Selling or Ground Leasing Commercial Land in the Coachella Valley

Buyers of vacant land are buying what they can build there. In the Coachella Valley, a parcel's potential can depend on a city or county plan, a habitat conservation plan, an airport compatibility zone, regional impact fees, and sometimes on whether the land is held in trust. Knowing which of these apply to your parcel before you market it tends to make for a smoother process.

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What shapes land value here

• Where growth is planned.
• Rancho Mirage's general plan expects most future development near I-10. It describes the Regional Interstate Commercial area as one of the city's largest blocks of vacant commercial land as of 2016.
• In Thousand Palms, the county's plan describes large vacant parcels near the freeway that are suited to commercial, office, and tourist uses.
• Rezoning.
• The proposed Coachella Airport Business Park in Coachella would change zoning from Heavy Industrial to Manufacturing-Service.
• The county approved a change to Light Industrial for the Majestic Thousand Palms project.
• Habitat conservation. Local agencies adopted the Coachella Valley Multiple Species Habitat Conservation Plan (CVMSHCP) in 2007 and 2008. CVAG's fee estimator covers both the Transportation Uniform Mitigation Fee and a Local Development Mitigation Fee, which is administered by the Coachella Valley Conservation Commission.
• Airports. Land near Bermuda Dunes Airport falls under Riverside County airport compatibility zones that can limit intensity and height. Palm Springs International Airport lists shovel-ready land for aviation and non-aviation development.
• Tribal trust land. Parts of Palm Springs, Cathedral City, and Rancho Mirage are on the Agua Caliente reservation. The Bureau of Indian Affairs approves leases of trust land, and those leases can't exceed 99 years.
• Impact fees. TUMF rates differ by land use (retail, office, industrial, hotel, residential), so a buyer's planned use affects its development costs.

Selling versus ground leasing

Selling gives you a clean exit, but it's worth knowing first whether a buyer will need a rezoning or other approvals. If so, the purchase agreement may have to address contingencies and timing.

Ground leasing lets you keep the land and earn income while a tenant builds. Ground leases are long and complex, so have them reviewed by an attorney. On trust land, BIA approval and the term limit also apply.

Questions about zoning, entitlements, environmental review, and 1031 exchanges should go to qualified land-use, legal, and tax advisors.

Broker expertise to look for

• Land sales experience in your city or the unincorporated county
• Knowledge of the specific plan, area plan, or overlay covering your parcel
• Experience marketing sites to developers and to users
• Familiarity with ground lease structures, if you plan to keep the land

Questions to ask a broker

1. How would you describe the uses my parcel could support, and who confirms that?
2. Should I gather any due diligence documents, such as title, surveys, or zoning letters, before listing?
3. Which buyers or developers would you contact first?
4. Would a ground lease make sense here?
5. What representation agreement do you propose?

How matching works

Tell us the parcel's location, acreage, and zoning if you know it. 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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More on selling commercial property in the Coachella Valley.