benchmark

+1

My initial reaction is that the deal seems like a 'buy-and-hope' -- hope something happen that someone will pay a premium for the land. Does the mixed-use zoning make it more or less attractive? Another wrinkle to this is that this is part of an LLC that will buy the entire land, I was pitched to buy a share of the LLC, which makes it even more complicated.

The asking price of the parcel is $2.50 per square foot, and this is not a leveraged play -- you have to put up the cash to buy the parcel outright, and hoping that some of the comps below becomes a reality...i.e., going from $2.50 to $8-$15 per square foot. 1) Inside 735 acres Mixed-use zone district. Mixed-use can allow to build up to 4 floors with combination of commercial, business office and residential development. Excellent exponential multiple for the highest land use. 2) Parcel is close to two regional artery Ave I and Ave H, at half section, very visible location and allow to build up to four floors buildings according to mixed-use zoning. City last year spent $12M to improve Ave I infrastructure, widening road, paved, add traffic light, sewer and built ramp-up area. As you see, after Ave I infrastructure improvement, the land price keeps to move up from $5.50/sqft at 2011 to $12.5/sqft in 2012, to $18.5/sqft in 2013 and $35.0/sqft in 2014 along Ave I. 3) City has three mixed use areas. Other two mixed use area Lancaster Downtown and new 157 acres Armargosa Shopping Mall have been in the development phase now and land price for other two mixed-use areas already $8-15/sqft. This is last remaining mixed-use area in the city of Lancaster and in the future it will be city commerce center and commercial area and new downtown area. 4) Just walking distance 1.0 mile Northwest of Lancaster First Wal-Mart Super Center at Ave I and 27th Street West. 5) Just 1.2 miles Lancaster Market Place, a great outdoor shopping mall, which is located at Ave I-4X25th Street West, please check website http://www.lancastermarketplace.com/index.html 6) 0.5 mile South of Fox Field Industrial Corridor Project, an 8,238 acre master-planned industrial complex currently being developed which will create a lot of jobs and attract a lot of business and commercial developments. Commune from the parcel mixed use development area to working place is only 3 minutes. 7) About 3.5 miles Northeast of the approved “The Commons at Quartz Hill” commercial development project including new Super Wal-Mart located at Northwest corner of Ave L & 60th Street West. This is 5th Wal-Mart and is just approved at July, 2009. 8) About 2.5 miles Northeast of commercial shopping center development project at 60th Street West and Ave K including home supply store LOWE’s development etc. 9) About 3.6 miles Northeast of approved “The Commons at Quartz Hill” commercial development “Target” shopping center project which is located at Southeast corner of Ave L & 60th Street West. 10) 0.5 miles Northeast of approved 177 single family housing project (TTM 63282, Ave H-8 to Ave I X 40th to 41st Street West. 11) Adjacent to the approved 175 single family house project (TTM 062793) which is located at Ave H-8X37th to 40th Street West. 12) 1.3 mile Southeast of approved 655 house lot project (TTM 62759) which is situated at 160 acres of Southwest of Ave H and 50th Street West. 13) 0.5 miles to the existed finished 143 house lot project (TR060858) which is located at Ave I and 42nd to 45th Street West. 14) 1 mile North of Approved 316 single family house project (TTM62120) which is located at Ave I-8 and 35th Street to 40th Street West. 15) 0.7 mile Northeast of existed 120 single family house project (TR060905) which is located at Ave I-4 and 32nd to 35th Street West. 16) 0.8 miles Northwest of finished 84 single family house project (TTM060241) which is located at Ave I-4 and 30th Street to 32nd Street West. 17) 1.0 miles Northwest of completed 158 single family house project (TR54202) which is located at Ave I-8 and 30th to 32nd Street West. 18) 1 mile Northwest of Lancaster High School which is located at Ave I-8 and 35th Street West. 19) 0.3 miles East of new elemental school which is located at Ave H-8 and 41st Street West. 20) 0.6 mile Northwest of approved 102 single family house project (TTM062794) which is located at Ave I-2 and 31st to 35th Street West. 21) 0.5 miles Southwest from approved 296 single family house project (TTM 064899) at Ave I to Ave H-4 X 30th to 32nd Street West. 22) 0.7 miles Northeast of City of Lancaster approved 88 single family lots development projects (TTM062579) at Ave I-4 to Ave I-6 X 37th to 40th Street West. 23) 1 miles Northeast of approved 195 units multi-family condos project (CUP 08-04). Multi-family is allowed to build up to 3 to 5 floors high-density residential development. Usually every city, multi-family is most expensive land as you see Los Angeles, Orange County and San Diego multi-family land listings. 24) 0.5 miles North of approved 35 single family project (TTM061966) at Ave H to Ave I to Ave I-4 X 37th to 38th Street West. 25) 2.8 miles Northeast of 650 lots approved house project (TTM062757, Ave J to J-8 X 65th ~ 70th Street West). 26) 2.5 mile Northeast of 1594 lots Approved Master Plan Community House Project and sitting at 483 Acres land with 1 school site and 1 park site (VTTM 53229, Ave J to Ave L X 62nd ~ 70th Street West) 27) 5.2 mile East of 1925 lots 640 Acres Approved Master Plan Community Del Sur Project with commercial development, golf course and 3 proposed school sites and 1 proposed park site with 21 acres manned made lake inside (VTTM66241, CUP05-16, Ave G to H-8 X 92nd to 105th Street West) 28) 0.6 mile North, Southeast from two elemental schools. Last year City of Lancaster has approved several more elemental, middle and high schools projects. 29) 2.5 miles Northwest of Antelope Valley College which currently has 10,000 students. 30) 1.0 miles west of Lancaster Baseball Stadium. 31) 0.5 miles Northwest of “Pete” Knight Veterans Homes. 32) Electricity, Paved already exist on Avenue H and Avenue I. Ave H City of Lancaster has spent $9M to improve and Ave I last year city has spent $12M to do infrastructure improvement. Ave H and Ave I have installed electrical, phone line and water line and also being paved, which city spend most cost million dollars to install these utilities and they added a lot of value to land. 33) Avenue H and Avenue I are major regional arterial roads in City of Lancaster which is designed as 120 feet wide on each side with three lanes. 34) City has built infrastructure system such as Sewer system being installed at Avenues I which is always up to 90th street West. Sewer system is most expensive infrastructure city put into. 35) 1.4 miles West of Highway 14 which is now major 8 lanes highway from North to South and connects to Interstate Freeway I-5. 36) 5.5 miles South of Freeway 138 (Avenue D). Freeway 138 is an existing 2 lanes highway. Metropolitan Transit Authority has approved project to expand Freeway 138 to 4 ~ 6 lanes Expressway which connects the Golden State FWY I-5 to the Antelope Valley FWY 14, both major Freeways. 37) Freeway 138 is strategically very important as part of the national project called E220 Corridor. It provides the vital link between the two major freeways, Freeway 14 and Interstate 5 and the shortest route between the fastest economic region of Lancaster & Palmdale and northern California, States of Oregon and Washington. Nearby there are numerous commercial developments...... City of Lancaster has spent almost $1B to complete four big hospitals within a year to accommodate fast growing city and its population, which combine with the existed medical facilities to build strong medical system. 1/4 mile to 3 miles from parcel, it is being surrounded by numerous existed and approved residential housing and commercial development projects. See listed all 108 approved projects from City of Lancaster Tentative Tract Map near this parcel.

Yes, raw land, though lots of lands around it has been approved for housing and/or commercial development.

CA

The pitch is that you can get at least 4x return in 5-10 years.

I got pitched an investment on land in the city of Lancaster. Since I have no prior exposure on this, I'm wondering if there is any good books on this? and what's the general rule of thumb (like CAP rate for rental, etc.)? Thanks and happy holidays.

Do you have a price target?

Seems like IB is preferred by most board members. I use TdAmeritrade, and am considering moving to IB. My TdAmeritrade guy told me that IB is on the sell side, while TD is on the buy side, which would get better fill. Is that true? The other concern I have is if I were to move my account to IB, can they help moving my past trade/records? which is very important coming tax time

50%+ tax rate is insane .... wondering if it's the highest in US?

Are you betting on the jockey too much, and not the company? isn't that what WEB said not to do?

How old is your son? I've been trying to get my son go to BRK's annual meeting, but he isn't interested :(

I think that future car sales will be a lot less than what it is now -- when the self-driving cars are a reality in 5-10 years, the industry will be changed forever.

No problem. I personally just rolled my BAC 2015 10s to BAC 2016 12s. Hi Racemaze, Looking at the data, can you explain the switch over point? is it a share price at which point that the warrant/option would yield the same return as the common? Also, why not BAC 2016 10s? isn't it better (i.e., have a better return with your velocity term)? Sorry for the newbie questions if it's been asked before (or you can point me to the right reading material). thanks.

Great, thanks. Thanks. According to this spreadsheet, JPM is actually cheaper that BAC?

I agree that LinkedIn is a real company with real earnings, but it's only growing at 60-70% y2y, using forward earning, it's trading at about 500+ PE. The short thesis is purely based on rich valuation. At some point, the growth will slow, and the stock will follow, though I don't know when.

Are you referring to the fact that the loss could be unlimited?

I'm finding that to be true :)

Is shorting stock a bad idea in general? For example, LinkedIn seems to be a primary candidate for shorting, purely based on valuation. Moderator, feel free to delete the post if it's been discussed already.

In my part of the world (silicon valley), wages have gone up, and prices (food, gas, housing) have gone up, maybe it's not inflation, but sure looks like it.

I think AIG warrants still have pretty big upside, though it might take a couple of years. Is the selling results of your view that a crash is coming?

LNKD, CRM Both are doing well with their business, but have such a rich valuation, that they bound to go down -- i haven't short them yet, the problem with shorting is that market can stay irrational than you can stay solvent .

Given that BAC has risen quite a bit, and AIG has not, would you sell USB, WFC to buy AIG? would you buy common, warrant, or Jan 15 leap? The other consideration is the impeding rise of tax rate in the US.

I have a bunch of these, and am wondering if i should sell or be greedy and wait for some more?

I agree. Apple is the one. In 10 years, google might be a car company that does search on the side, I think they have incredible business opportunities ahead.