If you are an investor looking for a great piece of property or if you’re a corporate officer looking for land on which to build a new facility, a qualified land professional can be a source of valued expertise and assistance.
According to the Realtors Land Institute, land buyers and investors generally need more than a licensed real estate agent. Specifically, they would need a land professional.
Jim Riggert, a Senior Vice President in Grubb & Ellis Company’s Dallas office, says that specialized experts understand the intricacies of land transactions and can provide the kind of guidance to achieve investment satisfaction.
“In Dallas, many investors bought land in the path of growth along the Dallas North Tollway (DNT),” he says. “That’s a story that everybody in Dallas real estate knows and understands.”
Some of the services a land professional can provide include locating your ideal property, providing expertise and recommendations, exploring investment opportunities and options, and achieving maximum return on investment.
Smart Business talked to Riggert about these services and more.
How would a land professional structure a deal for a business that needs to sell investment properties?
Land developers often ask a land professional to list some of their properties for sale. Many single family land developers have a lot of inventory right now and need to ‘rearrange their balance sheet’ and sell some land. These developers could be a big public company or a local land developer. They’re the people that a successful land professional will have established a personal relationship with. Some of my clients have builders that have cancelled their lot contracts on several subdivisions. Some would now like to sell land and get it off their balance sheets.
On the other hand, land professionals also have relationships with land investors and land funds that are eager to purchase land at a discount. I am currently working with several well-capitalized land funds that I am showing investment opportunities to throughout Texas. They are able to perform very short due diligence and close quickly as the opportunities come available.
How would a land professional assist a company that needs to expand or relocate to the Dallas area?
Dallas is still a vibrant economy. The company looking to expand its business needs someone who knows where the best fit locations are. When that company calls, the land professional would then initiate a conversation with their real estate community and/or members of the local and regional economic development commissions. Some factors in choosing the right land sites are proximity to the company’s employee base, traffic volumes and good access to airports. Other factors are proximity to retail and educational facilities in the area.
Another function of a land professional is identifying a specific site with enough acreage for a new corporate headquarters or manufacturing plant. For example, Kit Corbin in our San Antonio office got a call from the local economic development entity to locate more than 1,200 acres for the new Toyota Tundra plant. It ended up being a 2,000 acre assemblage with tax incentives from the state and local municipalities.
Where is the growth in northern Texas, and why would you recommend investing in it?
An investor needs to target areas that have strong historical growth. And Dallas’ population and job totals are still growing. For instance, when LBJ Freeway was being built, adjacent land near the future DNT cost $1.05 per square foot. In 2006, a property in the same area sold for $38.50 per square foot. It’s no secret that Dallas growth follows the Dallas North Tollway, which is the ‘straw that stirs the drink’ in North Texas. Plans have already been made for a northern extension of the Dallas North Tollway from U.S. Highway 380, where it currently ends. There are plans for a regional mall at this intersection and property has traded for $11 per square foot in 2007.
The two-lane northbound service road to FM 428 is complete. This is Phase 4A for the North Texas Turnpike Authority (NTTA). Phase 4B plans to extend the DNT north along the Collin/Denton County line into and through Grayson County Phase 5. Property at the intersection of FM 428 and the service road have traded at $2.25 per square foot. One of my clients has a 744 acre property just to the west on the Collin/Denton County line and another 1,027 acre property in Denton County that the Outer Loop will eventually bisect.
If an investor wants to identify land sites that will eventually be sold for single family homes, offices or retail, the best opportunities are those that fall in the path of the future DNT.
JIM RIGGERT is Senior Vice President at Grubb & Ellis Company. Reach him at (972) 450-3265 or firstname.lastname@example.org.