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Growing hunger for raw land

Unimproved property can be cheap, but financing poses challenges

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As 2009 limped to a close, down in suburban Miami beleaguered homebuilder Lennar Corp. sold a 9-acre parcel of raw land for $2.3 million. The property, located in the city of Kendall, was, according to press reports, originally acquired in 2003 for $15 million, but I assume Lennar executives were just happy to get the property off the company's corporate books, where it sat as a non-revenue-producing asset. The deal was notable because the market for raw land has been relatively quiet over the past three years, despite best efforts to make something happen.Beginning around 2007, a number of investment groups began raising capital for raw land, which had been aggressively accumulated by real estate investment trusts (REITs) and individual investors during the boom years but became toxic to corporate accounting during the bust. One of the early strivers for raw land was Foremost Communities LLC in Irvine, Calif., which in 2007 formed a joint venture with Starwood Capital Group ...