Land Sales per Square Foot for Selected Properties by Miami 21 Zoning Code – Data Courtesy of Costar
What land is worth, or more frequently, what the land under an existing structure is worth, is a common topic that comes up in the discussion of commercial real estate. Each parcel is, of course, unique. One variable that can be considered, however, is zoning.
In the accompanying chart, we have identified the average and median selling prices for vacant land by Miami 21 zone. These are not all the zones, but are the ones we typically deal with in mid-market commercial properties. As can be seen, below T6-12 zoning, prices tend to be in the mid double digits, whereas at T6-12, prices go well over $100 psf.
What are the implications of this? Consider a typical 10,000 square foot lot with a moderate quality 5,000 sf building on it. If the building’s NOI is even as little at $15 psf, a 6% cap would indicate a value of $1.25 million ($15 x 5,000 / .06), which in turn works out to $125 per square foot of land ($1,250,000 / 10,000), considerably more than selling prices tend to be for properties with zoning less generous than T6-12. That the value of developed properties is commonly more than the land underneath them is why redevelopment frequently takes longer than it intuitively seems that it would.
View vacant land listings.
View color codes maps of land sales in Miami-Dade County per acre or per square foot.
This was prepared with data from Costar, and is not warrantied or meant to be considered comprehensive.