A Midwest real estate developer engaged Ground Floor Partners to conduct a highest and best use study for a 3.5 acre undeveloped parcel he had recently acquired. The lot was located across from a large hospital, just north of a senior living complex, and minutes away from a major highway. He had already done his own research and had narrowed his options down to two: a storage space facility versus a flex space business park. We were tasked with comparing and contrasting these two options to help him make an informed decision as to which one would be more profitable.
Approach
Our research included extensive research and analysis on demographics; local, regional and national market trends; potential business models; estimates of startup and ongoing costs; potential revenue streams and levels; local direct and indirect competition; as well as opportunities, threats, challenges and risks.
We visited the area, and met with business owners and staff at nearby industrial parks and storage facilities. We also reviewed data from the local Department of Planning and Development, and spoke with senior staff there. We also estimated construction, staffing & operating costs for the two major options under several different scenarios.
Results
Our initial research suggested either option could work, but more in-depth research indicated that the local area was saturated with storage facilities, whereas demand for flex space business parks was strong and growing. The choice was clear and our client moved forward with the flex space option, eventually purchasing an adjacent lot to nearly double his space to over 6.0 acres.