- Sales of developable land increased by 64% year-over-year in H1'11 to $3.2 billion. Though that's still below growth for other property sectors, increasing volume in this sector indicates some loosening of what has seemed a near moratorium on development.
- As in the broader market, investors have focused on multifamily and CBD sites in primary markets. Prices for land have fallen farther than for all other property types, and lenders are still achieving lower recovery rates on average for land than in other sectors. Nonetheless, well-located land has achieved close to peak-era pricing as well as recovery rates that are closer to the average rates for other property types.
to me, this is not unexpected. developers have always been the real risk takers in our industry. through exhaustive market research (sometimes) they determine that a piece of property has potential. when they’re right, it’s a big win. when they’re wrong, well, it’s a problem. real estate has always been a game of deep pockets, deep enough to ride out the storms that affect absorption of houses, apartments, office, retail and industrial space, what have you. and with a renewed optimism about things, it’s not surprising that development sites are hot again. and, if you were trained, like i was, that the upside is made on the buy, prices like these are probably very tempting. who is lending money for development sites i’m not sure about but there are more pockets of money these days than the traditional sources, deep or otherwise, which have a higher threshold of risk (although there will come a day of reckoning when they’ll have to face their investors…either with a check, a bill or the news that they had to give the property back).
there is one thing that i would like to share with you today: in the summer of 2008, when i was thinking about the next step in my career, i read a bunch and summarized of books. these days i've been thinking about me waking up one day, just after my 106th birthday, and feeling, ‘i shoulda done this or i shoulda done that or i shoulda…..’ i’m sure some of you know those feelings. so here are a few things from some of the stuff i've read (and in some cases been re-reading) that have struck me this week:
- it’s human nature for people to take precisely as much interest in you as they believe you’re taking in them. there is no stronger way to build relationships than taking a genuine interest in other human beings and allowing them to share their stories.
- everyone should start at ground zero. they should ask, ‘is this viable anymore? is this what the world wants?”
- having a vision is not enough; if you fail to envision the potential of your creation, it will be left for others to exploit. what you need is a vision and the ability to develop a strategy to achieve it.
- “if a man has a talent and cannot use it, he has failed.” thomas wolfe
- “what you can do or think you can do, begin it. for boldness has magic, power and genius in it.” goethe
- "if you let them, things just happen in the right way, at the right time. at least they do when you let them, when you work with circumstances instead of saying, “this isn’t supposed to be happening this way, “ and trying hard to make it happen some other way. if you’re in tune with The Way Things Work, then they work the way they need to, no matter what you may think about it at the time. later on, you can look back and say, “oh, now I understand. that had to happen so those could happen and those had to happen in order for this to happen….” then you realize that even if you’d tried to make it all turn out perfectly, you couldn’t have done better and if you’d really tried, you would have made a mess of the whole thing.” the tao of pooh
Ft. Atkinson, WI
Fort Wayne, IN
New York, NY
La Grange , TX
aug. 15-19: new york
sept. 12-16: new york
sept. 20-21: amsterdam to moderate a panel at the PERE Global Forum