Archive for Wednesday, May 19, 2004

Sticker shock

land prices soar near 24-40 corridor

May 19, 2004

The land rush is on.

And Tonganoxie and Basehor area residents might be surprised to discover that land buyers aren't folks they know.

Doug Dowell, a real estate salesperson from Olathe's Crown Realty, said the area -- particularly land in proximity to the Kansas Speedway and Village West -- is drawing the attention of investors nationwide.

"I think it's going to be one of the hottest markets in the country, frankly, in the next two to five years," Dowell said.

He's had contacts from investor across the nation.

For instance, one he's currently working with is a real estate investor in West Palm Beach, Fla.

"He's basically looking for property that has commercial and retail potential that will appreciate in value, or is likely to appreciate in value in the next two to five years," Dowell said.

Land with highway frontage is so hot right now that it's likely to be selling by the square foot, rather than by the acre, Dowell said.

That means landowners may be able to sell their property for more than they ever dreamed possible.

For starters, an acre covers 43,560 square feet. If land sells for $2 a

square foot, that would be $87,120 for one acre. And say if, for instance, a highway property with sewer access were desired by a fast-food restaurant chain, it could go as high as $10 or $12 a square foot, Dowell said.

That means -- hold onto your hats -- on a prime highway location with access to sewer, one acre of ground could feasibly sell for $522,720.

Of course that's top end and likely not to be expected in Tonganoxie, 12 miles from the Speedway -- at least not yet. But it's still something to keep in mind when selling property, Dowell said.

"I think it's time the general public was apprised of that," Dowell said. "A lot of times speculators will snap it up real cheap and they make the big bucks on it."

When it comes to U.S. Highway 24-40 between Basehor and Tonganoxie, Dowell said the next 10 years will have great potential for land values.

As recently reported in The Mirror, an investor paid $1 million for six acres of commercial property at 166th Street and U.S. Highway 24-40. That comes out to about $3.80 per square foot.

Not bad for now, but in the future that could be even better -- for the seller, that is.

"I think all that highway frontage that has commercial potential could increase in value to as much as five to 10 bucks a square foot," Dowell said.

Those who are selling land should hang on to what they have until they're sure they're dealing with someone who will give them a fair price, he said.

"There's nothing wrong with speculating on their own property," Dowell said. "I've seen too many people sell their property too cheap."

Of course, he added, everyone needs to keep an eye on the nation's economy.

"If the economy takes a down turn, you might not be able to sell it for anything," Dowell said. "Who knows what's going to happen with this Iraq thing."

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