As I begin my planning for 2012, I am taking a final look at 2011. Today, I analyzed Commercial Land Sales for last year. Here is what I found:
The Numbers
For all of 2011, KCREA recorded 30 land sales for a total of 1020.25 Acres selling at $9,811,546. The average parcel size was 34 acres and average sales price per acre was $9,683. The average transaction size was $338,329. Median parcel size was 4.86 acres and median dollar value of a transaction was $226,250.
The largest transaction in terms of dollar value and also tract size was a 410 acre parcel in New Washington, Indiana which sold for $1,300,000. The smallest transaction in terms of dollar value and tract size was a 0.06 acre tract in downtown Louisville which sold for $10,000.
This amounts to 8 transactions totaling $1,990,000 in 4th Quarter 2011 for an average transaction of $248,750.
What this means
If you are looking at the numbers alone, 2011 was another draught for Commercial Land and Development, in general. With only 30 total transactions recorded for the year, one would expect only 2.5 land sales in any given month. Looking at the average price of property sold, you would also conclude that the vast majority of the land sold was unimproved land which was not ready for development.
Development is a highly leveraged business so that when it goes well, the payoff is great but if it doesn't go well, the possibility of loss is also magnified. It is well known that many Developers went out of business in this recession and that many remain under water. The Developers remaining are far more cautious, both because of their risk aversion as well as that of their lenders. In this environment, we should expect the recovery for Land to progress slowly.
Still, as I mention in November, there are beginning to be some encouraging signs. The number of calls on land is up. And although these transactions did not go through, I had respectable offers on three separate parcels of land I have listed in the last quarter of 2011. I am also aware of some new plans for some decent sized developments that are in the works for 2012.
The things that I expect to move in 2012 are parcels that are competitively priced, already zoned properly and have infrastructure in place.
Anyway, I am looking forward to a good year in 2012. Have a great day, everyone. Thanks for reading.
Notes and Disclaimers and such -
If you know of anyone who would like help with real estate, give me a call. I am licensed in Kentucky and Indiana. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Investment and Retail properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck, I can even set you up with some help for residential property if you need it.
The Information presented here comes from KCREA (Kentucky Commercial Real Estate Alliance) data base. This information is dependent on the individual members keeping it current and accurate. It is not a census of all commercial transactions. It contains only the information of the members of KCREA and other who contribute. As such, I cannot guarantee its accuracy. Still I believe that it is a good indicator of activity and is useful to examine.Also, I am sure that my broker would appreciate me clarifying that the views represented here are my own and do not necessarily represent the views of Commonwealth Commercial Real Estate, its brokers, agents, or employees (other than me of course). Should you wish to comment on this post or to offer another opinion, you may feel free to do so in the comments section. What you should not feel free to do however, is to make any inappropriate or offensive comments. Should I encounter any such comments, I will exercise my right to delete them.
Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz
www.ccre.biz
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