Our Strategy
Purchase Raw Land, Sell a Shovel-Ready Site
We are seeing an unprecedented demand for Austin real estate. With investors from across the world looking to enter the Austin market, we have seen asset valuations increase significantly over the last decade.
This increase in valuations has had a significant impact on the price developers are willing to pay for developable sites but has not trickled down to the price of land that is, as-of-today, not ready to be developed.
Our strategy aims to capitalize on the particularly wide spread we see between the price of raw land and that of shovel-ready sites in Austin.
There are three main factors that differentiate raw land from a shovel-ready site:
Entitlements (zoning, deed restrictions)
Utility availability (water & sewer)
Market conditions
We have developed a process to identify, track, and ultimately purchase properties that are not shovel-ready today but that have the potential to be developed in the future.
Case Study: Hufsmith Rd.
Execution: Site was undevelopable at time of purchase. Strategic assemblage of three different properties, with each parcel contributing specific value. One parcel provided majority of acreage, a second parcel increased frontage, and a third parcel added detention and drainage area. Sold site to office warehouse developer.
Case Study: Kingsland Blvd.
Execution: Site was undevelopable at time of purchase. Through complex multi-year coordination process, worked with engineers, city, utility providers, and adjacent property owners to ultimately bring electric capabilities to site. Sold site to office developer.
Case Study: Louetta Rd.
Execution: Site was undevelopable at time of purchase. Annexed property into Klein PUD to provide property with access to water and sewer services. Platted property as part of the annexation process. Property currently under contract to sell to BTR (build-to-rent) developer.
Case Study: Dripping Springs
Execution: Site undevelopable at time of purchase due to city of Dripping Springs’ lack of wastewater capacity. Currently undergoing entitlement process, working with our engineers and architects to coordinate a rezoning and a utility service agreement. Once shovel-ready, site will be sold to a multifamily developer.
Case Study: Ronald Reagan
Execution: Site located in an area experiencing a high volume of single family construction. Site was acquired at an attractive discount to property values in nearby, more mature areas. ATX Capital is currently working with neighboring owners to secure wastewater to the property. Site will be subdivided and sold as smaller shovel-ready parcels to multiple developers.
“We seek to purchase land at a price that is not reflective of the property’s ultimate cash-flow-generating ability; land that is valued through a different method than it will be once it reaches developability. ”