Because improved land is hard to come by, more investors and developers are evaluating true greenfield opportunities in far outer rings of major markets.
By Lee Loftis | Featured in Area Development
Across the nation, finding well-positioned, developable land with utilities and infrastructure has become almost impossible in some areas. Just about all of it has been scooped up by hungry buyers. Competition for land zoned for industrial/warehouse development is particularly intense.
Owners with any inclination of selling have already done so, or their land is under contract. For the owners still holding onto their land, the question is, what will entice them to finally sell? Buyers would be wrong to assume it’s all about price. The market has reached a remarkable level of efficiency when it comes to pricing, and developers know exactly how much they’re willing to offer for a piece of land based on construction costs and lease rates.
Many sellers, driven by concerns about capital gains taxes, have put land under contract stipulating a closing by year-end. Though many buyers have agreed, it will be interesting to see how many are truly able to close. If those deals fall through, opportunities might arise in first quarter 2022. Successful developers who are closely attuned to the market will be able to strike quickly and capitalize on these unclosed deals.