8000m2 mixed-use commercial area - how to best utilize it?

Hello everyone

The following situation: my parents have a plot of land of about 8000m2 (of which about 6500m2 is within the building boundary) in a suburb of a medium-sized city (a bit less than 100,000 inhabitants) in a metropolitan area. Currently, they operate, among other things, a gas station here. However, they now want to retire and end the business. The question now is: what do we do with the land? It is mixed-use commercial (up to 3 full floors, 1.2 floor area ratio, 0.6 site coverage ratio). From my perspective, there are four options: - sell the entire plot (in total or in parts) - rent or lease - use the land itself for commercial/real estate purposes - a mix of options 1 - 3

My favorite so far: lease about half to a retailer (long term, secure income - there is principal interest from several large chains). Build one or more residential complexes with as much living space as possible on the other half and then rent them out (conceivable e.g. 40 units on 3500 - 4000 m2, rental index about €8.5).

Of course, we could also simply sell (official standard land value about €250), but I am attracted to the long-term wealth building of residential properties combined with steady income.

What I would now like from you:

- what are your general thoughts on the project? Would you prefer a different scenario? Why? - Specifically regarding the option with your own residential complex: what should I watch out for? Who should I best talk to about this? - Where can I find general information on the economical construction and operation of such a residential complex? What costs per m2 can I expect when building at the given scale? - What is a conceivable timeline from now until completion of the first / all buildings? - can I basically buy a residential complex of this size turnkey? What workload will nonetheless come to me as the owner during the planning and construction phase? - Are the details on the floor area ratio only valid for the area within the building boundary, or is the total plot the basis?

I know these are many questions, but as you can see I am still at the very beginning of my considerations and look forward to the discussion with you. Thanks in advance for your feedback.

Question for you: Can you secure financing of €12-15 million? Is your bonus sufficient for a cost overrun guarantee of €1.5 million? Can you manage property administration? Do you trust yourself to do this?

You can then continue to work on the topic.

If not, sell everything to a project developer.

Question for you: Can you obtain financing of €12-15 million? Is your bonus sufficient for a cost overrun guarantee of €1.5 million? Can you manage property administration? Do you feel capable of this?

You can then continue to deal with the issue.

If not, sell everything to a project developer.

Hello nordanney,


Thank you for your quick response. Of course, I need to clarify the financing. In principle, from my point of view, it is covered by the rental income. Own equity capital is available in the mid six-figure range. Possibly, I could obtain additional funds mostly from the immediate vicinity.


Selling is the worst option for me. The property has been in our possession for several generations. Just because the current business model is not future-proof, I do not want to sell it. I would rather proceed in small construction phases (maybe 10 residential units) or lease the entire property.


My previous experience is limited to a purchased and managed 6-family house. For the intended size, I would at least want to outsource part of it.

One idea would be to look for a project developer who, in exchange for the [Grundstück], grants you a certain number of apartments. There are models that optimize the [Grunderwerbsteuer] in this process. Seek advice from the notary you trust. Additionally, you might possibly "buy in" with additional assets with the developer to increase the number of your apartments. I think with 8000 m2 there could be investors willing to engage in something like this.

If financing a large project is feasible, marketing it independently to tenants is a sustainable model. A large number of units minimizes the risks associated with rental defaults; this also applies to commercial spaces: better several smaller ones than a few larger ones (of course, this must be clarified depending on location, supply, and demand). Knowledge of marketing and management is indispensable but can be purchased and learned. The possible size of the property is sufficient to do this full-time. Initially very stressful, but quite comfortable in the long term.