Developers purchased $2 billion in new development land in the first six months of the year, putting the industry on track to return closer to 2005-2007 peak buying levels by the end of the year, according to data from Real Capital Analytics (RCA).
The most prominent buyers have been REITs, along with a few merchant builders, focused on finding land in the most stable major metros. Manhattan, San Francisco, Seattle, and Raleigh have already seen land price averages surpass peak levels this year, while the D.C. metro area and Boston are quickly approaching the same milestone.
Among the more aggressive developers is McLean, Va.-based Jefferson Apartment Group, which has 6 development sites going up in the D.C. corridor spanning from Baltimore to Northern Virginia. The metro area surrounding the capitol has seen a healthy amount of development activity over the past two years, with 24 new development sites cropping up since 2011, totaling more than $300 million in investment.
Not to be outdone, Manhattan leads the way in new developments since 2011, with $811 million on the table in land sales volume. The runner-up for top development sales volume is San Francisco, with $424 million in new development land sales. And coming in third place in land sales volume since 2011 is Seattle, with $285 million.
Distressed land sales have accounted for about 15 percent of recent transactions and have held down price averages for new development sites, according to RCA.