The Race Continues: Economic Growth vs. An Economic Tantrum-Week 21

Land Market Summary by Segment:

Office Land:

It has been at least ten years since I have had an inquiry from a potential client seeking a general office site. Almost all of the Class A office space that has been built over the last few years has been for medical use. Most of the medical office space demand has been driven by the consolidation of the medical industry under Obamacare.

In a recent conversation with a land developer, he shared with me that he was talking with several Class A general office building developers about sites in his business park. Then he paused, and said, “Of course I have been talking to the same developers about the same buildings for the last six years.” I think that captures the relative lack of demand for general office land.

In these uncertain times, it is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.