Forecast: Land Values Peaking With Fewer Sales, Bigger Dollar Volume

TAMPA, FL-Despite record land prices being paid for prime parcels in most Florida markets, Robert Zegota, a senior vice president in the Tampa office of Grubb & Ellis/Commercial Florida, predicts land values already are peaking in the Tampa Bay area and may soon be doing likewise in other markets.

“Land values [currently] are astronomical,” Zegota tells GlobeSt.com. “But I am a realist. I think land values are cresting from this point forward and we will see some price digression in the interior and some flattening in the values for coastal properties.”

Zegota says some Tampa Bay area land parcels have doubled and tripled in value in two years. “I don’t think we’ll see that sort of value growth in 2006, even on the most desirable waterfront parcels,” the broker says. “I expect we’ll see land values grow by a much more reasonable 5% or 6%.”

Zegota says he sold 300 acres three years ago and only about 50 acres last year. However, “land values have increased so much that the last year’s dollar volume was more than 10 times my total three years ago,” he says.

Zegota recently negotiated the sale of a three-acre residential condominium development site in Tampa for $14.5 million or $4.83 million per acre ($110.95 per sf). That was one of the largest prices paid for land in Hillsborough County history, the broker tells GlobeSt.com. The property, planned for 108 condo units, is on State Road 60 and Rocky Point, adjacent a new Westin Hotel site.

In nearby Pasco County, Maconi Pashley LLC of Palm Harbor paid Colquitt Inc. of Tampa $5.4 million, or $10,093 per acre (23 cents per sf), for a 535-acre tract at Handcart Road and Clinton Avenue, south of Highway 52 in Dade City.

In north Florida, Daryl M. Carter, trustee of Carter-Hamilton 660 Highway 143 Land Trust, paid Daniel Crapps, trustee of Jenings Land Trust, $5 million cash for 671 acres on the east side of Interstate 75 and south side of Highway 143 in Hamilton County. The price equates to $7,507 per acre or 17 cents per sf.

In Sumter County, Carter, as trustee of Carter-Highway 301/470 Land Trust, sold 40 acres at Highway 301 and County Road 470 to Herbert W. and Megan Freel for $1.67 million or $41,875 per acre (96 cents per sf).

At the Stuart Commerce Center in Martin County, Thies Distributing Co. plans to build a 120,000-sf beer distribution facility on a 10.92-acre site purchased from Industrial Development Corp. for $4 million or $475,675 per acre ($8.50 per sf). Thies bought the parcel through D & C Properties (Stuart) LLC.