© 2024 Real Estate Consultants of Colorado, LLC
Austin, TX
In 2016, I started working on a newdevelopment near Denver International Airport that required the acquisition ofa parcel of land upon which my client was to build thousands of parking spacesand a relatively small building of about ten thousand square feet. Scale aside,I quickly learned that to the north and west of PeñaBoulevard in Commerce City, storage parking that required an outdoor storagezoning designation was not allowed, so we focused on parcels south and east of Peña Boulevardin Aurora where zoning in developments like Porteos could accommodate outdoorstorage. I thought: how could Commerce City, whose name underscores adecades-long track record of welcoming business - heavy industry and otherwise- be turning away companies with outdoor storage needs? And what if otherbusinesses didn’t have the opportunity to cross the street for the zoning theyneeded?
Since then, I have worked with landscapers,contractors, engineering firms, mechanics, car dealerships, animal carecompanies, trucking companies and the like for their outdoor storage acquisitionsand I can tell you these are hard searches for nothing fancy. Most of theseuses are also not stereotypically dirty or noisy but municipalities require azoning designation for the outdoor storage that speaks more to heavy industrythan the outdoor use itself. Moreover, municipalities rarely issue more ofthese designations, so buying raw land and building from scratch is often notan option. My clients are usually one of many buyers lined up on the property’sfirst day to market, competing to pay the asking price or more at levels thatare pushing values to new highs after we have stretched the geographicboundaries of our search to disappointing distances. Buyers and tenants arethen calculating the increase in fuel costs, hourly wages, and vehicle wear andtear that they will incur because they will now be five, ten, fifteen milesfurther from their target audience. In this sense, the problem becomes one notonly of demand exceeding supply but of the waste caused by moving further awayfrom one’s target audience.
Unfortunately, these companies havea tough road ahead. Earlier this year, Adams County proposed regulatoryamendments that would limit outdoor storage for industrial properties inunincorporated locations.[1]Currently, certain Adams County industrial zoning designations allow foroutdoor storage on the lesser of eighty percent of property’s acreage or tenacres. The new proposal calls for permissible outdoor storage betweentwenty-five and fifty percent of the property’s land area, allegedly with nograndfather clause to protect existing businesses who have enjoyed the currentallowances for years![2]Months into the process, the county delayed a November vote on the new zoningpolicy after an October survey found that eighty percent of businesses polled opposedthe amendment.[3]
So why has the scarcity of outdoorstorage become an increasingly acute trend? There are at least two explanations:First, there is the sentiment that outdoor storage is unsightly and socommunities should protect themselves against such tarnish. In the case ofAdams County, the regulatory amendment is said to have been born from the localgrowth in new housing developments that would be exposed to nearby industrialactivity. Second, when land becomes more valuable, the highest-and-best use oftenbecomes maximizing the building square footage rather than the yard space. TakeRiNo, for example, where properties previously used for heavy industry now regularlysell above $200 per land square foot. As a result, the small industrial buildingson large lots make way for new developments that maximize the building-to-landratio and the height allowed by zoning. As central neighborhoods like RiNoappreciate, the surrounding rings also experience a bump. And when valuesincrease as they have on the Front Range in recent years, the dissemination ofthis trend has far-reaching results: all-of-a-sudden, outdoor storage is onlyavailable on the fringe and the need to move further and further out leads toincreased traffic and pollution, decreased efficiencies and perpetuates a cycleof systematic business displacement.
If outdoor storage seems to begoing away but is critical for so many businesses upon which we all rely, what canwe do about it? First, buy industrial properties with outdoor storage componentsand keep their current uses… although perhaps not in unincorporated AdamsCounty. Supply and demand fundamentals should bring youhandsome returns from both rental income and land banking perspectives. Second,be a vocal citizen with your local government and let’s work together to put asustainable and responsible plan in place for how planning departments canincorporate new neighborhood plans allowing for outdoor storage in a safe andrespectful way. Third, businesses can alleviate supply pressures by using onlythe outdoor storage area they truly need and subleasing out the rest. And fourth,we have a responsibility to continue exploring technologies and supply chain strategiesthat can reduce the amount of outdoor storage space on which the businesses weuse depend.
[1] ProposedRegulation Amendments. Adams County Colorado. https://www.adcogov.org/regulation-amendments.Visited November 23, 2021.
[2] AdamsCounty delays vote on outdoor storage changes for industrial users.BusinessDen. https://businessden.com/2021/11/09/adams-county-industrial-users-balk-at-plan-to-change-outdoor-storage-rules/#newsletterVisited November 23, 2021.
[3]Id.
In 2016, I started working on a newdevelopment near Denver International Airport that required the acquisition ofa parcel of land upon which my client was to build thousands of parking spacesand a relatively small building of about ten thousand square feet. Scale aside,I quickly learned that to the north and west of PeñaBoulevard in Commerce City, storage parking that required an outdoor storagezoning designation was not allowed, so we focused on parcels south and east of Peña Boulevardin Aurora where zoning in developments like Porteos could accommodate outdoorstorage. I thought: how could Commerce City, whose name underscores adecades-long track record of welcoming business - heavy industry and otherwise- be turning away companies with outdoor storage needs? And what if otherbusinesses didn’t have the opportunity to cross the street for the zoning theyneeded?
Since then, I have worked with landscapers,contractors, engineering firms, mechanics, car dealerships, animal carecompanies, trucking companies and the like for their outdoor storage acquisitionsand I can tell you these are hard searches for nothing fancy. Most of theseuses are also not stereotypically dirty or noisy but municipalities require azoning designation for the outdoor storage that speaks more to heavy industrythan the outdoor use itself. Moreover, municipalities rarely issue more ofthese designations, so buying raw land and building from scratch is often notan option. My clients are usually one of many buyers lined up on the property’sfirst day to market, competing to pay the asking price or more at levels thatare pushing values to new highs after we have stretched the geographicboundaries of our search to disappointing distances. Buyers and tenants arethen calculating the increase in fuel costs, hourly wages, and vehicle wear andtear that they will incur because they will now be five, ten, fifteen milesfurther from their target audience. In this sense, the problem becomes one notonly of demand exceeding supply but of the waste caused by moving further awayfrom one’s target audience.
Unfortunately, these companies havea tough road ahead. Earlier this year, Adams County proposed regulatoryamendments that would limit outdoor storage for industrial properties inunincorporated locations.[1]Currently, certain Adams County industrial zoning designations allow foroutdoor storage on the lesser of eighty percent of property’s acreage or tenacres. The new proposal calls for permissible outdoor storage betweentwenty-five and fifty percent of the property’s land area, allegedly with nograndfather clause to protect existing businesses who have enjoyed the currentallowances for years![2]Months into the process, the county delayed a November vote on the new zoningpolicy after an October survey found that eighty percent of businesses polled opposedthe amendment.[3]
So why has the scarcity of outdoorstorage become an increasingly acute trend? There are at least two explanations:First, there is the sentiment that outdoor storage is unsightly and socommunities should protect themselves against such tarnish. In the case ofAdams County, the regulatory amendment is said to have been born from the localgrowth in new housing developments that would be exposed to nearby industrialactivity. Second, when land becomes more valuable, the highest-and-best use oftenbecomes maximizing the building square footage rather than the yard space. TakeRiNo, for example, where properties previously used for heavy industry now regularlysell above $200 per land square foot. As a result, the small industrial buildingson large lots make way for new developments that maximize the building-to-landratio and the height allowed by zoning. As central neighborhoods like RiNoappreciate, the surrounding rings also experience a bump. And when valuesincrease as they have on the Front Range in recent years, the dissemination ofthis trend has far-reaching results: all-of-a-sudden, outdoor storage is onlyavailable on the fringe and the need to move further and further out leads toincreased traffic and pollution, decreased efficiencies and perpetuates a cycleof systematic business displacement.
If outdoor storage seems to begoing away but is critical for so many businesses upon which we all rely, what canwe do about it? First, buy industrial properties with outdoor storage componentsand keep their current uses… although perhaps not in unincorporated AdamsCounty. Supply and demand fundamentals should bring youhandsome returns from both rental income and land banking perspectives. Second,be a vocal citizen with your local government and let’s work together to put asustainable and responsible plan in place for how planning departments canincorporate new neighborhood plans allowing for outdoor storage in a safe andrespectful way. Third, businesses can alleviate supply pressures by using onlythe outdoor storage area they truly need and subleasing out the rest. And fourth,we have a responsibility to continue exploring technologies and supply chain strategiesthat can reduce the amount of outdoor storage space on which the businesses weuse depend.
[1] ProposedRegulation Amendments. Adams County Colorado. https://www.adcogov.org/regulation-amendments.Visited November 23, 2021.
[2] AdamsCounty delays vote on outdoor storage changes for industrial users.BusinessDen. https://businessden.com/2021/11/09/adams-county-industrial-users-balk-at-plan-to-change-outdoor-storage-rules/#newsletterVisited November 23, 2021.
[3]Id.
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