In addition to purchase for use in agriculture, ranching or forestry, the acquisition of land can serve multiple other investment objectives. Land can be purchased in anticipation of growth and the appreciation in value that will occur over time as the area surrounding the land develops. It can be purchased on a bulk basis with the intention of actively pursuing permitting, subdivision and the installation of utilities prior to a subsequent sale of improved parcels to other development entities. In either case, investment in land presents varying opportunities and challenges that are unique. Each land investment has different levels of risk and serves distinct strategic objectives.
Land holdings in prime locations in growing markets can be attractive long term investment vehicles if advantageously acquired. In purchasing land for future development, Prescott carefully evaluates the property’s realistic prospects for appreciation and identifies the appropriate steps to be taken to enhance its value, including securing or expanding zoning and regulatory approvals and entitlements as well as identifying potential tenants or other users for the property. To realize value, Prescott may form a development partnership, structure a ground lease to participate in the property’s development or sell the land following the receipt of development approvals. To moderate risk, Prescott typically invests in land on an unleveraged or moderately leveraged basis.