Land Pricing Appreciates Rapidly in Phoenix

Land prices in the Buckeye area of Phoenix, AZ, are increasing rapidly. In one recent example, Arizona Land Consulting brokered the acquisition of a 36-acre parcel of land in a Buckeye opportunity zone for $7.1 million on behalf of a 1031 exchange buyer. Within 24-hours, the buyer received multiple offers from multifamily developers to buy the back portion of the site above the buyer’s purchase price.

“The price of commercial land is going up exponentially. Properties that were sold at $2 a foot in Buckeye earlier this year are now getting offers at $12 a foot. Demand is very strong and viable land options are limited, and we’re seeing a lot of demand from out of state developers and builders,” Anita Verma-Lallian, founder of Arizona Land Consulting, tells GlobeSt.com.

Like the other trends in Phoenix, population growth is behind the appreciation of land. “Migrations to Phoenix from other cities are causing a high demand for commercial land. There’s a low inventory of existing homes, and the supply chain for homes is running very slow,” says Verma-Lallian. “Only 17% of land in Arizona is private, so there isn’t much inventory of commercial land, especially as there is a lack of sites with infrastructure. Low interest rates are also fueling demand.”

The buyer of the land site plans to develop commercial property on 16 acres and has signed a deal with a gas station to operate a space on the site. This particular site has zoning that would require multiple uses, making it both valuable and rare. “The Buckeye property Arizona Land Consulting recently closed on has existing infrastructure and the desired zoning for multi-family developments—a rare combination to find,” says Verma-Lallian. “Sites like this are becoming increasingly difficult to find as they are acquired quickly. Arizona Land Consulting helps developers and builders stay ahead of the curve and find sites that work.”

Due to the high demand for land sites, Verma-Lallian says that most of the transactions are occurring off-market. “I reached out to a few multifamily brokers in the area. They have so much demand for commercial property, so we were able to generate multiple offers that kept increasing in price,” she says. “Previously, we had to bring properties to the market, but with the market changing as rapidly as it is, we no longer have to do that since demand is so high.”