NAI Martens Land Report

HIGHLIGHTS: • 2022 has started out strong with excellent momentum across virtually all property types.

• Land has been on upward curve. Sales and prices outpace commercial and residential growth.

• Not unlike the national trends Wichita and surrounding area land sales have been brisk.

• Agricultural real estate values increase at a rapid pace across farm country.

• Metaverse land…get ready.

LAND REPORT naimartens.com • (316) 262-0000 1330 E. Douglas, Wichita, KS 67214

Land has been on upward curve. Sales and prices outpace commercial and residential growth.

Overall, the land market had its best year in nearly a decade in 2021. Land sales rose an average of 6%, surpassing the sales growth of other commercial and real estate sectors. Land prices rose nearly 7%, second only to the price growth of single-family rental properties, according to the Realtors® Land Institute (RLI) and the National Association of Realtors® Research Group.

The increase in land sales reported by RLI and NAR members surpassed the increase in dollar sales volume of transactions for commercial real estate properties such as single-family rentals (5%), industrial properties (4%),

and apartment buildings. The strong growth in land sales clearly outperformed the decline in transactions of retail, hotel, and office properties of RLI and NAR members in 2021.

The balance of 2022 is expected to remain strong even with rising interest rates. There should be sustained growth in sales and prices this year given the demand for multifamily and single-family housing. The shift from just-in-time to just-in-case inventory management amid supply chain issues will continue to drive the demand for land for new warehouses.

Recent NAI Martens Land Transactions Acres: 10

5610 E. 29th St. Wichita, KS

Acres: 80

Logistics Park Kansas City Edgerton, KS

Acres: 54

Rock Rd.

Webb Rd.

Acres: 80

Acres: 62.73

Yellow Brick Farm Land Anthony, KS

Webb Rd.

Acres: 11.57

53rd St.

Derby Corporate Park Derby, KS

Development Land Bel Aire, KS

Acres: 104

Acres: 120

45th St.

Development Land Bel Aire, KS

Acres: 2.21

SOLD SOLD SOLD

SOLD SOLD

Development Land Bel Aire, KS

Acres: 246.34

NW/s 45th St. N. & Tyler Wichita, KS

Acres: 25+

The Waterfront Land Wichita, KS

Acres: 10.21

SOLD SOLD SOLD

SOLD SOLD

Development Land Bel Aire, KS

Lakeside at the Moorings Wichita, KS

NW/S Kellogg & 135th St. W. Wichita, KS

Wichita and Surrounding Area Land Sales Have Been Brisk.

During 2021 there were 117 commercial/industrial land sales reported in Sedgwick County. They totaled almost 800 acres with a sales value in excess $52 million. Thirty five percent were industrial with a value of almost $9 million. Commercial transactions totaled over $43 million. This continues a trend over the last three years as the demand for commercial and industrial land has been exceptionally strong. It is important to note that land sales for commercial and industrial uses are significantly higher than reported. There are many sales classified as unimproved farmland that are acquired and planned for commercial, industrial and residential uses. The average per acre price for reported sales in Sedgwick County increased from $60,160 in 2019 to over $104,000 in 2021.

Well located development land both east and west has seen strong price appreciation with some larger parcels approaching $25,000 per acre. Developed lots in designated industrial parks, particularly northeast in and around Bel Aire and Comotara experienced exceptional sales over the last three years. There is a shortage looming for quality sites in the most desirable submarkets.

Agricultural real estate values increased at a rapid pace across farm country.

Not to be outdone, agricultural real estate values continued to increase at a rapid pace through the end of 2021. Adding support to agricultural real estate markets, commodity prices, farm finances and credit conditions have improved from recent years and interest rates on farm loans remained near historic lows. Moreover, agricultural grain prices will remain elevated due to the war in Ukraine and thereby boosting demand for farmland.

Despite concerns about the impact of higher input costs and intensifying drought in some regions, markets for most major commodities remained strong and producers throughout the agricultural sector were poised for sound profit opportunities in 2022.

In Kansas, non-irrigated cropland values were up over 25% from 4th quarter 2020 to 4th quarter 2021. Locally, sales and transaction values for ag land far exceed those of commercial and industrial land. Sales averaged a total of 273 transactions over the last three years with the average sale price for improved farmland was almost $6,000 an acre while unimproved land averaged $9,800 per acre.

2019

2019

Sales

Value

Acres

Sales

Value

Acres

Industrial

26

$5,293,648

124

Improved Farm

124

$40,165,078

5,312

Commercial

88

$28,696,107

323

Unimproved Farm

129

$39,716,723

8,139

Total

114

$33,989,755

477

Total

253

$79,881,801

13,451

Sales

Value

Acres

2020

2020

Sales

Value

Acres

Industrial

23

$6,334,243

240

Improved Farm

149

$50,211,698

6,114

Commercial

61

$33,613,635

420

Unimproved Farm

145

$35,844,277

9,784

Total

84

$39,947,878

660

Total

294

$86,055,917

15,898

Sales

Value

Acres

2021

2021

Sales

Value

Acres

Industrial

43

$8,923,599

368

Improved Farm

132

$54,823,219

6,476

Commercial

75

$44,235,496

425

Unimproved Farm

140

$55,951,720

11,454

Total

117

$53,159,095

793

Total

272

$110,414,939

17,930

Source: Sedgwick County Transaction Report

Metaverse Land?

Get ready…because it is here!

Metaverse is a 3D virtual reality that allows users to own, create and monetize digital assets. Recently the metaverse has emerged as a marketplace for buying and selling land. Each Metaverse consists of a finite number of parcels of land with fixed dimensions. For example, Metaverse Decentraland consists of 90,601 (16m x 16m) plots of land. Users can build and develop their land by filling it with digital assets to create value. When you find a parcel you like that’s within your budget, you simply click on it and buy it on some platform like Decentraland or a third party platform. You can make an offer for the property within the platform, and the owner either accepts or rejects your request.

could buy lots in almost any Metaverse for a few hundred dollars. Today, you’ll need a few thousand, minimum, just to get in the door. Investing is highly speculative. That’s not to say you can’t win with virtual real estate; it’s just that it’s a very new type of asset.

It will be difficult to predict which metaverse platforms are safe and will not make you lose money. Like cryptocurrency, it’s highly volatile. A few months ago, you

Tom Johnson, CRE 316 371 7635 tjohnson@naimartens.com

naimartens.com • (316) 262-0000 • 1330 E. Douglas, Wichita, KS 67214

© Copyright 2022 NAI Martens. Reproduction in whole or part is permitted only with the written consent of NAI Martens. The information contained herein was obtained from sources believed reliable; however, NAI Martens makes no guarantees, warranties or representations as to the completeness or accuracy thereof.