Fay Ranches with their strategic ally Republic Ranches and The Land Report recently held three roundtables in Houston, San Antonio, and Dallas, Texas. Speakers, Greg Fay, founder of Fay Ranches, Bryan Pickens and Charles Davidson Partners/Brokers of Republic Ranches; and Eric O’Keefe, Editor of The Land Report, discussed the current market trends in land investing for cattle, timber and agriculture across Texas and the U.S. Here are a few quick takeaways:
BIGGER IS BETTER. Today’s market places a premium on contiguous holdings. “Landowners who have patiently aggregated a series of smaller parcels are being rewarded by savvy buyers,” said Bryan Pickens.
CASH IS KING. At the upper end of the market, a financing contingency is the exception. Eighty percent of all transactions are all-cash, and financing, if any, comes after the close.
KEEP IT SIMPLE. The biggest roadblock to a meeting of the minds? An over improved main residence. Sellers hoping to recoup the value of a multi-million dollar structure on a tract of similar or lesser value are bound and determined to get their money out of the deal. That won’t happen.
TEXAS MARKET. Charles Davidson noted that the drop in oil and gas prices is manifesting itself in two ways: as energy prices seek an equilibrium, buyers are taking a wait-and-see approach; and as sellers reallocate portfolios, land that was once a long-term hold is now coming to market.
ROCKY MOUNTAIN MARKET. Robust demand for larger legacy properties is being stoked by buyers from the East Coast, the West Coast, and the Chicago area. As Greg Fay pointed out, he doesn’t have enough $15 to $20 million ranches to meet current demand.