When evaluating commercial real estate, it can be easy to focus on the building that sits on a property today. But sometimes the real value lies in what the property could become tomorrow.
The recent sale of 501, 553 & 557 Park Avenue in Hershey, Pennsylvania is a good example.
The Bill Gladstone Group recently completed the sale of these three contiguous parcels in Derry Township. Together, the properties total approximately 0.62 acres, or 27,007 square feet, with approximately 180 feet of frontage along Park Avenue.
Beyond the transaction itself, the property highlights several factors that commercial buyers and property owners should consider when evaluating land: location, visibility, zoning, assemblage and future potential.
In Commercial Real Estate, Location Is About More Than an Address
“Location, location, location” may be one of the oldest sayings in real estate, but what makes a location valuable depends on the property and its intended use.
For commercial land, buyers may consider traffic patterns, visibility, accessibility, nearby businesses, surrounding development and proximity to major destinations.
The Park Avenue properties sit in a well-traveled Hershey corridor near Hersheypark. In fact, the property listing noted visibility from Hersheypark’s Lightning Racer.
That type of exposure can be especially valuable for retail, service and other commercial users that benefit from being easy to find.
The lesson for property owners is simple: don’t market only the land. Market the location.
Understanding what surrounds a property and why businesses or investors may value that position can be an important part of developing the right marketing strategy.
Three Parcels Can Create One Larger Opportunity
Another interesting aspect of this transaction was the configuration of the property.
Rather than marketing a single parcel, the offering combined three contiguous properties, each approximately 60 feet by 150 feet. Together, they created approximately 0.62 acres with 180 feet of Park Avenue frontage.
That illustrates an important concept in commercial real estate: sometimes the whole can offer more possibilities than the individual pieces.
Adjacent parcels may allow a buyer to consider a larger footprint, different site configuration, improved access or a redevelopment plan that wouldn’t be practical on a smaller individual lot.
For property owners, this is one reason it can be worthwhile to understand neighboring parcels and the broader area around a property before deciding how to bring it to market.
Zoning Can Expand a Property’s Potential
Location may get a buyer’s attention, but zoning can determine what they can actually do with the property.
The Park Avenue site is within the Hershey Mixed Use zoning district and Overlay 8 Compact Development. The property’s listing identified potential uses including business and professional offices, financial institutions, certain food-service uses, personal services, retail and others.
Derry Township’s zoning materials similarly provide for a variety of commercial uses within the Hershey Mixed Use district and its overlays.
That flexibility matters.
A property that can potentially accommodate multiple uses may appeal to a broader range of buyers than one with a very narrow set of options.
Of course, buyers should always perform their own zoning and land-development due diligence before purchasing a property. Zoning ordinances can change, and a permitted use doesn’t necessarily mean a particular development plan will automatically be approved. Derry Township maintains its current zoning ordinances, maps and development resources for property owners and developers.
Sometimes Buyers Need to Look Beyond What’s There Today
The three Park Avenue parcels contained existing residential structures, but the offering was positioned as a commercial land opportunity. The listing specifically noted that demolition of the homes would be the buyer’s responsibility.
That’s an important distinction.
Commercial buyers frequently evaluate a property differently than someone purchasing a home. An existing structure may have value, but it can also be secondary to the underlying land, zoning, frontage and redevelopment potential.
Instead of asking only, “What is this property today?” a commercial buyer may ask:
“What could this site support in the future?”
That change in perspective can reveal opportunities that aren’t immediately obvious from simply looking at the existing improvements.
Flexibility Can Create a Larger Buyer Pool
When selling commercial property, owners sometimes have a specific future use in mind.
But the eventual buyer may see something completely different.
That’s why understanding and communicating a property’s flexibility can be so important. A site that could potentially work for an office user, retailer, service business or another permitted commercial concept gives the market more ways to envision its future.
Derry Township’s broader planning vision also emphasizes compact and mixed-use development, including access to shops, services and employment opportunities.
For sellers, the goal isn’t necessarily to decide what a buyer should do with a property. It’s to give qualified buyers enough information to recognize what may be possible.
A Successful Sale Starts With Understanding What You’re Really Selling
The sale of 501, 553 & 557 Park Avenue is a useful reminder that commercial land is about much more than acreage.
In this case, the offering combined three contiguous parcels, substantial Park Avenue frontage, a recognizable Hershey location and zoning that allows for a variety of potential commercial uses.
Those characteristics help tell the property’s story.
For commercial property owners, identifying that story is an important part of preparing for a sale. What makes the location valuable? What does the zoning allow? Could adjoining parcels create additional opportunities? What type of buyer is most likely to recognize the property’s potential?
Answering those questions can help determine how a property should be positioned and marketed.
The Bill Gladstone Group works with commercial property owners, buyers, landlords and tenants throughout Central Pennsylvania to evaluate opportunities and develop strategies based on both current market conditions and long-term objectives.
Considering selling commercial property or land in Central Pennsylvania? Start with a conversation about what your property could be worth and how it should be positioned in today’s market.
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