Tips for expediting the land-buying process

Land transactions have been heating up in Northeast Ohio over the last year. Because Cuyahoga County is largely urban, developers and users looking for tracts that are in the 30- to 40-acre range are pursuing land out in secondary counties such as Medina, Lake, Lorain and Summit. This demand has put landowners in a position to hold onto that property, or demand a premium.

“You can’t make more land,” says George J. Pofok, CCIM, SIOR, a principal at Cushman & Wakefield | CRESCO Real Estate. “Those that control the product are sitting in a very good position, potentially over the next several years. Interest in land has increased and so have the prices.”

While land is in increasing demand, deals can run into a multitude of obstacles that can complicate or drag-out closing, so buyers should proceed with caution before diving into a project that could, if executed improperly, be derailed.

Smart Business spoke with Pofok about what buyers need to do when buying land to ensure their projects get completed.

What issues tend to disrupt projects that start with land?

Lack of communication is a big issue. If plans aren’t cleared with local governing bodies, construction can get shut down before it ever begins. That can happen, for instance, if the plans are for a project the community doesn’t value. Council meetings where plans are publicly disclosed can highlight those concerns and tank projects, sometimes requiring the land to be resold to a buyer whose plans better align with the needs of the community.

Projects that start from land can also run into easement, utility and wetlands issues. Sellers can help buyers mitigate these risks by having as much due diligence in hand at the time of sale as possible. This can shorten or eliminate questions while also boosting the value of the property. Having ALTA, wetlands and environmental surveys packaged and ready for potential buyers can shorten due diligence time by a month or more.

What diligence should be done before buying land?

It’s important for landowners to reach out to the local municipality and talk with them about the needs of the community, as well as their appetite and willingness to engage in certain projects. It’s also a chance to be certain of how the property is zoned and discover any financial opportunities — tax abatements, for example — and talk to utility providers to be clear on the available capacity for water, gas and electric usage on the site. This is even more important when land is acquired in secondary and tertiary counties as there’s a greater chance that not all the infrastructure is in place.

Also, consider the available labor pool in the area to see if it can support the project. That can be done through a labor study that’s specific to particular industries. That’s critical because the building can be great, but it’s nothing without the needed labor to support operations.

Wetland surveys are a big issue and it can be a process to complete them. Depending on size and type of wetlands, it could mean having discussions with the Ohio Environmental Protection Agency and potentially the U.S. Army Corps of Engineers, so the review, approval and mitigation process can take a lot of time. The latter issue, mitigation, can add additional layers to a project. It could require buying tax credits in the region being developed. And in some areas, those credits aren’t available. That can curb development.

How can buyers expedite the process?

Land buyers should do their homework. Have conversations with all the necessary parties ahead of a purchase. And be proactive, not reactive; it will save significant time in the long run. Working with an experienced real estate broker can be a big help. They know the market and the pricing, as well as the pitfalls. They can ensure surveys and title work move quickly through the system, bridge any gaps in discussions with local municipalities, and provide guided advice as to vendors that can help keep the project moving along. ●

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George J. Pofok



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