Land

Raw land to serviced lots: residual land value, entitlement risk, and highest-and-best-use analysis.

Property Types

  • Raw / unserviced land
  • Serviced development land (shovel-ready)
  • Land assembly (consolidated parcels)
  • Brownfield (formerly contaminated / industrial)
  • Greenfield (undeveloped on urban fringe)
  • Agricultural land (with development potential)

Physical Attributes

  • Lot size, dimensions, and configuration (frontage, depth, irregular shape)
  • Servicing availability: municipal water, sewer, power, gas at lot line
  • Zoning designation and permitted uses, FAR, height limits, setbacks
  • Topography, slope, and soil conditions (bearing capacity, contamination history)
  • Environmental constraints: floodplain, wetlands, endangered species habitat

Value-Add

  • Entitlement: rezoning or OPA amendment to higher-density designation
  • Land assembly: acquiring adjacent parcels to create a larger developable site
  • Servicing extension: funding municipal infrastructure to unlock building permits
  • Environmental remediation: brownfield cleanup to remove development constraints
  • Pre-application and community engagement to de-risk the entitlement timeline

Appraisal Approach

  • Residual land value: project revenue minus construction costs, profit, and finance charges
  • Sales comparison using price-per-acre or price-per-buildable-SF / density unit
  • Hypothetical condition or prospective value opinion for pre-entitlement sites
  • Subdivision / land development approach for multi-lot residential projects

Management

  • Carrying cost management: property tax, insurance, weed/snow control
  • Permit and entitlement timeline management with municipal planners
  • Environmental monitoring obligations during remediation or interim hold
  • Security and encroachment prevention on larger vacant sites

Strategic Concepts

  • Land banking: acquiring ahead of urban growth boundaries and holding for density uplift
  • Entitlement risk: gap between purchase price on zoned vs unzoned basis
  • Highest-and-best-use analysis determines which permitted use maximizes residual value
  • Absorption and phasing strategy for large subdivision or master-planned releases
  • Optionality: land purchase options as a lower-capital entitlement strategy

Related topics

Highest and Best Use in CRE ValuationZoning Variance in CRE DevelopmentPro Forma Analysis in Commercial Real EstateDCF Valuation in Commercial Real EstateProperty Condition Assessment in CRE Due DiligenceEntitlements and Zoning Approvals in CRE Development
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