Land Values, Land Investment Outlook and More Shared at 2015 Florida Land Conference

FOR IMMEDIATE RELEASE (LAKELAND, Florida – April 14, 2015)

Approximately 300 Florida landowners, mostly in agriculture and representing 9 different states, learned much about the value of their land at the Lay of the Land Florida Land Conference April 10. They saw the per-acre prices of Florida land sold in 2014, learned that agricultural land may be an excellent investment, and heard from Florida’s Commissioner of Agriculture. (See “Market Report” below for more about the per-acre prices of land sales.) The conference at Champions Gate near Orlando was hosted and sponsored by Coldwell Banker Commercial Saunders Real Estate (CBCSRE) in Lakeland, one of the state’s largest land brokers.

The “Lay of the Land Market Report 2014” presented at the conference, reports verified market value sales and other key facts important to buyers, sellers and developers. In an introduction, CBCSRE owner Dean Saunders noted that the report targets 14 property types. “We partner with a network of appraisers and land professionals to vet the data and bring you accurate information,” he wrote. “The result is the most comprehensive view of Florida land values in the industry today.”

Saunders noted that some major Florida land deals were consummated in 2014. One of those – the sale of 380,000 acres of north Florida timberland – was announced in last year’s Market Report but didn’t close until March 2014.

Saunders cited Alico’s purchase of 22,000 acres – primarily citrus groves – for $284 million as an example of the impact of institutional investor-driven acquisitions.

NOTABLE SPEAKERS

Florida Commissioner of Agriculture Adam Putnam said he hopes the Florida Land Conservation Initiative (Amendment 1) passed last fall by Florida voters will allow agricultural lands to continue supporting agricultural operations. The amendment was designed to dedicate 33 percent of the documentary stamp revenue each year to acquire lands and easements for conservation and water resource protection. That amount is expected to be $700 million this year. Putnam said he and some state legislators advocate obtaining easements on environmentally sensitive agricultural lands, rather than buying the lands outright. That would allow the state to get environmental benefits from the property while leaving the land in agriculture, he said. “Getting this right is important,” Putnam declared.

Speaker Paul Genho, PhD, retired president of Farmland Reserve Inc., said agricultural land has historically been a safe and secure investment. “The portion of any ag investment that is in land is inherently low in risk,” he said. He predicted the world’s growing population will need 70 percent more food in 2050 than it requires today. The needed food will be largely supplied by the Western Hemisphere, especially the United States, he said.
Mark Dotzour, PhD, of Texas A&M University said he expects the appetite for real estate investment to get stronger in 2015 and 2016. He said foreign investment will help drive real estate purchases in the United States. “Nationally, the bullish outlook continues,” he said.

MARKET REPORT

A brief summary of 2014 sales by land category follows. See the accompanying “Lay of the Land Market Report 2014” for much more detailed information about each category.

Ranch and Recreational Land

More than 83,400 acres of unencumbered ranch land sold in 2014, up from 14,037 acres the previous year. The median price in 2014 was $3,015 per acre, up from $2,737 the previous year.

The report projects that demand for ranches will remain elevated throughout 2015 and for as long as cattle prices remain at historic highs.

Timberland

16 Florida timberland sales of 1,000 or more acres closed in 2014, totaling more than 462,000 acres at an average sales price of more than $1,460 per acre. Gross sale prices ranged from $1,100 to $1,800 per acre.

The report projects that timberland values are likely to continue to rise in coming years. An improving U.S. economy, a continued rise in housing starts and the expected growth in bio-energy wood products are among factors likely to increase timber demand and timberland prices.

Central Ridge Citrus (Highlands, Lake and Polk counties)

Sale prices for net citrus acreage ranged from $5,300 to more than $16,500 per acre, depending on the health and production of the grove. More than half of the sales were under $10,000 per acre, compared to most sales the previous year being more than $10,000 per acre.

The strong housing real estate market has created underlying land values for Ridge citrus land in decline from greening disease and other factors. However, as more growers quit caretaking due to greening, values are expected to decline. Anecdotally, there has been a noticeable decline in calls from prospective buyers for citrus groves in this region.

Flatwoods Citrus (Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Lee, Manatee and Sarasota counties)

Values for groves with average quality and production were in the $8,000 to $10,000 per-acre range, with a large percentage of those transactions being closer to $10,000 per acre.

Growers with smaller groves increasingly have begun to limit their caretaking and manage their groves to maximize production for another few seasons. Growers with large holdings are more likely to express confidence that a long-term solution to greening disease will be discovered; some see this as an opportunity to increase their holdings.

East Coast Citrus (Indian River, Martin and Saint Lucie counties)

Two sales in this region netted $6,505 and $9,793 per citrus tree acre. Several sales of former citrus land transitioning to other agricultural uses ranged from $2,852 to $6,653 per gross acre.

The report said the citrus industry remains a challenge as greening, canker and “Swingle decline” take a toll. This is creating considerable consolidation, with less productive groves being converted to other uses and packinghouses that were once competitors joining forces to share a shrinking pot of fruit.

Former Citrus Lands in Central Florida

More than 10,000 acres of former citrus land was sold for other agricultural uses at an average price of $5,100 per acre.

More than 13,000 acres of former citrus and ranch/recreational land was sold for development or long-term investment for an average price of more than $15,400 per acre. However, former citrus alone (excluding ranch/recreational land) sold for an average of over $76,000 per acre.

Former citrus lands continue to transition to other agricultural uses or to development – primarily residential development.

Central Florida Farmland/Cropland

Good quality irrigated farmland in the Immokalee (Collier County), Palmetto (Manatee County) and Ruskin (Hillsborough County) areas continue to have average market values of $7,000 to $8,000 per farmable acre. Per-acre values increase when the land is closer to packinghouses. The interior counties of DeSoto, Hardee, Highlands, Polk and Okeechobee have lower per-acre values of $4,500 to $6,000 per farmable acre.

Demand for farmland continues to be heavily influenced by tomato growers. Low or fluctuating tomato prices has resulted in many farmers reducing their planted acreage.

Sugarcane

Sales in the $12,000 to $15,000 per-acre range have been recorded.

The recent historically high prices for this South Florida crop are tied to the need to strengthen volume to existing mills or packing facilities. Prices are expected to maintain current levels in the Everglades Agricultural Area.

North Florida Cropland

In the farming area around Hastings (east of the St. Johns River in St. Johns, Putnam and Flagler counties), transactions showed strong prices, generally in the $7,000 to $8,000 range. In addition to the traditional potatoes and cabbage grown here, more specialty and ethnic crops are being grown. Land uses and values are influenced here to some extent by the steadily increasing populations of the metro areas less than 15 miles away on the Atlantic coastline.

In the more westward cropland region of Levy, Gilchrist, Dixie, Lafayette, Suwannee, Hamilton and Madison counties, field crops include peanuts, field and silage corn, beans, carrots, melons, tobacco and some small grains. Irrigated farm prices ranged from about $4,500 to $6,300 per acre, including wells and complete irrigation systems. The highest prices are for farms with the highest proportions of irrigated land.

Madison, Suwannee and Hamilton counties had the most active farmland markets in 2014. Dry cropland in this area generally sold for between $2,500 and $3,500 per acre.

Residential Lots and Land in Central Florida

In Osceola County, residential land sales are averaging $44,246 per upland acre.
Clermont, Leesburg, Mt. Dora, Tavares and Eustis are popular locations in Lake County. Development land averaged $28,619 per upland acre and lots in bulk averaged $20,869 per lot in the county.

Orange County land is at a premium, with development land averaging $87,977 per upland acre in 17 large transactions. The few bulk lot sales averaged $77,283 per lot.

Residential land was $19,663 per upland acre on average in Pasco County.

New development in Hillsborough County is mostly in the Riverview area and some remaining pockets in greater Tampa. Bulk lot sales in the county averaged $40,030 and land to develop averaged $79,412 per upland acre.

In Polk County, bulk lots are $34,781 per lot and residential tracts are $24,077 per upland acre.

Manatee County averaged $38,814 per upland acre and finished lots in bulk were $63,323.

In Sarasota County, land to develop for homes is $110,034 per upland acre and bulk lots are $68,998 per lot.

Residential land and finished lot sales are a reflection of the housing market. More houses are being built and more homes are being purchased. It is a slow, steady (and healthy) rate of growth for this market.

Conservation Sales, Conservation Easements and Remainder Rights

Conservation sales to governmental agencies were few in 2014, and encompassed “buffer” or “connector” zones.

The USDA was the only agency that purchased conservation easements in 2014, totaling just above 10,000 acres over a wide area, with a per acre price range from $1930 – $7200.

A Remainder Right sale is the sale of a property encumbered with an easement, and values are reflective of the easement’s restrictions. The most restrictive brought between 21% and 30% of fair market value, with the more flexible restrictions falling in the 50% fair market value range.

About Coldwell Banker Commercial Saunders Real Estate

Coldwell Banker Commercial Saunders Real Estate is regarded as an authority on all types of Florida land, transacting over $1.5 billion in sales from 1996 through 2014.

Expanded in 2013 adding the CBC Saunders Real Estate | Forestry Group with advanced timberland expertise, the Saunders team of foresters and land real estate professionals offers advisory and transactional services through the home office in Lakeland, FL, the north Florida office in High Springs, FL, and its network of Coldwell Banker Commercial affiliate offices nationwide and worldwide.

CBC Saunders Real Estate offers a broad range of services to meet the real estate needs of Florida landowners. Through long-held relationships with key government and industry decision makers, the firm provides consulting on government issues both locally and on state and national levels. For more information, please visit SaundersRealEstate.com.

For more information, please visit LayoftheLandConference.com.
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