High Growth Land

It is desirable to invest in high growth land that is relatively close to the point in time that it will be purchased by the final user. This emphasizes the critical importance of timing in land investment.

High growth land is known for intense speculation and development activities wherein investors expect changes in land use relatively soon, like re-zoning agricultural land for residential, commercial, or industrial purposes. Land values surge rapidly during this stage. The peak of this value growth is reached when the economics no longer support further increases in value. For instance, housing developers may realize it’s only viable to pay $25,000 per acre for land meant for subdivision into homesites, which can then be sold for $100,000 each based on the area’s property values.

The key to successful land investment lies in being able to identify the onset of a high growth phase. If land is purchased too early, it may take a long time before it appreciates significantly in value. Conversely, waiting too long to invest may result in a lower appreciation rate and potentially not achieving a satisfactory return on investment. Recognizing the right time to invest in land involves researching local plans, having a good understanding of the area, and using common sense to assess the likelihood of development based on various factors such as topography, growth rate, transportation systems, zoning, land values, soil conditions, drainage, utilities, and other relevant considerations.

Land Ownership

We believe land ownership should be widespread and viewed as a stable, secure investment that plays a crucial role in long-term financial planning.

1. Universal Ownership: Everyone should own land, we believe it should be a fundamental right or opportunity.

2. Investment Stability: Land is a stable investment compared to the more volatile stock and bond markets. A lands illiquidity contributes to its value by ensuring its presence and reliability over time.

3. Long-term Wealth Planning: Owning land is a part of a long-term wealth planning strategy. It is a foundation that provides security and peace of mind to investors.

4. Finite Resource: Land is a finite resource, which cannot be stolen or destroyed in the same way as other assets might be. This inherent scarcity and permanence are what contribute to its value as an investment.

Land Investing

Land Capital's business plan focuses on identifying and investing in high-growth land, which is characterized by its potential for activation due to various factors.

The key aspects of it’s strategy include:

High Growth Land Identification: Land Capital targets land that is on the verge of activation. This can be due to its proximity to areas already undergoing development or its location in the path of progress. Additionally, land that is limited by topography, creating a scenario of high demand but limited supply, is also considered high growth.

Urban Land Focus: The company primarily focuses on urban land, which constitutes about 4% of land in the United States. Urban land is preferred because it already has essential infrastructure and community services in place, such as schools.. This makes urban land more likely to be high growth due to its established amenities and infrastructure.

Land Capital's business plan is based on a mathematical approach to identify and invest in urban land with high growth potential, leveraging the existing infrastructure and community services to ensure high demand and limited supply scenarios.

The Case for Land

Today, land is considered a highly appealing investment option in the United States as well as globally. Factors such as rapid population growth, urban development, changes in leisure activities, better transportation, increased mobility, economic growth, and ongoing urbanization contribute to the case that land will continue to rise in value.

The pressures that have affected land values in the past will continue to increase in the future. The population of the United States, currently around 360 million, is expected to reach 450 million by 2050. The world population is also expected to almost double during this time. Despite the rapid increase in population, the amount of land available remains fixed and limited. Currently, the mainland United States has about 1.9 billion acres of land (excluding Alaska and Hawaii). A century ago, this equated to 48 acres per person; today it’s about 4 acres per person and is projected to decrease to about 1 acre per person by 2050, based on current projections. The impact of these trends on land values is clear.

While the total land area in the United States remains consistent, there is a constant evolution in land use. Urban areas are expanding at a rate of approximately 10 to 15% annually, making them a lucrative option for land investors. Interestingly, urban land makes up less than 2% of the country’s total land area. 

Approximately 75% of the population growth in the United States over the last ten years has happened in urban areas. Research shows that by 2050, the largest cities in the country will nearly double in size. As a result, the greatest land value shifts are expected to take place in the suburban regions surrounding these urban centers.

The impact of these trends on land values is clear.