Buying Commercial Property in Southwest Florida: Land Use Due Diligence

By: Jeff Wright, Esq.

A commercial property may appear to check every box. The location is right, the building seems to work, and the price makes sense. The property offers good visibility, steady traffic and an abundance of nearby residential rooftops.

You may already be imagining your business operating there or planning how to redevelop the property. Before buying commercial property in Southwest Florida, however, there are other important questions to ask, including:

“Can you use the property the way you intend?”

The existing use may provide some clues. But the answer may depend on much more than what is currently operating on the property or what appears to be happening on neighboring parcels.

Land use due diligence can help buyers identify zoning restrictions, future land use limitations, development conditions, and other issues (e.g., grandfathering and vested rights) before they become potentially expensive and debilitating surprises after closing.

Does the Zoning Allow Your Intended Use?

One of the first steps when evaluating commercial property is confirming its zoning and determining whether the buyer’s intended use is permitted. A property being marketed as “commercial” does not necessarily mean every commercial use is allowed.

A restaurant, medical office, retail store, warehouse, professional office, self-storage facility, or other business use may have special requirements under applicable land development regulations. Some uses may be permitted by right, while others may require additional approvals. Buyers should also consider whether the existing use was legally established and whether there are any issues involving nonconforming uses or structures.

Florida law broadly defines “land development regulations” to include local zoning, rezoning, subdivision, building construction and sign regulations. It can also include local  administrative codes, and other regulations controlling the development of land. In addition to zoning, buyers need to determine whether applicable regulations allow their planned use.

What Is the Property’s Future Land Use Designation?

Zoning is only part of the analysis. Florida local governments adopt comprehensive plans that guide development, and a property’s future land use designation can affect the types of uses, densities, and intensities that may be permitted.

Under Florida Statute § 163.3194, development undertaken by governmental agencies and actions involving development orders must be consistent with the applicable adopted comprehensive plan. All zoning, and all local land use regulations, must be consistent with the local government’s comprehensive plan.

That distinction becomes particularly important when a buyer plans to expand, redevelop, increase intensity, or otherwise substantially change the use of commercial property. A proposed project may require a rezoning, comprehensive plan amendment, or other land use approvals before the buyer’s plans can move forward.

Understanding these issues during due diligence allows a buyer to evaluate the potential time, cost, and uncertainty involved before committing to a property.

What Existing Development Approvals Affect the Property?

Commercial property may be subject to approvals and conditions that are not obvious from visiting the site. Depending on the property, those may include zoning approvals, development orders, site plans, variances, special exceptions, vacated interests, deviations, or other conditions imposed through prior land use proceedings and approvals.

Those approvals can affect how a property may be used or redeveloped. A buyer considering an existing shopping center, office property, or other commercial development should understand the approvals governing the property rather than assuming the existing improvements tell the entire story.

This review can be particularly important for properties within planned developments. Buyers should determine what was originally approved, what conditions or limitations accompanied that approval, and whether subsequent amendments changed the development rights associated with the property. Both Lee County and Collier County, for example, maintain land use applications and development approval resources for matters ranging from comprehensive plan amendments to planned development changes and nonconforming uses.

It is also important to determine whether a buyer’s proposed changes, including planned uses on a site, could trigger additional governmental review or require modification of an existing approval.

Will the Parking and Site Requirements Work for Your Business?

Parking can become a significant issue when the use of commercial property changes. A building that has adequate parking for one type of business may not satisfy the requirements for another.  A new use may generate different requirements for parking, loading, circulation, or accessibility, among others.

For example, converting an existing space to a restaurant or another higher-intensity use may create site requirements that were not an issue for the previous tenant or owner. A buyer may find that the building works perfectly, but the site cannot accommodate the parking or circulation needed for the proposed use.

Land use due diligence should therefore consider how the buyer intends to use the property, rather than relying solely on how it functions today. This can also include review of local land development codes, along with any site-specific approvals that may apply to the property.

Does the Property Have the Access You Need?

A commercial parcel can have excellent road frontage without necessarily having the access a buyer expects. Existing driveway locations, shared access arrangements, easements, medians, turn restrictions and transportation requirements can all affect how customers, employees, delivery vehicles, or service providers reach the property.

Access can become particularly important when a buyer plans to redevelop a site or intensify its use. Before closing, buyers should understand both the legal and practical access to the property and whether their proposed project could require changes or additional approvals.

A location that looks ideal from the road may function very differently once you understand its access limitations. Depending on the property, evaluating access may require reviewing existing development approvals, recorded easements and applicable county or state transportation requirements.

What Signage Will Be Allowed?

Signage is easy to overlook during a commercial real estate transaction, but it can be critical to a business’s success. A buyer may assume that a prominent monument sign, building sign, or other signage can be installed because neighboring businesses have similar signs.

Florida’s Community Planning Act specifically requires local land development regulations under Florida Statute § 163.3202 to regulate signage as part of implementing the local comprehensive plan. Local requirements can affect the size, location, height, number of signs, and type of signage allowed on a particular property.

Existing signs also do not necessarily establish what a new owner or business will be permitted to install. If visibility is important to the proposed business, signage should be investigated during due diligence rather than after the property has been purchased. Sign permitting history, planned changes in sign copy, and grandfathering should be included in such an investigation.

Are There Environmental or Site Constraints?

Southwest Florida properties can present environmental and site-development considerations that buyers should evaluate early. Wetlands, protected habitat, stormwater requirements, flood conditions, preserve requirements, and other environmental considerations can affect where and how a property can be developed.

These considerations are also part of Florida’s land use framework. Florida Statute §163.3202 requires local land development regulations to address areas subject to flooding, drainage, and stormwater management and the protection of environmentally sensitive lands designated in the comprehensive plan.

The acreage shown in a listing does not necessarily represent the amount of land available for development. A parcel may contain environmental or physical constraints that reduce its buildable or usable areas, or require additional permitting, mitigation, or design considerations.

Depending on the property and the buyer’s plans, environmental consultants, engineers, planners, and other professionals may need to be involved in the due diligence process. Identifying these issues early can help a buyer determine whether the proposed project is feasible and whether the purchase price makes sense given those limitations.

Could Pending Land Use Changes Affect the Property?

Land use regulations are not static. Comprehensive plans, zoning regulations, development standards, and local ordinances evolve over time, particularly in a growing region such as Southwest Florida.

Buyers should consider whether pending land use or regulatory changes could affect the property or surrounding area. It can also be helpful to understand what might be proposed for nearby properties because future development can affect access, traffic, compatibility, and the long-term character of an area. Land use due diligence should therefore look beyond the boundaries of the property. What happens around a site can affect both its future development potential and its value.

When Should Land Use Due Diligence Begin?

Ideally, land use due diligence should begin early enough to identify potential problems before the buyer’s contractual due diligence period expires. Discovering after closing that a desired use requires rezoning, additional parking, different access, or significant infrastructure improvements puts the buyer in a much different position.

Early review can help identify whether additional approvals may be needed and allow the buyer to consider those requirements when evaluating the transaction. For some properties, the analysis may be relatively straightforward. For others, land use counsel may work with real estate attorneys, planners, engineers, environmental consultants, and other professionals to evaluate whether the buyer’s plans are feasible.

The more significant the planned change to the property is, the more important it is to understand the land use implications before the transaction is complete.

The Bottom Line

Buying commercial property in Southwest Florida requires looking beyond the building, location, and purchase price. Zoning, future land use, existing development approvals, parking, access, signage, utilities, and environmental conditions can all affect whether a property will work for its intended purpose.

Land use due diligence gives buyers an opportunity to identify those issues while they can still be evaluated as part of the transaction. The goal is to understand what exists on the property today, what approvals already govern it, and what will be required to use or develop the property as planned.

If you are considering the purchase, development, or redevelopment of commercial property in Southwest Florida and have questions about zoning, land use, or development approvals, I may be reached at jeff.wright@henlaw.com.