Are you prepared to evaluate a one-acre blank canvas that could redefine your development strategy thanks to its proximity to a major transit hub?
1-acre vacant lot near Union Station hits the market – The Business Journals
This listing is straightforward and provocative: one acre of vacant land, positioned close to Union Station, publicly listed through a Business Journals channel. You read that and you feel the possibilities and the hazards at once. Proximity to a central transit station changes the calculus of value, permitting, and community expectations. You need to understand more than just square footage; you need zoning nuance, infrastructure realities, political context, financing structures, and an honest appraisal of risk.
Below you will find a rigorous, practical, and candid guide to assessing a parcel like this, organized so you can apply it immediately to a real transaction. The goal is to equip you with a framework for evaluation, a list of required actions, and scenario-based financial thinking so you avoid the most common—and brutal—mistakes.
What the listing actually includes (and what it omits)
The public notice you encountered contained boilerplate language about cookies and localization—this is common for media websites. In plain English: the site uses cookies and collects data to deliver services, measure engagement, and show ads. You can accept, reject, or manage settings. This is noise. The number you need is the lot, the access points, and the legal particulars.
What was likely omitted or minimal in the listing:
- Precise zoning designation beyond a broad label (e.g., “commercial” or “mixed-use”).
- Utility hookups and capacity details.
- Easements, restrictive covenants, and known environmental conditions.
- Recent comparable sales within a block or two of Union Station.
- Information about community plans or pending city initiatives that may impact entitlement chances.
You must assume the listing gives you a headline, not the story. Your job is to get the story.
Key parcel facts you must confirm immediately
You should verify these items before any meaningful financial modeling or LOI. They will change your assumptions.
| Item | Why it matters | What you should do |
|---|---|---|
| Legal description and parcel ID | Basis for title search and tax records | Order preliminary title report |
| Exact acreage and surveyed boundaries | Determines developable area and setbacks | Commission a boundary survey |
| Zoning code and allowable uses | Sets the baseline for what you can build | Confirm with city planning; pull zoning map |
| Floor Area Ratio (FAR) / height limits | Impacts density and revenue potential | Request zoning code excerpts |
| Existing entitlements or pending applications | Could speed up or complicate project | Obtain copies of permits or filings |
| Utility availability & capacity | Forces redesigns or additional costs | Contact utility providers; request capacity letters |
| Environmental status (Phase I/II) | Contamination can be project-killing | Order Phase I ESA immediately |
| Easements, ROWs, covenants | Limits site layout and circulation | Title review and survey to reveal encumbrances |
| Traffic and access | Affects parking requirements and demand | Traffic study or pre-application with DOT |
| Historic designation | Triggers reviews and mitigation | Check municipal registers and SHPO records |
| Property taxes and assessments | Affects carrying costs and ROI | Review current tax bills and any Mello-Roos/fees |
Confirming these will narrow the range of outcomes and protect you from emotional bidding.
The market context: why proximity to Union Station matters
Transit adjacency is a multiplier. You can think about it in three ways:
- Mobility premium: Being near a major intermodal hub reduces transportation friction for residents, employees, and visitors. That often commands higher rents and lowers turnover for residential and commercial tenants.
- Policy bias: Many municipalities prioritize density and mixed-use near transit for climate goals and congestion mitigation. That can result in favorable entitlements or incentives but also invites heightened scrutiny from community stakeholders.
- Competitive pressure: Institutional buyers and experienced developers chase transit-adjacent land. You’re not only bidding against local developers; you’re competing against national funds that will underwrite longer holding periods.
When you look at comparable sales, compare blocks, not citywide averages. The price per buildable square foot near transit often exceeds peripheral averages by a significant margin.
Zoning and entitlements: the levers you can pull
Land value is largely a function of what you can legally build. Zoning mechanisms to understand:
Base zoning
This tells you the permitted uses: residential, commercial, industrial, mixed-use. It also sets height limits, setbacks, lot coverage, and minimum parking.
Overlay zones and historic districts
Overlays can be your friend or your enemy. A transit-oriented development (TOD) overlay may increase allowable density but might require public benefits. A historic overlay can reduce buildable area or trigger expensive design review processes.
Conditional use permits and variances
These are discretionary tools. A successful CUP or variance depends on political capital, neighborhood support, and technical merit. You will need to budget both time and money.
Planned Unit Developments (PUDs)
A PUD can consolidate zoning flexibility for a comprehensive project, but it’s a negotiation with the city and often came with requirements for public amenities.
You should map the ideal zoning pathway and one fallback. The fallback is where you will live if politics or community engagement take longer than your financial runway allows.
Development scenarios and financial implications
Constructing a realistic financial model requires scenario planning. Below are three plausible pathways for a one-acre lot near a major Union Station. Assumptions are illustrative and must be replaced with local specifics early in due diligence.
| Scenario | Typical product | FAR / height | Estimated units / sf | Estimated total development cost* | Time to stabilize |
|---|---|---|---|---|---|
| Conservative | Mid-rise multifamily (6–8 stories) | 2.0 FAR | ~90–120 units | $25M–$40M | 3–4 years |
| Opportunistic | Mixed-use (retail ground, 8–12 stories residential) | 3.5 FAR | ~150–220 units + retail | $40M–$70M | 4–6 years |
| Aggressive | High-density TOD (tower, office + residential) | 6.0+ FAR | 300+ units / significant office | $80M+ | 5–8 years |
*Costs vary by region. Includes hard and soft costs, financing, and contingency.
For each scenario, run a residual land value calculation:
- Estimate stabilized NOI (for income-producing uses) or sales revenue (for condos).
- Subtract construction costs, fees, financing costs, developer profit, and contingency.
- The remainder is the feasible land value.
If the residual land value is below listed price (plus your target return), the property is not viable under that scenario.
Valuation methods you should use
Three valuation approaches will anchor your negotiation:
-
Comparable sales (market approach)
- Use recent sales of similar parcels near transit. Adjust for FAR, density, and entitlements.
- Strength: market-based. Weakness: often no true comps for transit-adjacent infill.
-
Residual land value (developer approach)
- Calculate backwards from a feasible development scheme to what the site can support.
- Strength: practical for developers. Weakness: sensitive to cost assumptions.
-
Income approach (if the lot already produces revenue or has a lease)
- Less applicable for vacant lots but relevant if you inherit revenue streams or if the market supports stabilized cap rates for the intended use.
You must triangulate these approaches. If all three converge within a reasonable band, you have a defensible bid. If they diverge wildly, you need to revisit assumptions.
Financing and capital stack considerations
Your capital structure will shape the project’s viability. Typical layers:
- Equity: Sponsor equity, preferred equity, JV partners.
- Mezzanine: Bridges gaps between senior debt and equity; higher cost.
- Senior debt: Construction loans tied to budgets and schedules.
- Permanent financing: Refinance at stabilization for multifamily or office.
Key lender concerns:
- Entitlement risk: lenders want clear pathways or will impose conditions.
- Pre-sales (for condos): lenders demand pre-sales thresholds.
- DSCR and LTC ratios: construction lenders usually lend up to 65–75% LTC depending on project type.
You must present lenders with realistic absorption and exit strategies. If you plan a condo conversion or speculative office in a soft market, expect stricter terms or higher rates.
Environmental and geotechnical realities
An acre near an old Union Station often carries layered histories: previous industrial uses, petroleum operations, or railroad-related storage. Environmental issues can destroy projects or escalate costs dramatically.
Your immediate actions:
- Order a Phase I Environmental Site Assessment (ESA) within 48–72 hours of LOI acceptance.
- If Phase I flags concerns, obtain a Phase II (subsurface testing).
- Commission geotechnical borings to check soil, groundwater, and any required remediation or foundation design.
Never assume “vacant” equals clean. Your indemnity and escrow holdbacks should account for latent contamination discovered post-closing.
Infrastructure: utilities, access, and mobility
A site near a major station may have fractured urban infrastructure—utilities might run under active rail tracks, and access could be constrained by arterial lanes. You need clear capacity letters for:
- Water and sewer (peak demand for kitchens, fire flow).
- Power (especially for mixed-use or office).
- Gas, fiber, and stormwater management.
Sometimes, utilities require off-site extensions or easement negotiations. Those costs can be material, so secure firm estimates early.
Community, politics, and social considerations
You must read the room—Union Station areas are visible and politically charged. Community groups, preservationists, and labor unions often have leverage.
Points to consider:
- Affordable housing expectations: many cities require inclusionary housing or cash-in-lieu.
- Public art or plaza requirements: city may demand public benefit for increased density.
- Construction impacts: coordinate staging, haul routes, and off-hours work to secure community buy-in.
- Workforce agreements: some cities require local hire or living wage commitments.
Address these proactively. The most expensive risk is political delay.
Due diligence checklist: what you must order and why
| Action item | Timeline | Why it matters |
|---|---|---|
| Preliminary title report | ASAP | Reveals liens, easements, and ownership defects |
| Boundary & topographic survey | 1–2 weeks | Confirms size, setbacks, and developable area |
| Phase I ESA | ASAP | Identifies environmental red flags |
| Phase II ESA | If Phase I flags | Confirms contamination and remediation needs |
| Geotechnical report | Early | Informs foundation and earthwork costs |
| Utility capacity letters | Early | Determines cost and feasibility of hookups |
| Zoning confirmation letter | Early | Clarifies allowable uses and requirements |
| Traffic impact analysis | Pre-entitlement | Required for parking and access planning |
| Market study / absorption analysis | Early | Validates demand and pricing assumptions |
| Historic and cultural resources review | If applicable | Triggers mitigation and review timelines |
| Survey of neighboring uses | Early | Informs competitive set and neighbor negotiations |
| Cost estimate & preliminary proforma | After studies | Creates baseline for financing and negotiation |
You should not skip any of these. Each reveals potential cost or time drivers. Treat the process as risk identification, not box-checking.
Negotiation tactics and deal structures
How you approach an offer will depend on your risk appetite and market competition.
- Non-refundable vs. refundable deposits: Use refundable deposits with milestone-based conversions for high-risk entitlements. If the market is hot and you want to beat competitors, non-refundable demonstrates seriousness but carries risk.
- Contingencies: Include contingencies for title, environmental, zoning entitlements, and financing. Be precise with cure periods and escrow timelines.
- Earnest money & option agreements: Consider an option to purchase that allows you time for due diligence with a capped purchase price.
- Seller financing or joint-venture incentives: If the seller wants upside, you can negotiate a seller carry or equity kicker.
- Purchase price adjustments: Tie price to achievable FAR or entitlements; propose a baseline price and adjustment clauses depending on successful approvals.
You must avoid emotional overbidding for strategic locations. Let data, not fear of competition, dictate your top-dollar.
Risk matrix: identify and quantify threats
You need a practical risk matrix that maps probability and consequence.
| Risk | Probability | Consequence | Mitigation |
|---|---|---|---|
| Environmental contamination discovered | Medium | Very High (remediation costs) | Phase I/II, escrow holdbacks |
| Entitlement denial or extended delays | Medium | High (carrying costs) | Pre-app meetings, community outreach |
| Utility capacity shortfalls | Low–Medium | Medium | Capacity letters, design alternatives |
| Community opposition | Medium | Medium–High | Early engagement, offer benefits |
| Cost escalation / labor shortages | High | High | Conservative contingencies, fixed-price contracts |
| Market downturn during construction | Medium | High | Conservative leverage, pre-leasing/sales thresholds |
Quantify these in your pro forma using scenario stress-testing. Model a 20–30% increase in costs and a 6–12 month entitlement delay to see if you still achieve your target returns.
Timeline: from LOI to stabilized asset
Expect the timeline to stretch beyond optimistic projections. A reasonable sequence:
- LOI and option period (30–90 days): Conduct Phase I, title review, & survey.
- Due diligence (60–120 days): Complete Phase II, geotech, utility confirmations, and market study.
- Entitlement process (6–24 months): Dependent on complexity and community process.
- Permitting (3–12 months): Building permits and agency approvals.
- Construction (12–36 months): Varies by scope and market.
- Lease-up / stabilization (12–36 months post-completion): For rental product; selling condos shortens stabilization but increases presales pressure.
This means you should expect at least 3–5 years from acquisition to stabilized multifamily product and longer for complex mixed-use or office projects.
Recommendations by buyer type
You are likely part of one of these categories. Each has a different optimal approach.
You are a developer
You should:
- Use residual land value to set your maximum bid.
- Build contingencies into both schedule and budget.
- Secure pre-development capital or JV partners to handle entitlement risks.
You are an institutional investor
You should:
- Consider a forward-commitment with an experienced local developer as sponsor.
- Pressure-test underwriting under stressed scenarios.
- Negotiate protections if entitlements drag or if construction costs spike.
You are a small investor/speculator
You should:
- Prefer an option agreement with a modest non-refundable payment.
- Avoid overpaying based on sentiment alone.
- Partner with technical advisors early.
You are a community-minded purchaser or nonprofit
You should:
- Leverage public incentives or tax abatements.
- Build strong community relationships early.
- Pursue grants or low-cost public financing where possible.
Practical negotiation example
Assume the lot is listed for $6,000,000. You run a conservative residual that yields a feasible land value of $4,500,000 for a mid-rise residential project that meets your required return. You could:
- Submit an LOI at $4,500,000 with a 60-day due diligence period.
- Offer a non-refundable deposit of 1% if the seller needs assurance, escalating to 3% once the Phase I and title are satisfactory.
- Include contingencies for Phase II, entitlements, and financing, with an option to extend for an additional fee.
- If the seller counters at $5,500,000, you can either walk or sweeten the offer with seller carry or an earnest-money structure that pays more upon entitlement approval.
The point is to make your offer reflect the true risk-adjusted value, not the seller’s hopes or media hype.
Social impact and ethical considerations
Your project will affect real people. Near Union Station, you will interact with commuters, small business owners, and residents. Ethical development practices are not just moral—they reduce friction and delay.
Actions to consider:
- Commit to a percentage of affordable units or an income-based targeting program.
- Fund local workforce training for construction jobs.
- Provide publicly accessible space or transit improvements.
These require budget allocation but can smooth approvals and generate goodwill. They also reduce the likelihood of costly litigation or protests.
Final checklist before you sign
- Confirm zoning and redevelopment incentives.
- Obtain Phase I ESA; secure Phase II if recommended.
- Commission boundary and topographic survey.
- Get utility capacity letters and quotes for off-site work.
- Produce a preliminary pro forma under three scenarios (conservative, base, aggressive).
- Secure financing term sheets or letters of interest.
- Engage local counsel and a trusted, local development partner if you’re an out-of-town buyer.
- Run a political risk assessment: which councilmembers, neighborhood groups, and city departments will influence approvals?
If you can’t check most of these boxes, you’re not ready to commit.
Conclusion: what you should do next
You are at a moment where possibility and risk meet. The headline about an acre near Union Station teases value, but it does not replace methodical work. Start with clean facts: legal description, zoning, survey, and Phase I. Build a conservative financial model, then create two fallback plans: one that reduces density and one that stretches the timeline.
If you proceed, protect yourself contractually. Use options and contingencies to buy time. Demand transparency from the seller about past site uses. Engage local civic stakeholders early and authentically. And when you project revenues and costs, stress-test every variable.
This parcel could be a singular opportunity—or a protracted liability. Your discipline, not the station’s fame, will determine which.