Investing in Land

Between Buffalo and Detroit is a wide swath of Southern Ontario Canada where land development issues and opportunities are on the rise.

As reported in the region’s Brantford Expositor, a “…Comprehensive Review of Employment Lands, presented to the planning advisory committee, argues in a detailed, zone-by-zone analysis that major swaths of mainly farmland currently designated industrial
or commercial in the county’s official plan are in places that aren’t practical for development. They are not on major roads, it points out,. Or, it wouldn’t be efficient to install expensive infrastructure services to develop them.”

What is striking is the symmetry between good local decisions and good strategic decisions.  Investing in raw land is all about vision.

A “Special Investor’s Issue” of Fortune Magazine is out this week with a word about land from Lord Jacob Rothschild.  He says:

“If you look at the macro picture today,” says Rothschild, “we have an extraordinary situation. If you take governments’ printing money as fast as they are, borrowing as fast as they are, and bailing out white-elephant corporations, we’re surely going to have an inflationary situation fairly soon.” In that kind of environment, owning a hard asset like land is a good hedge.”

Here is a link to the full story.

In any new venture, like this blog, it is important to find allies — or at least people who are thinking along the same lines.  It is one thing to be on the leading edge, but quite another to be out there along on what cynics might call the “bleeding edge.”

As media and analysis moves from print to the web, there is a growing universe of information and advice to be found.  On a recent trip, I found this.

In an article on the link between land and financial returns, it says, in part: “Investing in raw land brings its best return when the land lies along a path of expanding economic growth and prosperity. But such expansion is not guaranteed, and its path can often change directions. Increases in land value are virtually always dependent upon the land’s future use, economic growth, and demographics, which all boil down to the fundamental law of supply and demand.”

So, while every one can see the land spread out before them, the best partners are those who best forecast its “future use.”  A company with which I am affiliated has a pretty good model and track record for such foresight.   Who would you nominate?

It may seem an odd time to launch a blog on investing and even more so to promote that investment in land.

What with the global economic dislocation and distress buffeting markets and governments there is a flight to nothing as much as stability.  But where is that?  With the financial news in print and on television creating a-near hypnotic, minute-by-minute focus on global stock markets, there is a chance that we might miss the road signs.  LandInvesting.biz hopes to draw you attention to one, very key one.

In a review of author and Professor Niall Ferguson’s 2008 book, “The Ascent of Money: A Financial History of the World,” was this bit of insight made more urgent by the distress in the global securities markets.  “Land and the buildings on it—or in modern parlance ‘bricks and mortar’—have played a crucial part in the development of the financial (and economic) system, because ‘the land can’t run away,’ and is therefore easy to use as collateral.”

To our eye, this suggests that at a time when investors’ are making hard decisions about what to hold, what to buy and what to shed, it might be worth taking a longer look at the long-term benefit that can attach to investing in land.

Let us know what you think.