The real estate market over the last 10 years has gone in only one direction: up. The commercial, office and industrial real estate markets have grown the same.

Increasing government regulation is limiting the supply of ground. Sewer tap fees in the $3,000 to $5,000 range were once things that we made jokes of in our local market place. Today, these are commonplace in central Pennsylvania.

In order to be a winner in this monopoly land game and to be the successful buyer of that boardwalk property, one has to search a little deeper, work a little harder, and be a little smarter.

Over the years, we have found that to be successful in the acquisition of prime properties within the metro area one has to develop unique approaches.

In 1996, Bill Gladstone approached us with a 16.5 acre piece of ground in Lower Paxton Township zoned R-1, low density. The property did not have any availability to sewer or water and was encumbered by a PP&L tower and easement. In addition, this ground abutted the interstate 83 and 81 split. The property simply had no significant marketability for a residential community.

With the surrounding marketplace existing of office buildings and a for rent multi-family community, an alternative use looked appropriate. Especially with the high visibility from the highway, a commercial application made more sense. By structuring the acquisition of the ground on a no contingency basis, the seller was willing to dispose of the property at a price that warranted the effort to attempt a rezoning. If the rezoning failed, the residual value of the ground as a single building lot was sufficient to cover most of the upfront costs.

We attempted the first rezoning in 1996. Unfortunately, the political pressure was too great from surrounding residents and it was turned down.

In 1998, a second attempt at the rezoning was made. Additional information with the significant tax benefits generated from a commercial office structure helped support the request. But again, even with Dauphin County Planning Commission recommendations for approval, the rezoning request was narrowly turned down.

Finally, in 1999 after working closely with the Township Supervisors and addressing all of their concerns along with the positive financial impacts of an office park development on the township’s tax base, the rezoning request was approved to permit the development of approximately 150,000 square feet of office space in two buildings.

After the rezoning approval, the development process began. A sewage extension agreement had to be negotiated and purchased at a cost of approximately $40,000 from a neighboring property owner out of Boston.

Upon completion of our survey, we found that the 16.5 acres was really 16 and that the I-81 highway fence encroached 50 feet onto our property line. Working with PennDot to approve the movement of this fence proved to be a very time consuming and pain staking process.

Today I am pleased to say that we have started construction of the second building at the Crums Mill Office Park. Leasing has gone well and the property has proved to be financially rewarding.

However, to get to this point, a unique approach to the property had to be employed. Multiple attempts at rezoning eventually yielded a positive result. Patience in dealing with an out of state developer and PennDot cleared up all of the title and utility issues that turned other developers away.

The bottom line is quite simple: successful development is not done on the theory of “build it and they will come.” It is through astute market analysis, careful financial planning and the development of a high quality product that meets the consumer’s demands that produces success.

Is there any more land? Yes. Is it easily developed? No. It is the careful developer with patience and a willingness to break the traditional paradigms that will succeed in today’s marketplace.

Copyright 2005 BillGladsone.com. All Rights Reserved.

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