Investors reap rewards from downturn acquisitions in improving market

New York /
Sep.September 10, 2012 03:00 PM

Companies such as BlackRock, Angelo Gordon & Co and Starwood Capital are beginning to sell off shovel-ready development sites they bought on the cheap when the economic downturn hit, Reuters reported.

These money managers, who purchased cheap plots of residentially zoned land in bankruptcy proceedings from troubled developers, are seeing returns in excess of 20 percent on their investments, thanks to the ever-increasing value of land.

“We are coming out of the mother of all housing cycles, and residential land is the best way to play the ultimate recovery,” said Michael Barr, a portfolio manager for hedge fund Paulson & Co. “Land is the highest returning component of the home building equation.”

As The Real Deal previously reported, the average price per buildable square foot for Manhattan deals is $323.43 so far in 2012, up from $308.32 last year; in Brooklyn, it’s increased to $117.71 from $113.24 in 2011.

The sites sold by major companies, such as BlackRock, are typically traded with pre-construction and zoning approvals already in place, Reuters said. [Reuters] Katherine Clarke


Related Articles

arrow_forward_ios
Vanguard's Mortimer Buckley, Compass' Robert Reffkin and BlackRock's Larry Fink (Getty, Vanguard, Compass)
Vanguard, BlackRock increase stake in Compass
Vanguard, BlackRock increase stake in Compass
Anywhere'sRyan Schneider and Angelo Gordon's Adam Schwartz and Josh Baumgarten (Anywhere, Angelo Gordon)
Here’s who’s in, and who’s out, of Anywhere’s falling stock
Here’s who’s in, and who’s out, of Anywhere’s falling stock
(Getty)
Zoning, infrastructure limits are squeezing US land supply
Zoning, infrastructure limits are squeezing US land supply
From left: CBRE's Daniel Kaplan and William Shanahan along with 231 East 76th Street and 340 East 52nd Street (Google Maps, CBRE, LinkedIn/Daniel Kaplan)
TRD Pro: Here are NYC’s top portfolio deals of the quarter
TRD Pro: Here are NYC’s top portfolio deals of the quarter
BlackRock's Larry Fink, with 98 Riverside Drive (BlackRock)
BlackRock sells stabilized UWS rental for $90M after landmark designation
BlackRock sells stabilized UWS rental for $90M after landmark designation
Midwood's John Usdan with Candela Tower (Midwood, Candela Tower)
Midwood closes on $102M West Village property, plans renovations
Midwood closes on $102M West Village property, plans renovations
BRP, BlackRock nab $91M for Long Island project
BRP, BlackRock nab $91M for Long Island project
BRP, BlackRock nab $91M for Long Island project
John Usdan with 56 7th Avenue (Streeteasy, Midwood Investment)
Midwood buying West Village apartment building for $100M
Midwood buying West Village apartment building for $100M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...