- November 1, 2016
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Cows and Wetlands
In short, yes cows can keep you from having wetlands! Cows and commercial real estate, how do this things relate?! In this post, I’ll explain how having cows on your commercial land property can keep you from having wetlands. Reducing the amount of wetland on your property will increase property value and sale price.
Commercial Real Estate – Land
If, like me, you love land and have been around a while, you’re acquainted with the issues that can arise. Issues come up more frequently in land brokerage than in other types like office, industrial and retail. Commercial land is one of the most complicated and time-consuming property types you will ever broker. After all, if you’re selling an office building or strip shopping center, it’s already improved. While there are still many due diligence issues to address, potential wetland is rarely one of them.Cows, not dogs, can be man’s best friend when it comes to commercial land #CRE Click To Tweet
Wetlands in Louisiana
Last Friday, my colleague asked if I wanted to work with him in meeting a family that owns acreage. The highest and best use of this land may be as a wetlands mitigation bank. It’s a topic we’ve discussed often, as I’ve brought him into other listings that we know will have wetlands. I have also had a former client that owns a wetlands mitigation bank near this family’s acreage. In short, the universe conspired to bring the topic of wetlands up in about five conversations in the last 48 hours. While getting my hair cut today, my hairdresser and friend brought up an 80-acre parcel of land his family owns. The land is in south Baton Rouge in the Ascension Parish on a beautiful bayou. South Louisiana, Ascension Parish, bayou frontage… what are the chances wetlands could be present? Very likely. Naturally, I asked about wetlands. This isn’t his specialty, but when I asked about palmetto plants and standing water he said the land has those. But, it used to be a clear and dry pasture, except for tree lines on the perimeter. It was this way when his grandfather raised cattle on the 80 acres.
For decades, I have seen cleared land from cows grazing. But, in just two decades, many pieces of land have become overgrown wetland. This is a result of cows that were no longer eating the grass. Trees, weeds and other foliage started growing and neighboring tracts altered natural drainage, creating wetland.
So, if you own land and are not familiar with issues surrounding wetlands, your land can become jurisdictional wetlands. This could occur from something as simple no longer raising cows on property.
Keep the Cows!
So, here are a few tips to think of if you own vacant land or acreage to avoid wetland. Keep the cows! Even goats and sheep can help to graze the grass. Don’t let tree growth go unchecked, pay attention to neighboring property being developed, talk of future roads being built and the growth patterns of wherever your property is located. Even that modest 60’s or 80’s “ranch style” family home can be worth more than you ever thought. But, its sales price can be adversely impacted or reduced if neglected and the circumstances are right for wetlands. Fair warning, wetlands can be established in a relatively short time. I stress this because many landowners simply don’t realize it doesn’t take a hundred years for wetlands to develop. Also, they often don’t realize that wetlands can be created by something as simple as not having livestock to graze the land.Can cows keep you from having wetlands? #CRE #Land Click To Tweet
I’ve been involved in so many properties where livestock grazing helps to keep invasive grasses, weeds and trees from growing. Recently, I was on a tract walking the site with the environmental engineer. The engineer immediately identified wild onions, grasses, weeds and trees just by walking the site. He was able to specifically identify which areas were going to be wetlands just based on the overgrown foliage. Land becomes overgrown before you know it. If grazing isn’t an option, consider having the property bush hogged or cleared twice a year. The cost of this service will yield far more in sales price, time and likelihood of a sale than if you neglect it. If you have no interest in raising cows, find a local farmer that has a small cattle operation. If the rancher (let’s call them that), only pays enough annual rent to pay the taxes, you swap for meat for your freezer, or they only maintain liability insurance, it could be far less expensive in the long run. Much less expensive than finding out your 10 or 40+ acre tract, now prime for a subdivision or mixed use development, is going to net you far less in a sale if three or 10+ acres is now wetlands. It doesn’t take too many wet acres for the mitigation costs to reach six figures. Essentially, this means less money for you at the closing since it will come off the sale price. It costs a hefty price to mitigate an acre of wetlands, plus engineering costs and time, which add up quickly. If you don’t know about the costs, please talk to a knowledgeable CRE advisor. That includes calling or emailing me.
Avoiding devaluation from wetlands doesn’t just apply to large pieces of land. For example, perhaps your family home on a three-acre tract that you assumed would decrease in value is now in a highly desirable area. It could even be in a commercial overlay district. Especially if it allows retail use, your price per square foot has just gone through the roof! The reduction in sale price is now equally as high if you have even half an acre of wetlands on a three-acre tract. The bottom line is, it costs far less to keep cows grazing than it costs to neglect the land and let a few acres become overgrown, potentially resulting in wetlands. This is the 21st century and commercial buyers and developers have to deal with wetland. But, you as the landowner may end up paying a big price for what cows could have avoided.
About Danny Watts – Danny is a Senior Advisor with SVN | Graham, Langlois & Legendre, LLC. His 30 year career in commercial real estate started in appraisal and then evolved into 21 years in CRE brokerage. He has been active in the commercial and industrial real estate market throughout its many variations and cycles, making his experience invaluable to seasoned institutional market players, developers, investors, lenders, and builders. One of Danny’s greatest strengths is assisting clients with entitlement and rezoning issues and he does this at no additional cost to the client. If you would like to contact Danny, you can call him at 225-367-1515, email him at email@example.com or follow him on Twitter at @svngll.