Land Development differentiates real estate from alternative investments as every site is unique. In addition to its finite supply, land is impacted by macro and micro market economic factors, location, physical conditions, accessibility, visibility, and governmental regulations and incentives. As a non-earning asset in cyclical business, land is a risky asset.
However, buying land opportunistically with value enhancement through proper planning and securing entitlements can be very profitable and lead to controlling significant vertical investments.
Janko Group's philosophy toward land development investment is to:
- Buy land in the path of growth with preference on "in fill" locations
- Add value through planning and/or entitlement
- Seek government incentives
- Finance with lower leverage, longer maturities and rate protection
- Have equity partners who have the ability to be more patient
- Evaluate the option to develop vertically with build-to-suits as well as on speculative construction
- Maximize favorable tax treatment through capital gains and 1031 exchanges