hearing. The application will then be publicized so that interested parties can attend the hearing.

During the public hearing, the Planning Commission will allow the public to make their inputs, after which they’ll send a recommendation to the Board of Commissioners. The board will evaluate the proposals and act accordingly, either by approving, approving with conditions, postponing, or disapproving the application.

Should You Rezone Your Commercial Property Before Listing?

Rezoning a property can be a lucrative experience for property investors. However, it is never a smart idea to rezone a property before listing if it’s based on rumor and speculation. This is because the whole process is expensive and time-consuming. Additionally, if your plan doesn’t meet zoning requirements, it might slow down the process of actually selling your property.

However, if you conduct a thorough due diligence in your research and feel confident that rezoning will lead to a more profitable outcome, you may wish to proceed with it.

Zoning Considerations When Buying a Commercial Property  

When buying a commercial property, you need to examine the current zoning of your potential investment carefully. It would be best if you identify what uses are deemed to be acceptable and unacceptable. Be sure to survey the surrounding properties and seek to know how other property owners in the region intend to use theirs in the coming years. You may identify a property that enjoys scenic views of the sunset, only to learn later that space in between is zoned for storied, heavy metal industry.

You also need to check out design and overlay restrictions. Properties on floodplains and swamps can have limitations. The presence of endangered species or anthropological sites near the property can also have strict regulations put in place to discourage property development.

Also, consider all aspects relating to the future of the area where your property is located. Visualize the property in the next 10 years. Is the city planning to build a highway behind your property? Or a fire department on the lot next door? If so, how will these changes affect your property? Though some of these things are hard to predict with certainty, an area’s Comprehensive Plan may provide a few insights about future development activities.

We Can Help

Obviously there are many factors to consider when investing in commercial real estate and the details and processes can seem overwhelming. We can assist you through every step of the way and have a proven track record of helping investors realize their dream. The Meridian Real Estate Group is a full service commercial real estate team. We service all of the main divisions of commercial real estate including Office, Industrial, Retail, Multifamily, and Land. We are experts in the process of land assemblage for large commercial land development projects as well. Let us assist you in finding commercial property for lease for your business or finding tenants to lease your existing commercial property. Our mission is to provide the highest level of service for all of our commercial clients and to aid investors in finding properties and negotiating deals to build a lasting commercial real estate legacy.

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