DEVELOPMENT SITES
Land Valued at Its Highest and Best Use.
Development Sites, Residual Land Value.
Development sites are land whose worth lies in what can be built, not in what stands today. They range from vacant parcels and surface parking lots to under-built properties and multi-parcel assemblages.
In this sector, value is earned parcel by parcel and approval by approval. Population growth, infrastructure, and the need for new space shape demand, while zoning, entitlements, and utility capacity set what each site can support.
Developers price land by working backward from what they intend to build. The residual land value is what remains after subtracting construction costs, financing, fees, and required profit from projected sale proceeds or capitalized income. A change in permitted density, achievable rents, or building costs moves that figure directly.
The sector includes five segments: Vacant Commercial Land, Low-Coverage and Under-Built Sites, Parking Lots, Assemblages, and Powered Land and Data Center Sites.
Vacant commercial land is unimproved acreage zoned for commercial, residential, or mixed-use development. Parcels range from single pad sites along retail corridors to larger tracts suited to master-planned projects. Before construction, most require surveys, environmental reports, traffic studies, and site plan approval. Buyers include developers, homebuilders, and national tenants seeking build-to-suit locations. Pricing reflects permitted density, access and frontage, utility availability, soil and environmental conditions, and the entitlement timeline.
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Low-Coverage and Under-Built Sites
Low-coverage and under-built sites are improved properties using only a fraction of the development their zoning allows. Typical examples include single-story buildings on large lots, older retail strips, and outdated office or industrial structures. Many still produce income, giving owners a choice between continued operation and sale for redevelopment. The land is often worth more to a developer than the existing improvements are to an investor. Pricing weighs current income against residual land value, along with remaining lease terms and demolition costs.
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Parking Lots
Surface parking lots generate modest income today while preserving future development potential. Most sit in dense areas where land is scarce and zoning permits greater height. Parking revenue can offset carrying costs while entitlements are pursued. Some lots serve neighboring buildings under long-term agreements, which may require that spaces be rebuilt within any new project. Pricing reflects location, permitted density, existing parking contracts, and the cost of those obligations.
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Assemblages
An assemblage combines adjacent parcels under single ownership to create a site larger than any one lot. Together, the parcels can support projects none could accommodate alone, a gain known as plottage. Execution depends on securing every piece, frequently from owners with differing timelines and price expectations. Confidentiality matters, since word of a larger plan can raise asking prices on the remaining holdings. Pricing reflects combined zoning capacity, the cost and certainty of each acquisition, and holdout risk.
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Powered Land and Powered Shells
Powered land is vacant acreage with secured or near-term access to the electrical capacity, fiber connectivity, and water that data centers require. Available power, measured in megawatts, has become the controlling factor in site selection, and a new utility commitment can take years. Buyers include hyperscale cloud providers, data center developers, and the investors behind them. Pricing reflects confirmed utility commitments, energization timeline, substation proximity, acreage, and zoning.
A powered shell is an existing building with electrical service heavy enough to support data center use. Former manufacturing plants, printing facilities, cold storage warehouses, and telecom buildings are common candidates. Reusing that infrastructure can shorten the path to operation, making these buildings attractive to edge and enterprise operators. Its worth turns on available power confirmed by the utility, floor loads, clear heights, fiber access, room for generators and cooling, and zoning.
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