ATLANTA (March 31, 2010) While this blog is nationally focused, the Atlanta based land team at Cushman & Wakefield produces a city newsletter that is truly a microcosm of land prices across the country.
Some key points from their newsletter which can be found in full here:
- Deals are getting done. They may be taking longer, generating less money for all parties, and making everyone feel like they’re at war during the process, but they are getting done.
- Sellers mostly come in a few different forms: lenders disposing of non-performing notes, lenders selling foreclosed properties, or borrowers working with their lenders to agree to a short sale.
- Today’s list of true buyers consist of national builders, local investors, and dealmakers placing money out of New York, Chicago, Texas oil fields, or from overseas.
- Of note, they have seen very few quality commercial sites come up for foreclosure, and expect it to take time before commercial land values reset, as residential sites seem to have done.
- Raw land remains difficult to move due to high return requirements from equity sources, rising vacancy rates, declining rental rates, and little to no job growth. While no one is certain we have hit the bottom, most land experts agree this is one of the best times ever to be buying land.
- Going forward, they foresee a continued rise in residential permits, with some commercial land trading toward the end of 2010.
Why do tenants care about land? Because so goes land, so goes the development pipeline. And when developers are developing, there is new product available which has the side benefit of maintaining pressure on rents.
Conversely, the entire system has been mucked up for the past 18 months so very little new product of any flavor has kicked off.
The Dirt Talk report is one more sign that we are emerging from the doldrums and into a more normal time in the real estate industry. See, you never knew that good news could come from talking dirt!
Source: Pierce Owings, C&W Atlanta/Dirt Talk Newsletter