Monthly Archives: May 2016

What Is Involved in Developing a Vacant Lot in California?


As with any commercial real estate (CRE) deal, there is a lot to consider prior to and during development of a vacant lot. Much of the information is concerned with financial or legal technicalities, but California also has a lot of environmental regulations and code to follow as well. INCO Commercial is committed to helping every step of the way, from finding the appropriately located vacant lot to match your needs, to helping complete all of the required paperwork, and ensuring everything is to code as development proceeds. Our affiliated company, IMC Municipal Consulting also provides advisory services and assistance in project development, including site selection, economic incentives, development assistance, financing, and more.

INCO Commercial can provide assistance throughout the entire process, but here are some things to consider for development of a vacant lot.

Land Availability and Purpose of Development

Because good land is typically expensive and in demand, INCO Commercial will do what we need to find the best property at the right price that will match your financial plan and development goals. Lots in or approaching bigger cities come at a higher premium. If your budget is more limited, you may want to keep your options open. Zoning requirements or usage restrictions, as well as municipality and community plans can also factor into your choice of location.


If the property is large, you’ll likely want to divide it into smaller lots to develop or sell, which can be more affordable for prospective buyers. Subdivision involves separating a plot of land into multiple distinct legal entities, otherwise known as “platting.” Gaining subdivision approval is part of the entitlement process. In California, there are common restrictions when it comes to subdividing property. For example, the property may have existing restrictions as part of the purchase deal, or the city/county may require that your project align with their community planning goals. Additionally, there may be requirements on the size of the property to allow for subdivision, and of course, zoning regulations must be met as well. INCO Commercial can help guide you through the requirements and reviews necessary for considering subdividing a property.


Once you go through the process for approval to develop a lot, your land is now considered “entitled.” There is even a ‘pre-entitlement’ process, which examines the preliminary designs, architectural plans, engineering, noise & air qualities, and fiscal reports.  California actually has one of the most detailed and complicated entitlements process in the nation. The entitlement process in California is broken down into three separate processes, including meeting the requirements set forth by environmental and local codes, review by courts and local governments, and finally a citizen and community-based initiatives process. Though these processes may seem strict and arduous, California has developed these for the best interest in protecting environmentally sensitive land for our future.

Types of Zoning Limits.

There are often three major types of zoning: residence, commercial and industrial. Each zone is subdivided into categories with its own rules, for instance, yard size for houses, building height and so on. Other zoning laws protect certain areas from being developed such as historical sites, coastal spots, and potential flood regions. Keep in mind that if your development project does not fall within city guidelines, a rezoning is required, and in California, a city council review is also required. Public participation is also mandatory for commercial development, as even one minor change in the community can have a wide-ranging impact on local businesses and residences.

Density Bonus

If you’re thinking of developing land for apartments, senior or child care facilities, the density bonus is something you might want to consider before you choose a lot. Normally, the local land use laws often dictate how big a structure can be built, as well as the size of any “residential units.” A density bonus is something of a workaround for such laws, offering developers compensation for putting up affordable housing for low-income families or seniors, and for building around mass transit systems. The caveat with building affordable housing in order to be granted the density bonus is that the affordability must be maintained over a minimum time frame of thirty years.

California Environmental Quality Act (CEQA)

Again, CRE in California can be unique due to the state’s attention to the environment. Developers here must comply with the California Environmental Quality Act. The law requires that any direct physical change or an indirect change that would affect the environment must undergo an environmental review, and depending on the potential effects, may require another review and even a plan for mitigation if the effects are severe enough. INCO’s partner firm IMC Municipal Consulting can play a key role in helping guide you through these types of requirements and regulations.

INCO Commercial and our affiliates, IMC Municipal Consulting and CORE Property Management are dedicated to assisting our clients and maximizing their success. We work closely with each of our clients to assess and evaluate their goals to ensure the properties we find are best suited for the investment. Please visit our contact page for the office that can best serve you!

What Is Involved in Developing a Vacant Lot in California?2018-12-19T12:43:40-08:00

From LBBJ: Demand for Retail Space Remains Strong


An article released by The Long Beach Business Journal discusses the strength in the current retail space market, despite closures from big-box retailers in the community. The article also features an interview with INCO Commercial’s own principal and board member, Douglas Shea.

Closures from retail giants Sports Authority and Sports Chalet have left some uncertain about the market for retail space. However, Shea reassures that the current low interest rates have been driving an upward momentum in commercial real estate that will likely continue throughout the year. The demand for ‘shop spaces’ typically ranging from 1,500-3,000 SF are doing especially well, as new entrepreneurs are taking advantage of those low interest rates.

Retail spaces larger than 10,000 SF are the ones facing more difficulty in filling vacancies. Brian Russell, Vice President of Coldwell Banker Commercial BLAIR WESTMAC predicts that with the closures of Sports Authority and Sports Chalet, other sports retailers will benefit and strengthen their footing in the market. Shea even suggests those retailers may expand to those vacant stores, noting that the demand for brick-and-mortar sports retail stores is still significant. For the time being, Russell proposes a furniture store would do well in the larger vacant retail spaces in Long Beach.

Both Shea and Russell agree if the low interest rates and current climate continues, the positive trends and momentum will prevail. Yet, the proposed 1% Long Beach sales tax increase on the June ballot may threaten the upward trends, as well as continued rental rate increases on retailers and restaurateurs.

Still, new developments and major retail projects provide encouragement as they get underway throughout Long Beach. Most notable is the planned 250,000 SF of retail space on the currently vacant lot next to Long Beach Airport slated for ‘airport-themed’ development. Burnham USA Equities, Inc., which purchased the land, is expecting to break ground next year. Additionally, a new 241-room hotel is also planned for the site by Nexus Development, with construction beginning as early as July of this year.

Overall, the Long Beach area promises a strong outlook for retail shops and commercial real estate investors, who can capitalize on the low interest rates and local market conditions.

Read the full-length article by clicking on the link below.

Despite More Big Box Store Closures, Demand For Retail Space Strong

From LBBJ: Demand for Retail Space Remains Strong2018-12-19T12:43:40-08:00

The Benefits to Investing in a Multi-Family Commercial Property


For those of you new to investing in commercial real estate, or just looking to expand your portfolio, a multi-family commercial property is a solid investment with a great potential in amassing capital.

INCO Commercial is one of the leading companies in commercial real estate serving the Long Beach, Irvine, and Riverside areas. We are committed to the best interests of our clients and will work closely together every step of the way. If you’re considering investing in a multi-family commercial property, here are some benefits to consider on this kind of investment. First, we’ll explain what qualifies as a commercial multi-family property.

What is a Commercial Multi-Family Property?

To qualify as a commercial real estate property, a multi-family residential must have 5+ dwellings (units). Multi-family buildings are different by location (urban or suburban) and size of construction. Garden apartments are multi-family apartment buildings with three floors or fewer; mid/high-rise are multi-family buildings with four floors or higher.

Benefits of a Multi-Family Property Investment

Greater Cash Flow
Cash flow on a multi-family residential unit is greater than a single-family for obvious reasons: there are more tenants paying rent. Bigger apartment buildings are less influenced by any single vacancy; the more units and thus, tenants you have, the less risk you carry. With a single-family residential, one vacancy means you’re losing out on 100% of rental income. In a multi-family property, the loss from one vacancy is only a percentage of the total income, and other tenants are still contributing to covering the operating costs.

More Expensive, but Easier to Finance
The total cost of purchasing commercial real estate, including multi-family properties is higher, but lenders sometimes favor financing these types of property. This is because multi-family properties generate a much stronger cash flow month to month, therefore banks are sometimes more likely to approve the loan than with a single-family residential as they might perceive the risk on those loans defaulting to be less.

Easier Management, Whether it’s You or a Hired Management Team
With all of the properties in one location, managing a multi-family commercial property can many times be easier than managing several single family units spread out. Not only does this include managing tenants, but overseeing maintenance, employees, etc.

Because of the increased cash flow, you may be able to hire a team to manage your property, which in a large-scale apartment complex might be worth it to you. The management team can supervise the property, manage the maintenance crew, take phone calls, and even handle audits, rent, and much more.

INCO Commercial’s affiliate, CORE Property Management specializes in managing commercial and industrial properties, whether you need a full team, or just some assistance in a few areas. With CORE Property Management, you can rest assured that everything will be handled within the local, state, and federal regulations and other best practices. For a complete list of services provided, find out more about CORE Property Management.

A dedicated management team can allow for less stress on your end, and more time to manage other investments or projects you may have on the table.

Excellent Appreciation
The appreciation of a multi-family commercial property can depend on several factors, but many of those factors can be within your control. Although the base cost is usually higher on this kind of property, you will usually see a greater benefit in appreciation than with a single-family residential. By maintaining the property in top condition and making some improvements over time, you can add value to the property to increase the return on your investment. This means more equity for you if you choose to sell it down the line. Our expert agents at INCO Commercial can work with you to evaluate how to maximize the value of your property, and even help determine when it would be appropriate to make improvements and adjust rents.

High Demand
In Southern California, the demand to rent is not going away any time soon. In fact, rents, home sales, and home prices are expected to rise throughout 2016 in Los Angeles County alone. People will always need a place to live, and with rising home prices, many people will continue to rent since they cannot afford to buy. With our local expertise, INCO Commercial agents can help project which properties would have the best potential and match your business interests.

Investing in commercial real estate has historically proven to be a sound strategy for increasing personal wealth. It is also a way to take an active role and have more control over your investments as opposed to the stock market or other types of investments. Working with INCO Commercial also offers peace of mind, knowing that our 40+ years of industry experience and intimate local knowledge of the commercial real estate market will be working on your side.

Learn more about our agents, or go to our contact page and contact the office which would best serve you. Discover our other services and affiliates associated with INCO Commercial, or explore the other types of properties our company specializes in. We look forward to working with you!

The Benefits to Investing in a Multi-Family Commercial Property2018-12-19T12:43:40-08:00