Investing in Land

In a May 24, 2010, the Malaysia Business Times reported that:

“WALTON International Group, a Canada-based real estate investment company, is calling on Malaysian retail investors to invest in pre-development land in Jackson County, Georgia in the US.

“Its senior vice president for marketing and training in Asia, Wyman Chan, said there are 161ha for investment, divided into 1,800 units or plots and the minimum investment for each is US$10,000 (RM33,200).

“‘We have sold 100 units worth more than US$1 million (RM3.32 million) since late April, when we launched the project in Asia. Up to 30 per cent of the investors are Malaysians. We are bullish to sell the remaining units by July this year,’ Chan told Business Times.”

Read more here. And here.

A recent Associated Press report on the most recent fluxuations in the stock market painted a stark picture:

“The 348-point, or 3.2 percent, drop on the Dow was the worst day for the index since February 2009 when the market was swooning and headed toward a 12-year low. The Dow has lost 631 points, or 5.7 percent, over the last three days.”

Just days later, CBS MarketWatch noted the rise in commodities, likely in response to volatility in the stock market:

“Gold futures inched up Monday after fluctuating for most of the session, with concerns about the global recovery ultimately gaining the upper hand.”

Of course there is no commodity that has held its value longer than land.  A number of companies have been at the forefront of making an investment in raw land accessible to a broad range of investors, but increased interest is being driven by uncertainty elsewhere.

As one blogger put it, “…land investment can produce good medium to long term returns and it can be one of the safest and smartest ways of investing your money, particularly if the land is located in an up and coming area.”

A number of blogs have sprung up examining the value of an investment in raw land.  Likely in response to the uncertainties of the stock market and a renewed interest in self-directed retirement investing, these outlets are diving into the approaches and methods that can best serve an individual’s planning.

These new sources supplement the more traditional opportunity and advice to be gained by working with companies, like Walton International,  with a history of raw land investing.  One of the new breed blogs blog had this to say recently about the matter:

“The value of land has been soaring over the years thus making it a highly profitable investment alternative. Because land is a finite commodity, it becomes more valuable as the years go by.  So if you want a stable medium to long-term investment that offers the potential to earn astounding returns, then why not consider a land investment?

“The continuously increasing population and migration of more people to towns and cities has brought about an ever increasing demand for housing.  Because of the growing population, there is a need for towns and cities to increase in size, thereby leading to mounting demand for the development of the surrounding land.  All these factors are what make land investment an appealing proposition.”

Read the rest of the story here.

Walton International Group Inc. and Walton Ontario Land L. P. 1 announced today that Walton Ontario Land L.P. 1 completed its initial public offering, raising gross proceeds of $18,555,500 and issuing 1,855,550 units.

Proceeds of the offering will be used to purchase and manage parcels of land comprised of 155 acres of land located near Toronto in Alliston, Ontario, and 300 acres of land located in the southwest quadrant of the City of Ottawa. The Partnership’s investment objective is to maximize returns to limited partners through the acquisition, management, concept planning and eventual sale of these two properties.

Read more here.

No two places could be as dissimilar than Grand Junction, Colorado and Escanaba, Michigan but each has seen the value of managing land development issues for both the future and the here and now.

In his year-end report, Escanaba City Manager Jim O’Toole said that “In this depressed time of land development, the city still experienced almost $4 million in improvements.”   As reported in the Escanaba Daily Press, “Though this figure is down compared to previous years, he said he was pleased to report what was accomplished during the poor economy.”

For a small town (population 13,000) along the water on the south short of Michigan’s Upper Peninsula, these numbers are nothing to sneeze at!

A little further south sits Grand Junction, Colorado.  A little higher (about a mile above sea level), a little bigger (population 43,000) and a little drier (locked among Colorado, Idaho, Arizona and New Mexico), it too found value in dealing actively with land development.

As reported in the Grand Junction Free Press, the Mesa County governing body is helping to address its micro needs with some macro changes.  According to County Commissioner Craig Meis,  “In this economy, we feel your pain.  We’re sharpening our pencils to find ways to help by cutting county taxes and fees.”

Key though was the link between making changes that have an effect now and in the future.  “As a business owner himself, Meis has spearheaded this effort called ‘Open for Business,’ identifying key areas where business expansion could be encouraged, and obstacles to growth eliminated.”

Forward thinking and land development have been synonomous for a large group of companies who are committed to helping cities like Escanba and Grand Junction get the most of their real estate.  Companies like Walton International have, for more than 30 years, been just that kind of partner to communities.

It looks like it is paying off.

It may be 75 miles from Greensboro, North Carolina to Cary (a suburb to the Tar Heel State’s capital of Raleigh) but the two towns are in synch on the need to create clearer and accessible land development guidelines.  Whatever the current state of the economy, City leaders and citizens are looking to the future.

In Greensboro, according to the News-Record, an update of the city’s land development rules is headed to the City Council for approval.  “The goal of the rewrite is to make the ordinance easier to understand and use for everyone, from developers to residents affected by re zonings.”

In Cary, the process is not as far along, but is headed in the same direction.  According to the Cary Citizen newspaper a set of town hall meetings are being held that “will be used to further revise the proposed draft plan before the county or the town hold official public hearings in Spring 2010…”

In keeping with the move to regionalize development plans, the Cary eff0rt is being done in conjunction with Chatham County.

It is about 800 miles from Round Rock, Texas (hard by Austin) and Avon, Colorado (as close to Vail) but the air the leaders of each city are breathing must be the same.  In recent days, each has stepped up its efforts to participate more fully — and thoughtfully — in planning for the future of development.  Long a product of the expertise of companies like Walton International, development is becoming a team sport.

In Avon, there is a new community development director and assistant town manager.  Here is how the new hire was described:

“We believe (her) experience will help Avon move forward with its long-term goals such as developing the east and west town centers, affordable housing and improving our overall land use and planning practices,” said (the) Town Manager.

In Round Rock, it is not just a focus on the people, but the plan to make development happen.  As they put it:

“The City of Round Rock in early 2009 began work on improving its land development processes. This effort is part of the City’s overall philosophy of continuous improvement, and builds on previous efforts to streamline the land development process.”

The city of Greensboro, North Carolina is in the midst or re-thinking its development future.  The program, called “Connections 2025,” seeks, according to local media reports, to provide “more flexibility on standards and encourages more urban infill and mixed-use developments…”

The program’s mission is stated clearly:

“Our Vision of Greensboro and its environs in the Year 2025 is one in which the City is recognized throughout the nation as an exceptional place in which to live, work, play and nurture future generations. It is this exceptional livability which defines our identity, contributes to our civic pride, and offers opportunities for all to participate fully in community life. We have achieved our vision by retaining and building on our heritage, embracing positive growth and change, and by balancing our priorities.”

The key point is made by “embracing positive growth.”

“Smart” is not at odds with “growth” in Greensboro.  There is a chance that in other cities, the need to The need to grow smart is not at odds

The first thing I ever heard about Phoenix was that it was hot.  But, quickly added, it was a dry heat.  According to recent reports, development in Arizona’s Valley of the Sun is heating up once again.  Perhaps in advance of the rest of the nation’s housing market.

The Arizona Republic, in reporting on the “2050 Vision for the Valley,” starts out this way:  “Picture new Phoenix-size cities beyond the mountains to the far south and west of the Valley, and you get a glimpse of how the region’s future might unfold over the next half-century.”  Phoenix-size cities?  Phoenix proper has 1.6 million residents.

Many of the details can be found in the activity reports of the Maricopa (County) Association of Governments.

For development companies, like Walton International,  that focus on raw land investing the move by local government organizations to set a path for growth is good news.

A recent story in the Calgary, Alberta, Canada Herald highlighted a subtle but significant shift in the approach one developer is taking to meet its needs and the needs of the market.  Even as signs of life in the housing market begin to surface, particularly in places like Texas, developers and land investment firms are open to new things.

The Herald story focused on Walton Development and Management, a unit of long-standing, raw land investment company, Walton International.  Both are based in Calgary.   Here is the nub of the story:

“‘This spring, we made the decision to essentially lower our lot pricing,’ says John Plastiris, president of the fledgling company under Walton International.

‘In part, it was because it was a new community and we wanted to achieve momentum and an increase in the northeast market share. It’s a value and price-driven market.’”

It is refreshing to see companies open to change in the face of changed circumstances.  Let’s keep an eye out for a trend.