How Much Land Do You Need (New Commercial Building)

Question

I'm looking for guidance on how much land you need for a new single-story commercial building.

Through some light research, the general rule I seem to find is about 5x your building size. So a 5,000 sqft building would be adequate on a 25,000 sqft plot of land. Is this a good rule of thumb?

Alex Huang · Answer

Thanks!

Ronald Rohde · Answer

You can look up local ordinance and code online. They will have precise numbers for parking space, definitions of parking space sizes, handicap access, etc. You'll also need to look up setbacks which reduce buildable sqft, easements, etc.

Joel Owens · Answer

How much time do you have? Are you a physician? There are books out there from NAIOP and ICSC. Generally you would use a consultant or local fee developer who has the team in place and helps you through the process. There is a lot involved to it and lot's of moving parts.

Alex Huang · Answer

Thanks Joel.

Can you recommend any good resources to figure these types of things out?

The building would be for a general physician's office, so the only thing that I would really need is some parking spaces for staff and patients.

Joel Owens · Answer

It varies by asset type, air rights, density zoning laws, and parking ratios required.

Some developers are ultra conservative with size of building and still see if numbers work. You do not want a project predicated on a high sq ft per size of land and spend all the money to find out it is not possible. Now you have a deal that is too tight and you lose your investment costs so far and walk away to the next project.

It's kind of like house builders. They might apply for zoning for 300 houses but really only require 250 to be greatly profitable. They know county or city will likely push back on density. If they get 300 houses anyways icing on the cake.

How Much Land Do You Need (New Commercial Building)

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