Commercial Real Estate in Milpitas: Industrial Parks, Metro Mixed Use and the 2025 Zoning Code

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Much of Milpitas’s commercial land is industrial and research property, with business parks and manufacturing buildings along the I-880 and McCarthy Boulevard corridors, shopping centers on Calaveras and Landess, highway services near the freeways, and a dense mixed-use district around the Milpitas transit station and the Great Mall. The city rewrote its zoning code in 2025, so older zoning letters, permits and broker packages may cite districts or standards that no longer apply. Confirm the current zone for each parcel with the City of Milpitas Planning Division before relying on this page.

Who controls the parcel

Milpitas is an incorporated city, and Title XIII of the Milpitas Municipal Code is its zoning ordinance. The commercial, industrial and Metro chapters were all adopted or restated by Ordinance 38.858 on September 2, 2025. Uses that a table does not list, and that are not substantially similar to a listed use, are prohibited unless the Planning Commission grants a conditional use permit, which makes use classification an early diligence item. Unincorporated County land lies in the eastern foothills, where County rules apply; see our Santa Clara County commercial guide.

Milpitas zoning for commercial and industrial use

Industrial and R&D: what goes where

The industrial table answers several questions that come up in nearly every Milpitas lease or sale.

• Data centers. Permitted in M1, MP and BPRD, but not allowed in M2.
• Warehousing and distribution. Permitted in M1, M2 and MP. In BPRD, warehouses are permitted up to 200,000 square feet; larger ones need a conditional use permit and a finding tied to high-tech sector growth.
• Retail in industrial zones. Large-format retail is permitted in M1 and MP and conditional in M2, but not allowed in BPRD, where limited retail is accessory only.
• Assembly and child care. Community assembly uses such as churches and event spaces are barred in M2 and BPRD and conditional elsewhere. Child care centers need a minor conditional use permit in MP and BPRD and are not allowed in M1 or M2.
• Housing. Only a caretaker’s residence, conditional in M1 and M2.
• Large projects. Buildings over 80,000 gross square feet face added site design requirements, and BPRD has its own building design rules. BPRD also has a minimum FAR of 0.35, which can affect a plan to keep a low-rise building with surface parking on a redeveloped site.

Shopping centers, offices and highway services

C2 general commercial covers community-wide shopping, including major centers. Hotels, indoor entertainment, large-format retail, service stations and vehicle rental are permitted; bars, nightclubs, outdoor entertainment and motels are conditional. The 35-foot height limit can rise to 75 feet and six stories with a Planning Commission site development permit and step-backs.

C1 neighborhood commercial has the highest commercial FAR at 0.75. Convenience stores and alcohol sales need a conditional use permit there.

HS highway services permits hotels, motels and fleet-based services, and allows single room occupancy residences by conditional use permit.

Near homes. Within 500 feet of R1 or R2 zones, the code’s notes cap height at 30 feet and two and a half stories. Most uses must operate inside enclosed buildings unless specifically allowed.

The Metro area around the transit station

The Metro Specific Plan zones mix housing, retail and jobs. MXD2-Metro puts retail, restaurants and entertainment on the ground floor with homes or offices above, at 40 to 85 units per gross acre. MXD3-Metro allows very high density housing, retail and employment at 85 to 250 units per acre. On Activity Streets shown in the plan, at least 80% of each blockface in those zones must be ground-floor retail or other active uses. BPRD-R-Metro and BPRD-Metro keep business park and R&D employment, with limited housing in the BPRD-R variant. For an investor, the Metro zones mean a retail pad or older industrial building can carry substantial redevelopment value, but also a mandatory active ground floor.

Transfer tax, business tax and property tax

Milpitas levies a documentary stamp tax under Title IX, Chapter 10, adopted by Ordinance 140 on November 21, 1967: 27.5 cents per $500 of consideration above $100, administered by the County Recorder under the state Documentary Transfer Tax Act. The County Ordinance Code Div. A30, Ch. III sets the County tax at $0.55 per $500 and, in §A30-40, credits a conforming city tax set at half that rate, so the city’s 27.5 cents is shared within the County’s $0.55 rather than added; confirm the total on the escrow estimate. A change of ownership generally triggers Proposition 13 reassessment. Businesses need a city business license under Title III, Chapter 1, and hotels collect transient occupancy tax under Title III, Chapter 13; we did not verify rates.

Due diligence that matters in Milpitas

Start with our commercial due diligence checklist, then add:

• Confirm the zone under the 2025 code, not an older zoning letter.
• Classify the intended use; unlisted uses need a similar-use determination or a conditional use permit.
• For data center, warehouse or assembly users, check the zone-by-zone table before signing.
• Measure existing floor area against FAR, including BPRD’s minimum.
• Within 500 feet of R1 or R2, plan around the 30-foot height limit.
• In Metro zones, confirm whether the frontage is an Activity Street with the 80% active use rule.

Questions people ask

Sources & notes

1. Milpitas Title XIII, Zoning (GoCodebook)
2. Chapter B.6, Commercial Zones and Standards
3. Chapter B.10, Industrial Zones and Standards
4. Chapter B.12, Metro Specific Plan Zones and Standards
5. Title IX, Chapter 10, Documentary Stamp Tax
6. Santa Clara County Ordinance Code, Division A30, Chapter III, Real Property Transfer Tax

Note: We did not review Chapter B.16 (Milpitas Commercial Specific Plan Area), overlay zones, Metro height and FAR standards, or business license and TOT rates. Corridor and landmark names are general descriptions. The 500-foot height rule is stated in the table notes for C2 and HS; confirm its reach.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

Related: Milpitas real estate guide · Multifamily property in Milpitas · Commercial real estate services