Selling or Leasing Commercial Property in Desert Hot Springs

Desert Hot Springs sits north of Palm Springs, apart from the string of cities along Highway 111. Two things shape its commercial property more than anything else: its natural hot mineral water and its early decision to allow commercial cannabis. The result is a market with spa and hospitality property alongside light industrial buildings that operate under specific permit requirements. Owners deciding whether to sell or lease here can ask us for an introduction to a commercial broker who knows this mix.

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What sets Desert Hot Springs apart

Two aquifers. Desert Hot Springs sits on hot and cold mineral water aquifers. The Mission Creek Fault separates the hot aquifer, which supplies the city's spas, from the cold one. The local economy has long depended on spa resorts built around the hot water.

Early cannabis cultivation. The city was the first in Southern California to legalize medical marijuana cultivation. CNBC reported it as the first California city to permit commercial cultivation, in 2014.

Zoning rules for cannabis facilities. According to the city:

• every cannabis facility requires a conditional use permit and all required public hearings, permits, and approvals;
• cannabis cultivation facilities are permitted only in the Light Industrial zoning district; and
• cannabis sales facilities (dispensaries) are permitted only in commercial zoning districts.

The city's cannabis pages also mention a separate regulatory permit. The Planning Department's published number is (760) 329-6411.

A long spa history. Desert Hot Springs became a tourist destination in the 1950s for its small spa and boutique hotels. Many of these have been renovated since the late 1990s, and most spas are owner-operated. For an owner, that means the likely buyer or tenant for a spa property may be an operator as well as an investor. For planning, the city publishes a basic zoning map and its planning application forms online.

Commercial property types in Desert Hot Springs

• Light industrial buildings, including those built or converted for permitted cannabis cultivation
• Spa, boutique hotel, and hospitality property that uses the hot-water aquifer
• Commercial storefronts, including dispensary locations where zoning and permits allow
• Neighborhood retail and service commercial
• Vacant land in industrial or commercial zones

Related: industrial and warehouse, investment properties, commercial land.

Selling considerations

• Permits may not transfer the way you expect. A building's value for cannabis use may depend on the conditional use permit and regulatory permit attached to it, and on whether a buyer can get or take over those approvals. This is a legal question. Have counsel review the permit status before you market the property. We can't advise on cannabis law.
• Two buyer pools for industrial property. A Light Industrial building may appeal to cannabis operators and to ordinary industrial users. A broker who can reach both may get you a broader response.
• Selling a spa or hospitality property. For buyers of spa or hospitality property, the hot mineral water is often central. Have documentation of your water source and its permitting ready, along with operating history.
• Confirm zoning first. Check the city's basic zoning map and Planning Department before you describe allowed uses to buyers.

Leasing considerations

• Tenant permitting. A cannabis tenant needs its own approvals. Plan your lease timeline around the permit process, and get legal advice on lease terms that depend on approvals.
• Commercial-zone retail. Dispensaries are limited to commercial zones, so retail space in those zones may get specialized inquiries. A broker can help you assess tenant quality and creditworthiness.
• Hospitality operators. Spa operators may look for properties with access to the hot-water aquifer. A leasing broker can help you present that.

Nearby areas

Desert Hot Springs is north of Palm Springs and Cathedral City. Owners with property in unincorporated Thousand Palms, where Riverside County handles planning, may work with the same west-valley brokers.

Get matched with a Desert Hot Springs commercial broker

Send us the property's location, its zoning if you know it, any permits attached to it, and your goal: a sale or a lease. With your permission, we introduce you to a commercial broker who can discuss your property and representation options. An inquiry does not create a representation agreement. Any brokerage services are provided by the receiving broker.

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Desert Hot Springs owner FAQ

Where is cannabis cultivation allowed in Desert Hot Springs?

According to the city, cannabis cultivation facilities are permitted only in the Light Industrial zoning district, with a conditional use permit and the other required approvals. Confirm current rules with the city's Planning Department.

Can you help me sell a cannabis-permitted building?

We can introduce you to a commercial broker. Questions about permits, licensing, and compliance should go to qualified legal counsel.

Do you match owners of spa or hotel property?

Yes. Tell us about the property and its water source, and we'll look for a broker with relevant experience.

More on selling commercial property or leasing commercial property in the Coachella Valley.

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