Commercial Real Estate in San Carlos: Industrial Districts, Labs, the Airport and El Camino Mixed Use

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

San Carlos is unusual on the Peninsula because so much of its commercial land is industrial: the flats east of the Caltrain line hold light industry, warehouses and a large cluster of R&D and life science buildings, with San Carlos Airport beside Highway 101. West of the tracks, Laurel Street’s downtown and El Camino Real carry retail, offices and new mixed-use housing. Each area runs under a different chapter of Title 18 of the Municipal Code, and the industrial chapter and the new Northeast Area Specific Plan were both revised in July 2026. Confirm the district with the San Carlos Planning Division before relying on this page.

Who controls the parcel

San Carlos is an incorporated city, and Title 18 of the Municipal Code is its zoning ordinance. Where an adopted specific plan applies, such as the Downtown Specific Plan or the Northeast Area Specific Plan, the plan’s land use rules take the place of the base district. San Carlos Airport is owned and run by San Mateo County, while the city zones the surrounding land under its own Airport district. Unincorporated County land touches the city near Devonshire and the hills; see our San Mateo County commercial guide.

San Carlos zoning for commercial, industrial and mixed use

The industrial flats, labs and the Northeast Area Specific Plan

Labs and life science. R&D is permitted in all four industrial districts, as is BSL-1 and BSL-2 lab work. BSL-3 and BSL-4 containment labs are not permitted in any industrial district, a limit to check before leasing to a high-containment tenant.

Offices. Business and professional offices are barred in IA, need a conditional use permit in IL and IH, and need only a minor use permit in IP. Medical and dental offices follow a similar pattern but are barred in IH as well as IA.

Retail and cannabis. General retail needs a minor use permit in every industrial district and is held to 1,000 square feet as an ancillary use unless a conditional use permit allows more. Cannabis dispensaries are barred in all four districts, while cannabis microbusinesses are permitted in IA, IL and IH.

No housing. The industrial use table lists no residential uses, and uses not listed or found similar are prohibited.

Northeast Area Specific Plan. Chapter 18.14.2, adopted by Ordinance 1636 in 2026, frames a long-term vision of a mixed-use district that blends traditional industry, innovation, environmental resilience and community life. Where the plan conflicts with Title 18, the plan controls. Its sub-districts, heights and densities are in the plan document, which we did not review, so buyers in the boundary should get the plan’s standards for their parcel.

San Carlos Airport and El Camino Real

Airport district. Chapter 18.09 aims to protect land around San Carlos Airport from operational hazards and noise. Only airports and heliports are permitted outright; hotels, restaurants with full bars, warehousing, research labs and prototype development need a minor or conditional use permit. Each permit requires a finding that the use supports or depends on the airport, or does not harm it through crowding, height or safety. Height must comply with the County’s airport plan for San Carlos Airport and may never exceed 50 feet, and sites must be at least 20,000 square feet.

Mixed-use corridors. Chapter 18.05, last amended in 2023, sets eleven mixed-use districts, each named for its maximum density. The downtown core calls for ground-level storefronts, and the North and South Boulevard districts on El Camino Real are the ones described as suited to hotels and regional-market retail. Cannabis dispensaries are not permitted in any mixed-use district.

SB 79 near the station. Under Chapter 18.25A, adopted by Ordinance 1634 in 2026, sites within a quarter mile of the Caltrain station zoned MU-DC-100, MU-D-120, MU-SC-120 or RM-100 are temporarily excluded from the state’s SB 79 transit-oriented standards. The city’s stated reason is that those zones already allow at least half the required intensity. The exclusion lasts until a year after the next housing element is adopted.

Transfer tax, business tax and property tax

The County Recorder charges documentary transfer tax at $0.55 per $500 of value, less assumed liens. San Carlos’s Chapter 3.20, adopted by Ordinance 651 in 1967, sets 27.5 cents per $500 under the state enabling law and is administered by the County Recorder. That law typically gives the city a share of the County rate rather than an added tax, and the Recorder names only the City of San Mateo as adding its own; confirm in escrow. Business registration is in Chapter 5.04 and hotel tax in Chapter 3.24; we did not verify rates. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in San Carlos

Start with our commercial due diligence checklist, then add:

• Confirm whether a specific plan overrides the base district.
• For lab tenants, confirm the biosafety level and hazardous materials permits.
• In IL, check whether the site is over an acre, which raises the FAR, and whether it borders an RS district, which lowers the height.
• Near the airport, check the County airport plan’s height and safety limits.
• For office users in IA, IL or IH, budget for use permit time or look at IP.
• Ask whether any new Northeast Area Specific Plan standards apply.

Questions people ask

Sources & notes

1. San Carlos Municipal Code (GoCodebook)
2. Chapter 18.07, Industrial Districts
3. Chapter 18.14.2, Northeast Area Specific Plan
4. Chapter 18.09, Airport District
5. Chapter 18.05, Mixed-Use Districts
6. Chapter 18.25A, SB 79 applicability
7. Chapter 3.20, Real Property Transfer Tax
8. San Mateo County Clerk-Recorder, documentary transfer tax

Note: We did not read Chapter 18.06 (commercial districts), the Downtown or Northeast Area Specific Plan documents, mixed-use heights and FARs, or business tax rates. The statement that the County operates San Carlos Airport is general knowledge, not from a source opened for this page. Whether the city transfer tax is credited within the County rate was inferred.

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

Related: San Carlos real estate guide · Multifamily property in San Carlos · Commercial real estate services