By Kyle Pennacchia
If you’re a property owner in New York City, knowing your local zoning regulations and how it applies to your property is extremely important. People often think that only developers need a good working knowledge of the regulations, but that’s simply not true. Even if you purchased (as opposed to constructed) your current building and have no inclination to undergo construction or alterations of any kind, knowledge of the regulations can pay off if you are ever given an offer.
For example, let’s say you have a 100,000-square-foot lot with an industrial building that houses your company and its operations. You are approached by a ready buyer who’s more than happy to pay your asking price using a competitive researched dollar per square foot. Knowing that the purchaser is complying with all the market data, you move forward with the deal and collect your new found riches. It isn’t until after the sale goes through, you learn why the purchaser was so eager. You hear that they are building another 100,000 sq. ft. on top of the existing structure which would give the building an unobstructed view of the city and almost double the value of the property. If you had known earlier that the zoning regulations on your lot allowed that buildup, you would have put the property on the market for a much higher rate and increased the asking price accordingly.
In order to make sure you’re not leaving money on the table, a good place to start is the NYC Planning website to examine the 126 zoning maps and get additional information on zoning guidelines within the city. Empowering yourself with proper research and the right advisor, can give you valuable insight into your property’s true value. While working with your team and your newly acquire knowledge, you may decide to keep the property you might have otherwise been considering to sell.
Often you can use your accounting advisor as a sounding board in order to analyze the transaction while encompassing the bigger picture. They will hopefully be able to put you in touch with experts to help maximize the value of your property while aligning the property’s financial and operational aspects to your unique personal situation. Knowledge is very powerful, but execution is often more important. You must be well aware of all aspects of the transaction so as not to be taken advantage of and complicate your current situation. A small investment upfront or a simple phone call can mean all the difference when playing in this space.
Kyle Pennacchia, CPA, provides business advisory services for Wiss & Company LLP. His current areas of focus include real estate operations, investment and development, as well as construction services.