Site selection is the most consequential decision in development. The wrong site dooms even great execution; the right site supports even modest execution. Experienced developers spend significant time evaluating sites before committing capital, and they know that walking away from bad sites is just as important as locking up good ones. This lesson covers how to find sites, evaluate them, conduct preliminary feasibility, and negotiate the contracts that control them.

Site selection criteria

Different product types need different sites, but some universal criteria apply.

Universal criteria

Location fundamentals:

Population/customer access — proximity to demand
Visibility — easy to find
Accessibility — easy ingress/egress
Traffic counts — supporting demand
Demographics — matching target customers
Growth trajectory — improving area, not declining

Physical characteristics:

Size — adequate for the project
Shape — efficient use of land
Topography — relatively flat (or workable)
Soils — buildable
Drainage — manageable
Frontage — adequate road frontage
Access — multiple access points if possible

Regulatory:

Zoning — supports intended use (or rezone is achievable)
Comprehensive plan — supports use
Concurrency — infrastructure capacity available
Environmental — no major environmental constraints
Wetlands — limited or none
Floodplain — limited or none

Infrastructure:

Water — available, adequate capacity
Sewer — available, adequate capacity
Power — available, adequate capacity
Gas (if needed) — available
Telecom/fiber — available
Roads — adequate, no major improvements needed

Market and economic:

Achievable rents support development pro forma
Demand supports lease-up
Limited competition in trade area
Acceptable land cost as percentage of total development cost (typically 15-25%)

Product-specific criteria

Retail sites:

Hard corner intersection preferred
Signalized intersection ideal
25,000+ traffic count
Population density appropriate for use
Co-tenancy with grocery, gas, QSR drives traffic

Industrial sites:

Highway access (within 5 miles of major interstate)
Truck access and routes
Industrial zoning
Adequate size for building + truck court + parking
Limited residential adjacency
Labor availability

Office sites:

Office or mixed-use zoning
Visibility and accessibility
Adequate parking
Walking amenities preferred
Talent access

Multifamily sites:

Multifamily zoning or rezone potential
Walkability or transit access
Schools (for family product)
Amenities nearby
Adequate size for unit count

Self-storage sites:

Visible from road
Commercial zoning
1.5-3 acres typical
Limited competition in trade area
Demographics matching storage demand

Sources of development sites

Land brokers

The primary source of development sites:

Specialize in unimproved land
Track ownership and availability
Have relationships with sellers
Bring deals to developers

Major Florida land brokers:

Trinity Commercial Group
MaxLife Development — land specialty
CBRE Land Services
Cushman & Wakefield Land
Colliers Land
SVN Florida
Local specialty brokers

Build relationships with multiple land brokers and clearly communicate your buy box.

Direct outreach to landowners

Many development sites are owned by:

Long-tenured family owners
Estates and trusts
Inactive corporate owners
Out-of-area owners

Direct mail, cold calls, and in-person outreach can surface sites not actively listed.

Driving target areas

Physical observation of growing areas reveals:

Vacant land
Underutilized properties
Distressed properties
Sites with development potential

Document each, pull ownership records, add to outreach list.

County GIS and property records

Online tools provide:

Parcel boundaries
Ownership information
Zoning
Sales history
Tax assessments
Aerial imagery

Florida-specific tools:

County property appraiser websites (each county)
Florida Department of Revenue records
County GIS portals

Auction sales

Distressed properties and tax sales sometimes offer development sites.

Estate and probate

Probate court records sometimes reveal estate sales of development sites.

Networking

Other developers, builders, attorneys, and brokers know about sites. Build relationships throughout the development community.

Pre-existing relationships

Some of the best sites come from prior relationships — past sellers, past partners, past tenants who know about land.

Initial site screening

When you identify a potential site, do an initial screen quickly and cheaply.

Desktop screening (1-2 hours)

For each potential site:

Pull aerial imagery (Google Earth, county GIS)
Pull parcel data (size, zoning, ownership, sale history)
Check zoning vs intended use
Check comprehensive plan designation
Check FEMA flood map
Check wetlands (USFWS National Wetlands Inventory)
Identify utilities (verify availability)
Check traffic counts (state DOT data)
Check demographics within 1, 3, 5 miles
Pull comparable sales in the area

This costs nothing but your time and screens out 80%+ of sites quickly.

Site visit (half day)

For sites that pass desktop screening:

Drive the site and surroundings
Verify visibility and access
Note adjacent uses
Note existing improvements
Photograph the site from multiple angles
Identify any obvious constraints (wetlands, utility easements, slopes)
Visit local jurisdiction if helpful

Site visits eliminate sites that look good on paper but have problems on the ground.

Highest and best use analysis

For sites that pass site visits:

The highest and best use of a site is the use that produces the greatest value, considering:

Legally permissible — what the zoning allows
Physically possible — what the site can accommodate
Financially feasible — what generates positive returns
Maximally productive — what produces the highest value

Sometimes the highest and best use isn't obvious. Test multiple use scenarios:

Single-tenant retail (QSR, drive-thru, drug store)
Multi-tenant retail (strip center)
Office (medical, professional)
Industrial (warehouse, flex)
Self-storage
Multifamily
Hotel
Mixed-use

For each, run a quick pro forma to estimate value and select the highest.

Preliminary feasibility analysis

For sites with strong potential, do a preliminary feasibility analysis to determine if the project pencils.

Concept design

Engage an architect for a quick concept:

Building footprint
Parking layout
Landscape and setbacks
Storm water area
Driveways and access

This is a "back of the envelope" design, not full architectural plans. Cost: $2K-$10K typically.

Cost estimate

Estimate total project cost:

Hard costs:

Site work
Building shell
Building interior
Utilities and connections
Stormwater
Landscaping
Hardscape and parking
Signage

Soft costs:

Architecture and engineering (5-10% of hard cost)
Permits and impact fees
Legal
Insurance during construction
Construction interest
Lender fees
Marketing and leasing
Property taxes during construction
Developer fee
Contingency (10-15% of hard cost)

Land cost:

Purchase price
Closing costs
Holding costs

Total project cost = sum of all of the above.

Revenue projection

For the planned use:

Lease-up assumptions — months to stabilization
Achievable rent — by SF and total
Operating expenses — for stabilized operation
Stabilized NOI

Stabilized value

Stabilized value = Stabilized NOI / Exit cap rate

Profit analysis

Development profit = Stabilized value - Total project cost
Profit margin = Development profit / Total project cost

A typical development target:

15-25% profit margin on cost
20-35% IRR on equity
1.5-2.5x equity multiple

Below these thresholds, the project doesn't justify the risk.

Sensitivity analysis

Stress test the assumptions:

What if construction costs are 10% higher?
What if rents are 10% lower?
What if cap rates widen by 50 bps?
What if lease-up takes 12 more months?
What if interest rates are 100 bps higher?

A robust project survives these stress tests.

Site control: contracts and options

Once a site passes preliminary feasibility, control it via contract.

Purchase contract structures

Standard purchase contract:

Earnest money deposit
Inspection period (usually 30-90 days)
Financing contingency (sometimes)
Closing date

This is the simplest structure but provides limited time for entitlements.

Extended due diligence period:

Standard purchase contract with extended inspection
6-12+ months of due diligence
Multiple deposit increases at milestones
Right to terminate during DD

This gives time for entitlements before closing.

Option contract:

Pay option fee (typically 1-5% of purchase price)
Right but not obligation to purchase
Long option period (12-36 months)
Sometimes contingent on entitlements
Option fee may apply to purchase

This gives maximum flexibility but is more complex and costly.

Contract subject to entitlements:

Standard purchase contract
Entitlement contingency
Buyer can terminate if entitlements fail
Specific milestones in the contract

This provides protection but seller may resist.

Key contract terms

Earnest money:

Initial deposit (1-3% of purchase price typical)
Additional deposits at milestones
Refundable during DD; sometimes non-refundable after

Due diligence period:

Length (60-365+ days for development)
Right to terminate during DD
What's included (Phase I, survey, soils, market study, entitlements)

Closing date:

Time to close after DD ends
Conditions to closing
Extensions available

Title and survey:

Seller delivers title commitment
Buyer reviews and objects
Survey requirements (boundary, ALTA)

Conditions to closing:

Title clear
Survey acceptable
Phase I clean (or Phase II remediation acceptable)
Entitlements achieved (if entitlement contingency)
Financing available
No material adverse change

Representations and warranties:

Seller represents site condition
Seller represents disclosure of known issues
Seller's knowledge of environmental issues

Default and remedies:

What happens if buyer defaults
What happens if seller defaults
Liquidated damages or specific performance

Assignment:

Right to assign contract to entity
Common for developers to close in LLC

Negotiating site control

Sellers have varying motivations:

Cash — value certainty over price
Price — value highest price even with contingencies
Flexibility — willing to wait for entitlements
Speed — want to close quickly
Tax — installment sale or 1031 exchange

Match contract structure to seller motivation.

Due diligence during contract

Once under contract, conduct full due diligence.

Physical due diligence

Phase I Environmental Site Assessment:

Standard ASTM 1527 Phase I
Cost: $2K-$5K typical
30-45 day turnaround
Identifies recognized environmental conditions (RECs)
Required by most lenders

Phase II if indicated:

Soil and groundwater sampling
Cost: $10K-$50K+ typical
For sites with potential contamination

Boundary survey:

Defines property boundaries
Identifies encroachments
Required for closing

ALTA survey:

More detailed survey
Required by many lenders
$5K-$15K typical for commercial sites

Topographic survey:

Elevation contours
Used for grading design

Geotechnical investigation:

Soil borings and analysis
Foundation recommendations
$5K-$20K typical

Wetlands delineation:

Identifies wetland areas on site
Required if any wetlands suspected
$3K-$10K typical

Regulatory due diligence

Zoning verification:

Confirm current zoning
Identify use rights
Identify development standards (setbacks, height, FAR)

Comprehensive plan review:

Verify use is consistent
Identify any issues

Concurrency analysis:

Verify infrastructure capacity (water, sewer, transportation)
Identify capacity constraints
Identify required improvements

Pre-application meeting with municipality:

Discuss project with planning staff
Get feedback on viability
Identify potential issues

Title and easement review:

Verify clean title
Identify easements (utility, access, conservation)
Address any title issues

Restrictive covenants:

Review any deed restrictions
Identify use limitations
Address conflicts

Market due diligence

Market study:

Validate demand for intended use
Comparable rents and sales
Competition analysis
Absorption assumptions

Lender feedback:

Validate financing assumptions
Identify lender concerns

Contractor input:

Cost validation
Constructability assessment
Schedule input

Worked example: site selection in Lakeland, FL

You're seeking a site for a 7,500 SF NNN retail development with two outparcels.

Initial criteria

Size: 1.5-2.5 acres
Zoning: Commercial (C-2 or equivalent)
Traffic: 25,000+ VPD
Demographics: 20,000+ population in 3 miles
Visibility: Hard corner preferred
Price: $1.5M-$2.5M for the land
Geography: Polk County, Lakeland area

Site identification

Engage 3 land brokers
Drive target submarkets
Identify 12 potential sites over 6 weeks
Initial desktop screening eliminates 6
Site visits eliminate 3 more
3 sites pass to preliminary feasibility

Top candidate

2.1 acres on hard corner
Signalized intersection
31,000 VPD
$2M asking price
Currently zoned C-2 (perfect)
Demographics: 26,000 population in 3 miles, $68K HHI
Visibility excellent
All utilities available
No wetlands or floodplain

Preliminary feasibility

7,500 SF building
2 outparcels of 0.4 acres each
Estimated land + soft + hard cost: $3.8M
Estimated stabilized rent: $32/SF for in-line + $80K/year per pad
Estimated stabilized NOI: $290K
Estimated stabilized value: $4.6M (at 6.25% cap)
Development profit: $800K (21%)

This pencils. Move to contract.

Contract structure

$2M purchase price
$50K earnest money (2.5%)
90-day inspection period
60 days additional for entitlement contingency
Closing 30 days after entitlement
Total: ~6 months to closing

Outcome

Site passes due diligence
Entitlements achieved (existing zoning permitted use)
Closes on time
Construction begins 4 months after closing
Project stabilizes 18 months later
Returns match preliminary feasibility

This is how site selection should work: systematic identification, careful screening, conservative feasibility, controlled contract terms.

Common site selection mistakes

Falling in love with a site before validating feasibility
Ignoring regulatory red flags during initial screening
Overpaying for land because you wanted to develop
Underestimating site work costs for difficult topography
Ignoring environmental issues until late in due diligence
Wrong product for the site (forcing the wrong use)
Inadequate contract protections (no inspection period, no termination rights)
Skipping market validation (assuming demand exists)
Trusting seller representations without independent verification
Moving too fast because you fear losing the deal

What to take away

Site selection is the most consequential decision in development
Universal criteria: location, physical, regulatory, infrastructure, market, economic
Different product types need different site characteristics
Sources: land brokers, direct outreach, driving markets, GIS data, networking
Initial screening: desktop analysis, site visit, highest and best use, preliminary feasibility
Site control: standard contracts, extended DD, options, entitlement contingencies
Due diligence: physical (Phase I, surveys, geotech), regulatory (zoning, concurrency, title), market (demand, comps)
Pencil the project carefully before committing capital
Walking away from bad sites is as important as locking up good ones
Common mistakes: falling in love with sites, ignoring red flags, overpaying, weak contracts

Next lesson: entitlements, zoning, and the political process — how to navigate the most uncertain phase of development.

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