What Is Transitional Land?
Transitional land is property whose highest and best use is changing from one use to another. A farm may become a residential development. Acreage that has remained largely unchanged for generations may suddenly have commercial potential. A residential property may ultimately be worth considerably more for the land beneath it than for the home itself.
What makes transitional land particularly interesting is that sometimes the property itself hasn’t changed at all. Everything around it has.
A new sewer line, expanding public water capacity, employment growth, new schools, additional rooftops, road improvements, a new traffic signal, changing zoning or development moving steadily in one direction can fundamentally change what land may support—and therefore how it should be evaluated.
Recognizing that transition before selling can be extremely important. Land that is marketed based only on its historical use may never be exposed to the buyers who recognize its future potential.
How Do You Know When Land Is Transitioning?
Transitional land rarely announces itself with a sign. More often, the clues appear gradually in what is happening around the property.
Location is paramount. I look at where growth is occurring and what is driving it. New employment centers, industrial development, schools, rooftops and major residential projects can all create demand for land that previously had a very different highest and best use.
Utilities can be transformative. A new sewer line can change the development potential of an entire corridor. Public water matters too, but simply having water at the road does not necessarily mean adequate capacity exists for the intended use. Line size, sewer location, capacity and the cost of extending or accessing utilities all matter.
Transportation changes can be signals. Road improvements, increased traffic and even a newly installed traffic signal may indicate that an area is evolving. Those changes can alter accessibility, traffic patterns and the types of uses that may become viable.
Planning and zoning matter. Current zoning is only part of the picture. Future land-use plans, growth plans, surrounding zoning and what I sometimes call “checkered zoning”—where different uses are already beginning to mix—can provide clues about where an area may be headed.
No single signal automatically makes property transitional land. The key is understanding how location, infrastructure, growth, regulation and market demand work together to affect what the land may support next.
The Land Didn’t Change. Everything Around It Did.
One of the clearest examples of transitional land is property that has remained essentially unchanged while major infrastructure and development move toward it.
I have watched corridors of older farmland change dramatically after a major sewer line was installed. The farms themselves were still the same farms. But access to sewer created development possibilities that had not previously existed. Land that may once have been evaluated primarily as acreage or agricultural property could suddenly warrant analysis for residential development, commercial uses or other higher-intensity opportunities.
This is why evaluating land solely by looking at comparable sales of properties with similar acreage can sometimes produce the wrong answer. Two 50-acre tracts located only a few miles apart may have dramatically different values if one has access to infrastructure, favorable topography and development demand while the other does not.
The same principle can apply when a major employer arrives, thousands of new homes are built nearby, a road is improved, an interchange changes, a new school opens or surrounding properties begin transitioning to different uses.
The question isn’t simply, “What is this land worth today?” A landowner should also be asking, “What is this land becoming?”
What Determines the Next Highest and Best Use?
Recognizing that land may be transitioning is only the beginning. The next question is what use the property can realistically support.
Location usually drives the analysis, but it must be considered alongside utilities, road frontage and access, topography, floodplain and wetlands, zoning, future land-use plans, easements, surrounding development and market demand.
Sewer deserves particular attention. A sewer line appearing nearby on a map does not necessarily mean a property can economically connect to it. Location, elevation, capacity, easements and whether a pump station or other infrastructure may be required can materially affect development feasibility.
Public water requires similar scrutiny. The existence of a water line does not tell you its size or whether adequate capacity is available for a proposed subdivision, commercial project or other intensive use.
From there, the potential use may begin to emerge: residential subdivision, multifamily, commercial, industrial, institutional or another use. Sometimes the property has greater potential as part of an assemblage with adjoining land than it does by itself.
Determining highest and best use is therefore not simply a matter of identifying the use that produces the highest theoretical price. It requires understanding what is physically possible, legally permissible, financially feasible and supported by the market.
A Fast Sale Isn’t Always a Successful Sale
Landowners understandably like the idea of selling quickly, particularly when an offer is substantially higher than what they originally paid for the property. But speed alone is not a measure of a successful land transaction.
I have seen property placed under contract almost immediately because it was marketed according to its existing use rather than its development potential. In one particularly striking situation, approximately 40 acres of attractive farm property went under contract in less than 24 hours. Based on my knowledge of the property and its development potential, I believed the eventual sale price was more than $2 million below what the land could potentially have commanded if its highest and best use had been properly evaluated and marketed.
That does not mean every quickly sold property was underpriced, nor does it mean every tract has hidden development value. It means that before speed becomes the objective, understanding what is actually being sold should come first.
A farm may be worth more as a farm. Recreational acreage may genuinely have recreational land as its highest and best use. But when property sits in the path of growth, has access to infrastructure or possesses characteristics attractive to developers, evaluating it only according to its historical use can be an expensive mistake.
A Developer Wants to Buy My Land. What Should I Do?
An unsolicited offer from a developer can be exciting, particularly when the price is far higher than the owner ever expected. My first advice is simple: do not rush to sign anything until you understand both the property’s potential and the agreement being offered.
The offered price may be excellent. It may also be well below the property’s potential value. An informed valuation should come before assuming either one.
The contract itself matters just as much. Development land transactions often involve due-diligence periods, contingencies, extensions, assignment rights and other provisions that can give a buyer considerable time and flexibility while the owner’s property remains tied up.
I have encountered landowners who signed agreements that sounded attractive initially but allowed the property to remain under contract for extremely long periods without closing. I have even seen agreements without a meaningful final termination date.
A knowledgeable land professional can help an owner understand the real-estate and development implications of an offer, while qualified legal counsel should review the contract and advise the owner regarding its legal terms and consequences.
Before giving a buyer control of your property, understand what your land may be worth, what the buyer is trying to accomplish, how long the agreement can tie up the property and what happens if the proposed transaction never closes.
Before You Sell Land in the Path of Growth
he most important thing a landowner can do before selling property in a changing area is understand what the land is becoming—not merely what it has been.
That means looking beyond acreage and recent comparable sales. Utilities, infrastructure, access, topography, environmental constraints, zoning, planning, surrounding development, assemblage opportunities and market demand can all influence the property’s future use and value.
It also means understanding the owner’s objectives. For some families, maximizing value is the priority. Others care deeply about legacy, preserving part of the property, maintaining a particular use or even carrying the family name forward into a future development. Those objectives matter and should be part of the strategy from the beginning.
If you own land in Greenville, Spartanburg or elsewhere in the Carolinas and believe development may be moving toward your property, I can help you evaluate its current position, potential highest and best use and the factors that may influence its value before you decide what to do next.
Related Land Insight
Planning for development starts with understanding what a property can realistically support. Read How to Evaluate Development Land in South Carolina and North Carolina for a practical look at access, utilities, topography, floodplain, zoning, highest and best use, and due diligence.
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