When it comes to urban planning and development, one of the fundamental pillars that shape the landscape of a city is its development code. These codes outline the rules and regulations that govern what can be built where, guiding the growth of communities in an organized and sustainable manner.

One critical aspect of these codes is confirming allowable uses for various zones within a municipality. 

Understanding Allowable Uses:
Allowable uses are essentially a list of activities or functions that are permitted in a specific zoning district. These uses are carefully considered to ensure that they align with the intended character of the area and are compatible with neighboring uses. This proactive approach not only helps maintain the harmony of the community but also contributes to the economic vitality and overall well-being of residents.

Importance of Confirming Allowable Uses: You don't want to end up signing a lease for a property that has a use restriction for your specific operations. This could be the difference of a deal or no deal. This is also important to consider during entitlements and zone changes. Choosing the appropriate zoning with the widest allowable uses is typically the best answer.

Southern California Examples:

1. Los Angeles: The city's development code designates specific zones for industrial and manufacturing activities. For instance, the "M" (Industrial) zones allow for various manufacturing, processing, and warehousing uses. 
2. Long Beach: Long Beach's development code designates certain areas for light manufacturing and industrial uses. The code lists activities such as research and development facilities, assembly plants, and light industrial operations as allowable uses.

Conclusion:
The importance of confirming allowable uses in a municipality's development code cannot be overstated. It restricts what the city may consider "heavy uses" from certain light industrial zoning and verification of this before development or leasing is a must.

You've seen it on marketing brochures before - 28', 32', 18' clear height - but what does that mean?

In warehousing and logistics, optimizing storage space is a crucial factor in achieving operational efficiency. Among various factors that influence a warehouse's capacity, the clear height stands out as a key consideration. Clear height refers to the vertical distance between the warehouse floor and the lowest overhead obstruction, such as beams or pipes. 

Why Clear Heights Matter: Clear heights play a pivotal role in determining a warehouse's storage capacity, safety, and flexibility. Here are a few reasons why clear heights are crucial:

1. Increased Storage Capacity: Higher clear heights enable the efficient utilization of vertical space, allowing for additional racking levels and maximizing the number of pallets or storage units that can be accommodated. This is especially beneficial for warehouses dealing with high-density or fast-moving goods.
2. Flexibility for Different Products: Warehouses often handle a diverse range of products with varying sizes and packaging. By incorporating greater clear heights, businesses can adapt their storage solutions to accommodate products of different dimensions, including oversized or stacked items.
3. Enhanced Safety Measures: Adequate clear heights are essential for the safe movement of personnel, equipment, and forklifts within the warehouse. Sufficient vertical clearance minimizes the risk of accidents, collisions, and damage to both goods and infrastructure.

Examples of Clear Heights: Warehouse buildings come in various sizes and dimensions, with clear heights ranging from 18 feet to 40 feet, depending on the specific requirements of the industry or business. Here are some common examples:

1. 20' Clear Height: This is a standard clear height often found in smaller warehouses or older construction dates. While it offers limited vertical storage space, it can still accommodate two levels of pallet racking, allowing for efficient storage of light to medium-weight goods.
2. 28' Clear Height: With an additional 8 feet of clearance, this clear height allows for three levels of pallet racking. It provides more storage capacity, making it suitable for medium-sized warehouses or those dealing with products of varying sizes.
3. 32' Clear Height: A clear height of 32 feet offers four levels of pallet racking and provides significantly more vertical storage space. This clear height is preferred by many businesses involved in e-commerce, distribution centers, and high-density storage operations.
4. 36' Clear Height: Warehouses with a 36-foot clear height offer five levels of pallet racking, making them suitable for large-scale operations, automated storage systems, and industries with high vertical storage requirements.
5. 40' Clear Height: This is the highest clear height commonly seen in warehouses. With six levels of pallet racking, it caters to businesses that handle large volumes of goods, particularly in industries such as automotive, aerospace, or heavy machinery storage.

The increase in clear height directly impacts the storage volume capacity of a warehouse. Here are the approximate percentage differences in storage volume between the aforementioned clear heights:

• 20' Clear Height: Baseline
• 28' Clear Height: 40% increase in storage volume compared to 20' clear height.
• 32' Clear Height: 90% increase in storage volume compared to 20' clear height.
• 36' Clear Height: 140% increase in storage volume compared to 20' clear height.
• 40' Clear Height: 200% increase in storage volume compared to 20' clear height.

These percentages are approximate and can vary depending on the specific layout, racking systems, and other factors present in a warehouse.

Clear heights are a critical consideration for warehouse buildings, as they directly impact storage capacity, flexibility, and safety. By choosing the appropriate clear height, businesses can optimize their storage space and accommodate a wider range of products efficiently. The examples provided demonstrate the storage volume differences associated with various clear heights, highlighting the significant benefits that higher clear heights offer in terms of maximizing warehouse efficiency and capacity.

If you need help determining which clear height makes the most sense for your operation or laying out your racking - contact us today, we have the network of experts to help you.

1. What is it?

A Sale Leaseback is a term for a transaction that involves a building owner that is also the operating business in the facility. After the sale is completed the operating business continues to occupy the building during a specified lease period. Here's an example:

Holding Company A owns 123 Main Street which is occupied by Operating Company A (which is also owned by Holding Company A). Holding Company A sells the building to Value Add Investor and agrees to lease the space for a 1 year period after the sale closes at an agreed upon rate.

2. Why would an owner user do this?

An owner user would consider this option when they hold significant equity in a property and are at the tail end of the life cycle of their operating business. This allows them to realize the gains from their equity while also giving them a wind down time for shutting down or relocating the business. Another reason could be the owner preparing for retirement.

3. Who would buy this?

There are many types of investors that are interested in Sale Leaseback transactions. A Value Add investor would look to have a shorter term lease back (12 months or less) and would hope to increase the value of the property through a new lease after the leaseback term expires.

Another type of investor may look to a sale leaseback in order to acquire a cash flowing asset with a known occupant. This reduces their vacancy risk until it is time to renew or re-tenant the building.

​4. How can I find out more?

Contact us! We have been involved in Sale Leasebacks and understand the delicate transition of going from building owner to tenant as well as critical communication when stepping in as the new owner of a leased back building.

You own a piece of land in California and want to develop a warehouse on it. Now what?

Development in California is not a straightforward process. Over the course of time various legislature has been passed that seeks to limit the environmental impacts of new development. The major law that drives this is the California Environmental Protection Act (CEQA). CEQA requires the Authorities Having Jurisdiction (AHJ) such as cities or counties to review a proposed project's environmental impact. Let's run through what the development process and considerations typically are for an industrial project (this process differs slightly for other commercial or residential projects).

Every project will need to look at the following aspects that affect a parcel:

1. What is my zoning?
2. What is my land use in the General Plan (more on General Plans in a later post)?
3. What does the development/municipal code allow to be built by-right, with a Conditional Use Permit, or Minor Permit?

If the land already has a building on it there are other considerations and possible exemptions (keep an eye out for my redevelopment post later on!) that can make the approvals timeline shorter.

1. Zoning

The city will have a zoning map that identifies what each parcel is currently zoned. Example zonings could include: Commercial General, Mixed Use, or Light Industrial. 

2. General Plan Land use

The General Plan is the blueprint for a city's growth and development. A General Plan gets updated every 4-8 years (Housing Element by law in this period, other elements can take longer to get updated). In the General Plan, the Land Use Element provides guidance on the vision for types of development throughout the city. Oftentimes this is represented by a map though it is not required to be detailed by parcel. 

Due to the General Plan getting updated periodically there are times that the Land Use in the General Plan doesn't match the Zoning per code. Since the General Plan is the vision for the city, Planning departments are typically open to zone changes to convert a parcel's zoning to match the General Plan Land Use designation.

3. Allowable Uses per Development Code

With the zoning and land use determined, the next step is to review the Development Code to see what is allowed in each zoning district. A project can be Permitted, require a Conditional/Minor Use Permit, or Not Allowed. Most cities have a matrix showing each typical use and the status in each zoning district. See an example below:

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Now that you've determined what you can build on your property per existing code your next step is to go through the Planning approval process. The below flowchart gives you an idea of just how many steps are involved before you even start construction!

Stay tuned for future posts about the CEQA process, navigating plan check, and more!

Welcome to the first blog post for Industrial Socal. Industrial Socal is a site focused on providing expertise on industrial real estate in Southern California and connecting people with the resources they need for their specific project.