Selling Commercial Land in Vermont

Vermont's picturesque landscapes and thriving real estate market make it an attractive destination for commercial land investors. According to the 2017 Census of Agriculture, Vermont boasts approximately 1.2 million acres of farmland, with an average farm size of 175 acres. Interestingly, the market value of agricultural land and buildings in the state has increased by 12% since 2012, reaching an average of $4,629 per acre. This upward trend in land values, combined with Vermont's diverse economic sectors, presents a promising opportunity for those looking to sell commercial land in the Green Mountain State.

Defining Commercial Property in Vermont

Zoning laws classify land broadly as residential, commercial or industrial. Within commercial, many subtype designations exist covering uses like retail, offices, hospitality, warehousing and healthcare. While zoning dictates allowed property usages, it does not fully define Vermont’s interpretation of commercial land which depends heavily on location.

For example, a few acres along a rural state highway mile from any town center might be zoned commercial but lack infrastructure. Meanwhile, a similar sized lot within a business park next to municipal utilities and transportation routes offers far more potential value to buyers.

Beyond zoning, factors like accessibility, visibility, surrounding demographics and parcel improvements play critical roles for properly positioning commercial land listings. Those marketing properties must interpret how these variables interact across Vermont’s diverse geographies – from regional business hubs like Rutland and Brattleboro to tourism and recreation hotspots near ski resorts to rural manufacturing or agriculturally-driven local economies spread across the state’s 9,616 square miles.

Understanding Allowed Uses Based on Local Zoning

As mentioned previously, commercial land zoning classifications dictate what types of buildings and businesses may occupy a property through permitted and conditional uses. Landowners and brokers must reference municipal planning regs when pricing and pitching parcels to prospects.

For example, a commercially zoned lot in Southern Vermont may allow:

Permitted Uses: Retail facilities under 15,000 sq ft Professional services under 10,000 sq ft Hospitality establishments up to 100 rooms Light industrial warehouses under 40,000 sq ft

Conditional Uses: Large shopping centers and “big box” retail Lodging over 100 rooms Heavy manufacturing

Permitted usages align with “by right” small business and retail services fitting the area’s rural profile. Conditional uses require additional planning reviews and public hearings before gaining local approval.

Understanding these usage regulations provides realistic targets when evaluating buyers. Pricing should reflect zoning’s opportunities and limitations. Those listing conditional use properties may discount values slightly knowing additional steps stand between buyers and building plans.

Appraising Land Value Off Available Utilities and Access Routes

While zoning sets parameters for property usages, infrastructure factors like utilities, roadway access and visibility enable construction. Land appraisals combine zoning allowances with the degree of site improvements required before projects begin.

Ideally, commercial parcels tie directly into municipal power, water and sewage plus feature multiple ingress/egress points to handle business traffic. Listing prices climb significantly for “shovel ready” level lots with all infrastructure in place compared to raw land lacking some utilities or road frontage.

Similarly, land alongside highways or major thoroughfares offer better impressions and access than sections deep inside office parks or industrial zones. Traffic counts, visibility and ease of finding locations raise land value for retail, hospitality and other customer-facing ventures. Proximity to Interstates 87, 89 and 91 which intersect Vermont connect businesses regionally.

Our state’s hilly and mountainous terrain also factors into infrastructure development costs which ultimately impact price. Assess environmental elements like:

• Wetlands protection areas impeding construction
• Flood zone risks requiring special mitigation
• Grading for flat build sites on steep grades
• Blasting through ledge and stone to access routes, utilities
• Tree clearing and erosion controls

While developers incorporate engineering for hillsides andslopes, owners pay premiums for readily buildable topography.

Determining Price Per Acre Based on Total Parcel Size

In addition to zoning, access and land condition, overall parcel size greatly sways appraised value on a price per acre basis. Like anything in real estate, larger commercial lots often save buyers money long term leveraging future economy of scale.

Smaller zonings like general business may allow lots starting around a quarter acre. But light industrial and office parks usually require minimum 1-3 acre parcels per single enterprise while retail centers and warehouses run 10-30+ acres.

Additionally, builders adding leased tenant spaces, multi-building campuses or commercial/residential mixed usage must assemble enough total acres first. This “assemblage premium” lets large aggregators pay above standard per acre rates if smaller adjacent lots enable a master plan. Savvy developers may piece together 1-5 acre parcels to erect offices, shops and eateries sharing infrastructure.

In downtown zones, fewer legal lots remain for sale making intact acreage very valuable. Yet even rural regions need adequate room for septic, parking and future single tenant growth so prices climb faster under 5-10 acres. Understanding demand for both small infill properties and larger green space in Vermont is essential for smart valuations.

Estimating Market Value to Set Accurate Asking Prices

While zoning, utility access and acreage provide baseline metrics for pricing land, ultimately market factors determine property worth to buyers. Economic shifts in business sectors, company expansions or contractions, population and labor trends plus real estate cycles carry significant pricing sway.

What a developer building a new strip retail center may pay for commercially zoned land in boom times can deflate 30-40% just years later if economies shift. We saw this play out in 2008-2010 when vacant commercial land valuations dropped after the recession hit.

Therefore, sellers and brokers must gauge macro-level market conditions based on property type plus dig deeper into local supply-demand when setting asking prices.

These steps help accurately position land value:

• Research recent comps for similar nearby lots that sold to note pricing
• Track days-on-market for current comparable listings to identify buyer demand surges or lulls
• Catalog recent new business openings/expansions fueling commercial growth
• Interview key industry players to collect intel on planned local investments
• Identify any new development proposals to assess future inventory

While no Vermont county operates exactly alike, tracking metrics countywide still indicates macro-level directionality helpful for positioning land. Apply insights from market intel when making listing price and adjustment decisions.

Accepting Longer Timeframes to Sell in Vermont’s Unique Economy

Even armed with zoning codes, cost assessments and market data, commercial landowners must appreciate that Vermont moves at its own pace driven by local community priorities as much as economics. The independent spirit central to our culture resists outside assumptions on business growth and real estate projections.

Beyond unusually tight labor pools and higher costs of living, businesses navigating Vermont’s varied regions phase multi-month expansions different than larger metro markets. Our small towns maintain loyal followings that stabilize main street storefronts but limit quick inventory turnover. Quirky zoning laws and drawn out permitting processes further slow development.

Consequently, commercial property sales follow lengthy deal cycles ranging from 90 days up to 24 months averaging over a year based on lot characteristics. Expect to spend 6-12 months marketing land even through the most aggressive brokerage channels and buyer networks. Repeated outreach across digital and interpersonal channels proves necessary to match Vermont’s niche property assets with compatible investors from both inside and outside the state.

While patience pays off for most Vermont commercial land sellers, others may choose to exit ownership faster through liquidation sale options. Companies exist to quickly buy sites directly from owners should pressing financial, legal or tax reasons require immediate funds. These sales often trade maximum value for speed and convenience. But for those with longer time horizons, dedicating resources to effectively showcase and position your property to buyers should pay dividends.

The Green Mountain State will continue balancing economic growth with environmental preservation and local community values that make Vermont unique. While this shapes our commercial land market’s complexion, understanding the factors detailed above allow smart pricing and positioning for successful transactions.

Final Thoughts

Selling commercial land in Vermont entails a uniquely localized approach that factors in municipal zoning codes, property site utilities, parcel sizes, market value and cycle times. Landowners aiming to optimize sale prices and conditions first explore permitted usages under their county’s planning regulations. From there, assessing accessibility to roads, water, power and sewer evaluates infrastructure build costs and impacts property value. Then reviewing nearby comparable acreage sales and current buyer demand sets baseline pricing. Yet patience remains imperative as Vermont’s patchwork economies and development processes stretch sales to a year or longer. Taking time to thoroughly market both digitally and through broker networks connects with buyers willing to pay fair prices that balance both economic and Vermont’s community returns. Following these steps for understanding regulations, access, market value and cycles leads to commercial land sales success.

Frequently Asked Questions (FAQs)

What types of land are considered commercial in Vermont?

In Vermont, commercial land is typically zoned by municipalities as retail, office, hospitality, healthcare, industrial or warehouse usage. Beyond zoning, factors like accessibility, visibility, infrastructure and parcel size also determine property value and appeal to business buyers. So, while a rural highway lot may be "commercially" zoned, it may not truly be valued as commercial land without utilities in place.

How long does it usually take to sell commercial land in Vermont?

Due to Vermont’s very local economies, niche industries across different regions, community-driven development policies, and high regulations, plan for commercial land sales to take 12-24 months typically. Setting realistic expectations for both pricing and sales cycles is imperative. Through dedicated marketing across digital and broker networks, deals can close but patience and persistence connect the right buyers to listed properties.

Should I expect to sell my land for the full asking price?

Rarely do initial list prices and final sales values align for commercial land in Vermont. Factors like allowed usage, site development costs, market shifts and local supply/demand mean negotiating to a middle ground price is common. Be prepared to receive offers below asking values initially, then work toward an equitable deal through constructive conversation between the buyer’s and seller's positioning.

What steps should I take before listing land for sale?

• Consult municipal planning and zoning regulations on permitted property usages
• Assess any environmental factors impacting builds like wetlands or erosion
• Catalog recent sales of comparable nearby parcels
• Estimate costs to bring utilities, improve access and ready construction
• Gauge business growth and real estate cycles across the local market
• Interview brokers to outline sales timeline expectations

Should I consider offers to buy my land outright for cash?

For some landowners facing financial pressures or tax burdens from their properties, selling directly to investment groups provides faster cash returns than waiting out longer sales cycles with traditional buyers. While cash sales may bring slightly lower pricing than listing on the open market, secured deals close quickly without uncertainties over finding (and agreeing to terms with) viable buyers.

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