What You Can Do With It

In recent years, our inventory has steadily added a growing number of redevelopment and land listings, both in urban and rural locations. Some of these are vacant lots and older properties in areas of town primed for repurposing along major corridors. Others are old ranches, Ag facilities or large acreage parcels in the countryside, many of which include varying levels of either outdated or unpermitted improvements. 

As a result, we have found ourselves increasingly involved with properties whose values are largely driven by the constraints, policies and incentives brought about by the government powers at the national, state and local level. 

With one, we are on the verge of closing escrow in the Harvey West neighborhood on a property that had to be seller-financed with a seller holdback and a bond to guarantee remediation of environmental conditions which precluded the buyer being able to get an institutional loan. With another, we are nearing the end of Phase 2 testing on a mixed-use property in Salinas where both the buyer and seller are awaiting the results to help determine whether the lender will allow them to proceed with the sale as planned.

In the case of our listing of a longtime local landmark we represent in Aptos, the buyer is pursuing an updated use permit while facing parallel challenges of navigating the building’s physical condition and historic designation, while an eminent domain dispute edges towards settlement between the owner and the SCRTC to determine the availability of parking for proposed operations and future development.

For two longtime commercial listings in our inventory of older buildings, recent changes in policy and designation may have breathed new life into properties which we have long struggled to find a buyer for:

In the case of an office building we have listed in Soquel, discussions with the County indicate recent changes in policy, allowing increased residential use on certain commercially zoned properties. This may enable the owner to convert their main building back into a residence which would greatly improve its earning potential and thereby its value.

And for our longtime listing of an older retail/warehouse building in Watsonville, we recently learned the property’s district is getting reclassified as an Opportunity Zone in January, which should help attract outside investment money to the area and make it more likely for our client to get his targeted price at last.

In another instance, on a recent foray into the mountains touring multiple off-grid properties served by dirt roads, I helped a client review multiple opportunities which can likely never be legally developed, but which trade nonetheless amongst a population who put in their improvements at the risk of being shut down if the structures and systems they install ever end up on the County’s radar. As you might expect, these deals often involve seller financing and sell for a lot less than they would if they could get permits or access to utilities.

As is so often the case, the value of a property often doesn’t have so much to do with what meets the eye, but rather what you or your interested parties can ultimately do with it, either now or in the future.