Commercial real estate comprises many different categories: offi ce, industrial, retail, multifamily and more, all serving different needs and aspects of everyday life. What they all have in common is land underneath the buildings. Often neglected as an investment in CRE, land — be raw land, vacant land or a vacant lot — poses one of the greatest wealth-building opportunities today.
The United States has a total of some of 2.26 billion acres of land, with 1.2 billion in agricultural uses. Undeveloped properties are located in rural and even urban areas — and not much more is being made. More than ever before, undeveloped land is available for sale because of two major sellers: Baby Boomers and the federal government.
Now entering or well into their Golden Years, many Boomers are looking toward comfortable retirements and estate planning. They may be looking to monetize their property, avoid family disputes during their lifetimes or after, or give up the time and effort of maintaining the land, made ever more diffi cult due to climate change. The result is the greatest transfer of wealth in history, expected to be ongoing until 2045.
Their holdings, however pale in comparison to those of the U.S. Government, the largest owner of undeveloped land in the country. While legislation has mandated that many parcels can never be developed, and others are impractical for building, the government does hold periodic sales of developed and undeveloped land, especially in the West. And pending legislation may increase the acreage available for sale. Regardless of the source, undeveloped land can be a wise investment for developers, homeowners, preservationists or those looking for long-term appreciation. Taking advantage of these opportunities requires knowledge, persistence and patience, but these empty acres can be the beginning of new cities, resorts, campgrounds or more.
After all, many new developments start with empty land.
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