"Buy land, they’re not making it anymore"
“Buy land, they’re not making it anymore” is one of the many well known quotes of Mark Twain. A culmination of several factors from our robust economy to the flood management plan has created what others are calling a “renaissance” in Napa. There are key “trophy” properties being sold and developed, which has created a momentum.
To give you a taste of what is occurring, Saratoga Downs, a 178-unit apartment community in Napa sold February 6 for $58.5 million. In 2013 the same apartment community sold for $20.7 million. Nice return for holding a property for two years!
This example is exceptional, but not all returns are this extraordinary. However, investors and developers see opportunity in Napa because “they’re not making any more land.”
There are several infill projects occurring, which are smaller residential and commercial developments on raw land or underutilized land within the city boundaries. One of those “trophy” properties on underutilized land recently on the market for sale is the Napa Valley Register building.
Lee Enterprises, Inc., who owns the Register as well as about 46 other newspapers across the nation, is selling their office on Second Street. The trend across the nation is for newspapers to look at ways of restructuring in this new day of online media. Selling real estate assets is one way of improving their balance sheet.
The Register building is for sale at $5.25 million along with a parking lot across the street for an additional two-hundred and fifty-thousand dollars. An associate and I had the pleasure of submitting an offer to purchase both properties on behalf of our client along with several other offers.
I cannot give the details to the offer, but in looking at the highest and best use for this site we can see its potential. The zoning is Downtown Neighborhood which allows for a limited amount of uses ranging from office, health-related businesses, service-type businesses, bed & breakfasts and residential.
However, because this site has been a commercial use for many years, the zoning will also allow for additional commercial uses. Medical equipment sales, retail, health clubs, specialty schools, wine tasting and specialty food-related uses are all allowed with a conditional use permit.
With the availability of several types of uses for the site this gives a comprehensive vision to the potential buyer and developer.
Being limited to two levels the highest and best use would most likely incorporate a commercial element on the ground floor with residential units on the second level. We need to be aware of parking requirements, but with the adjacent parking lot across the street being a part of the sale we will have the ability to create an attractive development complementary to the location.
Perhaps a mixed-use, lofts or live/work development with office and retail on the ground floor would be welcome. I could see a “lifestyle” center with retail, restaurants and services geared towards the upstairs residents and neighborhood in general.
What are your suggestions?
Photo "Five Feet Wide Five Feet Deep" courtesy of New Old Stock, free of known copyright restrictions