In the last six months, development land in the Denver metro area has seen its first resurgence since the real estate bubble burst in 2008. And, of course, more interested buyers means increased prices for sellers.

The majority of the development land sales in the past five years have been for land zoned for either single-family lots or multi-family housing. Recently, there has been an uptick in sales of land zoned mixed-use and other commercial development purposes at prices that have experts such as THK Associates President Dan Conway saying that “the development land market has come all the way back.” Denver’s deputy manager of community planning, Molly Urbina, has also commented on the recent surge of development applications being received by her department.

According to THK’s forecast, the Denver metro area is expected to gain an average of 36,350 new jobs over the next ten years. THK included Weld and Larimer counties in their analyses of the Denver-area real estate market due to the changing commuting patterns in the north Denver area and the energy-sector-influenced growth both counties are experiencing. State demographer data projects that the population of Weld and Larimer counties will grow by 110 percent and 52 percent by 2040, respectively. As a whole, the Denver region is expected to grow by at least 50 percent in that time.

There are a number of factors beside population that will influence the future of the development land market. According to George Thorn, president and founder of Mile High Development, new land development purchases will be for smaller amounts of land (in the three-hundred-thousand-square-foot range, rather the million-square-foot range) due to the increased pre-leasing and equity requirements that traditional lenders have now that they didn’t have before the mortgage crisis. The willingness of longtime owners of undeveloped (such as farmers and ranchers) to sell their properties for development is another factor that will impact the market.

For buyers who are interested in adding development land to their portfolio in Colorado, private money loans through Montegra can be a good alternative to institutional lenders when making the initial purchase. Private money lenders are more willing to listen to your plans to develop the property and lend you the money needed to make those developments, while banks and other traditional lenders have stringent requirements that can be difficult to meet while your project is under construction. Because their loans are secured by real estate rather than projected income, private money lenders are more able underwrite loans in situations where a property will not immediately produce profits. The increased interest in development land gives the land more marketable value and thus makes it worth more to both borrower and lender.

If you’re interested in adding development land to your portfolio, contact Montegra Capital, a private money lender based in Denver, Colorado.

This blog was written by Bob Amter, President of Montegra Capital Resources, LTD., a Colorado hard money lender.  [google_authorship] has been in the private capital lending business for 41 consecutive years.