Commercial Come Back Already?

Is SKY The Limit Again?

In California a builder/developer disclosed last week that it entered into an arrangement to purchase 468 acres of raw land in northern San Diego County over the next two years.

So is this the latest indication that builders believe the California housing market is making a comeback?

The $150 million transaction, is the biggest land deal since the market’s 2006 crash, and this developer has committed to spend about $300 million for 4,600 lots so far this year.

If you remember during the housing’s heyday, California was the most profitable market for many home builders because prices were higher than in most other regions.

It isn’t surprising that builders would be angling to get a front-row seat in that market, particularly in areas where building-lot supply is low.

They had to renegotiate with each of the 11 land owners. Had a single owner held out, the deal would never have got done.

Here’s the lesson: They secured the land with an option, or the right to purchase the land in as long as two years, when the housing market is likely to be in better shape. Including land development, the price should be about $150 million.

The 4,600 cottage-style homes will be priced from about $350,000 to approximately $1 million… you do the math!

To learn more in person I’m teaching a very special event in Las Vegas October 1st – 3rd on Commercial real estate investing the right way!

Click here

To your success,

Terry