Episode 53: Unlocking Transitional Land Opportunities | Guest Shawn Massey, ALC
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Welcome to the REALTORS® Land Institute Podcast, the Voice of land, the industry's leading land real estate organization.
Justin Osborn: Welcome to the REALTORS® Land Institute podcast, the Voice of Land, the industry's leading land real estate organization. This is Justin Osborn Accredited Land Consultant with the Wells Group in Durango, Colorado.
On today's episode of The Voices Of Land Podcast, we're talking to RLI member, Shawn Massey, out of Memphis, Tennessee, about highest and best use in transitional land development. Shawn is a powerhouse in the commercial real estate world with nearly four decades of experience. He's both a CCIM and an accredited land consultant. As a partner at TSCG in Memphis, he spearheaded the retail leasing efforts for a multitude of high-profile developments, including the transformative Crosstown Concourse, the dynamic Liberty Park, and the community-centric Binghamton Gateway. Whether it's a major shopping center or local retail spot, Shawn's strategic vision continues to drive success for landlords and tenants alike. Welcome to the podcast, Shawn.
Shawn Massey: Glad to be here.
Justin Osborn: Man, you're a stud. I don't see too many folks with the CCIM and the ALC designation. Do you have any idea how many of our 800-ish ALCs have a CCIM?
Shawn Massey: There's about 20 or so that I think of ALCs that have a dual designation. There's a few other letters behind my name, rather organizations, but the CCIM and ALC are really the powerhouses of the designations and the classes I've taken.
Justin Osborn: Yeah, that's great, man. Well, it's... Definitely, they both come in extremely handy when we're talking about transitional land. And so tell me, how long have you been focusing on this in the Memphis area?
Shawn Massey: Off and on, on commercial real estate, about almost 40 years.
Justin Osborn: Nice.
Shawn Massey: I've been with TSCG, which is an acronym for The Shopping Center Group, for the last 23 years. And then, really looking at true land was about 2016 that I took my first land use classes. And really kind of focused in, hey, I can really make a difference bringing my knowledge of commercial to land transactions.
Justin Osborn: Well, that's great. Yeah, definitely a lot of education there that's involved. And talk to me a little bit about your process. I mean, when a seller... I'm assuming you're dealing mostly with sellers, then.
Shawn Massey: Dealing with sellers. A lot of mixed-use developers who are residential developers, both multifamily and single-family that have excess land they want me to sell or they want to develop. A lot of communities are making these developers do mixed-use projects and bringing a commercial component into it to get their entitlements. So it kind of varies on that part.
Justin Osborn: And so what are you kind of looking at when a seller reaches out to you? I mean, obviously, you can probably pull it up on the county website or on some of the land ID maps, but what are you looking at to say, okay, I know that this is probably gonna have a little bit more of a transitional land development component to it, versus an ag or a farm and ranch component to it?
Shawn Massey: I really look at what has happened around there. Looking at growth patterns, looking at road patterns, what kind of traffic count do you have? I mean, from a commercial point of view, traffic really drives demand. Looking for market-centric, usually, we know ahead of time that our clients, our commercial clients, are looking in particular areas, so when a property becomes available, we usually have a head start on it. We're probably the ones that sort it out in the first place and saying, hey, this has a great potential, but we look at market demand drivers. And those have changed since the time... I mean, 10 years ago, I was looking at, hey, we needed a shopping center with a grocery store, and a big hardware store. But today, the market drivers from many of my projects that are out in large land transactions are the proximity to schools, YMCAs, they've become the new anchors in this mixed-use world of development. The traditional shopping center that was a forte of my business for many years is kind of changing. It's going to these mixed-use, large mixed-use developments that are taking down big tracts of agricultural land, putting residential on it, putting commercial on it, and trying to make it all work together. And each community is trying to develop those type of properties today.
Justin Osborn: Yeah, I totally hear you there. We've had kind of the same flip where 10-12 years ago, there was a lot of push still for brick-and-mortar retail. And now it's really shifted to industrial. I mean, we live in a small kind of mountain community, southwest Colorado. We don't have a big interstate going by. But what's happened is just because of the COVID boom that happened five years ago, we've had so many new people move here that want to play, and they don't want to work. And, you know, that's fine. They're in a position in life they can do that. But what it's caused is all the plumbers, the electricians, the HVAC, the contractors, their businesses have been blowing up, and there's nowhere to expand. And so it's created a huge push for industrial land where somebody could have an acre, two-acre yard space, 5,000 square foot of warehouse for their equipment. And that's kind of what we've shifted to here in our market.
Shawn Massey: But how has the community reacted to that? I mean, like, a lot of times, communities don't necessarily like industrial on that transition. Or they don't really like fast food restaurants, but now you have this demand for industrial space, but communities, they're like, we want it somewhere else.
Justin Osborn: Yep. No, you're exactly right, and that's happened here. And so it's been pushed further out from town. So we've got one industrial park, if you will, in my area. We're actually in the process of developing another one that's gonna be about 12 minutes from town, and it's just where we've got to go because of exactly what you said. They'd rather see townhomes, houses, everything else, multifamily going on, the farms and ranches that are closer to city limits.
Shawn Massey: I'm getting a lot of community pushback with ideas that I might have for the community and what they... How they envision their community.
Justin Osborn: Yeah, let's talk a little bit about kind of the city, the county, whatever you deal with there. What is your typical timeframe from start to finish? If you say, all right, we've got this project. We think it's gonna be good for mixed use. Is that a three-month, three-year process going through county planning?
Shawn Massey: Going through... And I'm going to break it down because we have a large municipality, and then we have the counties and a number of local suburbs around there with their own planning departments. Ten years ago, I would have said that it's like a four or five-month process. Today, it could be three to four years. If we're just looking at a small piece of land, it's still six months to 12 months. As much as the mayor and a lot of people think... Say, 'Hey, we're pro-business, we're gonna get it done really quickly,' in reality, when you look at everything and all their approval processes and the timeframes and the changes that they want to make, it is really extended out. So if somebody has a great idea for a piece of property today, it might be two years before they can make that come to fruition. And that's a big challenge, and especially with property owners who want to sell. Like, hey, I want to sell my property, but I want to close in four months, but the buyer doesn't want to close until he has entitlements. We have a really big delta between sellers of land and buyers of land who don't want to close on a piece of property until it's fully entitled to their need.
Justin Osborn: Right. Yeah. And there's only so much they're willing to pay until they have those entitlements. And so I've got the exact same thing going on right now where I've got... My seller wants this much per his land, his 14 acres, because it borders city limits, and you can put so many homes on it. And at X amount price per lot, this is what it pencils out to, but that's the turnkey finished price. And he doesn't want to go through the entitlement process with the city to get those, but then my developer on the other side is only willing to pay this much because he doesn't have the entitlements. So it's like, what comes first, the chicken or the egg? And eventually we'll get there, but the buyer is the one that's gonna end up winning in the case because the seller...
Shawn Massey: I mean, the only thing is the seller has to play along if he wants to sell the property.
Justin Osborn: Right.
Shawn Massey: Because people...
Justin Osborn: For that price.
Shawn Massey: For that price.
Justin Osborn: Right.
Shawn Massey: People do not want to go into a project without knowing that they're gonna get the full entitlements, because if we can't build it, it's worth a lot less.
Justin Osborn: Right.
Shawn Massey: We have a project here called BlueOval City, it's the largest automobile manufacturing plant in the world.
Justin Osborn: Wow.
Shawn Massey: 4,600 acres, it's Ford EV trucks and SK Innovation out of South Korea. And there were so many speculators that, like, hey, we're gonna jump on that bandwagon. It's about 17 miles outside of Memphis, Stanton, a town of 453 people. And people started buying up land. But what they didn't understand is not as much the zoning as the utilities. There was no sewer. You paid premium prices for this agricultural land that you want to convert to the houses. We need 30,000 houses in the area, but there is no sewer. And it's just like, you see everybody shocked that... Why did you... They didn't even think about that. They just went in, 'Hey, it's a great opportunity. We're gonna jump on it. Growth here. It's a transformational project, generation-changing project for West Tennessee.' And now they're stuck with a bunch of land with no sewer.
Justin Osborn: Wow.
Shawn Massey: Even if they could get their entitlements or whatever.
Justin Osborn: So is the next step having conversations about septic systems, or is it like doing a metro district where they create their own wastewater facility?
Shawn Massey: No, it's a little bit more on that part because you really can't... You want density. So the septic doesn't work on that part. So to get density, we need sewer. We actually lobbied the state to give money to each of these communities to design a sewer system. Okay? Not to pay for it, but like, let's design it, see what's going on, and then that, from here, they can go out and [0:11:32.0] ____ and try to get sewer into these communities because they want the growth, but sewer is a big problem in West Tennessee right now. And in the unincorporated parts of our county, is the cost of that sewer, design of that sewer. We have the tremendous growth potential, a lot of transitional land opportunities. But if you don't, on the front end, research what's going on, and I think, we were so fast as a community to bring in BlueOval, which we did the right thing, the state had been working on this mega site for years, but now we're dealing with some growing pains, and how do we pay for it? How do we transition a lot of these properties? And it really is a generational project that we're dealing with, which is a good thing. Growth is good, jobs are good, but how do we house all these people, and feed them, and have other industrial projects, because with BlueOval comes a lot of industrial suppliers, and now these communities are having to have what you're talking about, industrial property zoned.
Justin Osborn: Yeah. Well, we've got a similar problem. So I sit on the board for the Region 9 Economic Development in Southwest Colorado, and that's five counties in Southwest Colorado. And we've kind of turned more from what used to be economic development to affordable housing. And so one county, we have, I won't say names, but one county we have right now, we're trying to figure out affordable housing. And the sewer tap fee is $29,000 to tap into the central sewer. And it's like, well, the developer is not just gonna eat that, they're gonna pass it on to the buyer. And then I've got another county that they're on a water moratorium for water taps. And so we've got all this transitional land around these counties which only goes so far before it hits public land, national forest where we can't develop, but we can get a lot of this development done because of the infrastructure and kind of the lack of planning that you just talked about, Shawn. This is a multi-generational decision that people weren't really thinking about in the '60s and '70s when all this stuff was put in.
Shawn Massey: It's a challenge everywhere. Again, growth is great, new businesses moving to our territory, having this stuff but not planning ahead and not talking to all the stakeholders becomes so critical. Like the economic developer for the state, 'Let's bring this business in here.' Great idea, but it was only after they made the decision and already made the deal that we have to deal with the heartache of affordable housing. I mean, that project alone requires 30,000 houses to be built. And they want it done in two years, it's gonna take 10 years.
Justin Osborn: Wow.
Shawn Massey: To get that.
Justin Osborn: Well, aside from kind of the infrastructure that we're talking about, what other kind of yellow flags or oh, no, that's a real hard red flag, I've got to make sure that we don't go that direction with this property, can you talk about?
Shawn Massey: This thing is kind of on the political front, I mean, some of... You have your physical limitations, your legal limitations. But what we talked about a little earlier on, some people that are just anti-growth, do not like change. When looking at properties and looking and analyzing them, it really becomes difficult if you sense that the community doesn't want something to happen. And that I'm dealing with in my own neighborhood, and I live inside the city. I live in a very nice historical, 150 year old neighborhood. And a developer is coming to us and wanted to build 11 town homes on a one and a half acres, $7 million development, beautiful. These are $750,000 to million-dollar town homes, but our neighborhood is up in arms because they don't want change. And that is the same as these suburbs when I'm trying to bring them a QSR restaurant or a big home improvement store, they are saying, when we bought in here, we want all growth to stop. We're the last one in, everything stops, we wanted nice, fancy, and keeping our territory nice and quiet and calm. And we're dealing with those challenges every day. And when looking at land, if the zoning makes sense, you can talk to the planners and say, 'Hey, this is good for the community,' you still have that underlying, 'We don't want it.'
Justin Osborn: Yeah.
Shawn Massey: On that part. And that's from the community. But then you have... A lot of these communities are looking at transitional land. They have planners who are thinking that, 'We don't want a utopian society.' I used my commercial fast food restaurants. They go, 'Well, we don't want any fast food restaurants. We don't want drive-throughs.' Yes, you do. I mean, my fast food restaurants that are expanding don't go into a community without knowing their customers are already there. They have credit card studies, market demand drivers. They know. And then that soccer mother who does not want to go into a restaurant wants to drive through the drive-through. But then you have the planners like, 'No, that's not what we want in the community,' and they're not really listening to the data that we are.
Justin Osborn: Yeah.
Shawn Massey: You can design something with a drive-through that looks very good with lots of landscaping. And I've seen very high-end communities throughout the whole country that have drive-through restaurants. You just got to do it properly.
Justin Osborn: Exactly.
Shawn Massey: And so it's a function. I don't like these communities, like we had an outerlying suburb that last year put a moratorium on hotels. They didn't want a low-end hotel. You don't need to do moratoriums, you just need to put design standards. If you make it all brick and it has to be five-storey, you're not gonna get your no-name motel.
Justin Osborn: Right.
Shawn Massey: You're gonna get a good quality Hilton or Marriott or higher project. So there's other ways to do it, but they again just don't want that change to take place, even though they're most likely on a property that went through a change prior to them coming there.
Justin Osborn: Well, that's what cracks me up, man, is that the nimbyism is so real everywhere across the country. And you have somebody that says, well, yeah, I know I just bought my home on a quarter-acre lot in this development, and it was a ranch before I bought it. But I don't want that ranch that I back up to to be developed. And then, what happens is 20 years later, their kids come back from college trying to make a living in the community, and there's no housing because everything's either been put in conservation easements so it wouldn't be developed, or it's so unaffordable that it can't be, and it cracks me up that the people that say, 'Oh, no, we don't want Starbucks coming here to our neighborhood,' and then a year later when Starbucks is there, they're the ones that are going through the Starbucks.
Shawn Massey: I'll give you... I fortunately represent Starbucks in my territory, and we would not have that BlueOval City if it was not for Starbucks. The wife of the general manager who's doing the site selection and run that plant was moving into a nearby community, and the first thing his wife talked about was, 'Where's my Starbucks? Where's my school? What kind of grocery store?' Starbucks had not been built there, but we announced it. So the community was able to go and say, 'Hey, we got a Starbucks coming.' So this was an acceptable area for her to live, which brought us a $6 billion plant.
Justin Osborn: No, that's great.
Shawn Massey: I mean, so there's a lot of things, it's about a quality of life and doing stuff and going on that, but it's still that nimbyism you talked about. I did about six years of my career as a site acquisition person for AT&T, building cell towers. I did 570 towers. Early on, when cell towers were 50 cents a minute, and when I had to go build those towers in everybody's backyard, I used to fight. Like, 'No, I don't want it.' But you're sitting there on your cell phone. Yes, you do. I mean, there's a technology that says a tower has to be close by for you to use your phone.
Justin Osborn: Absolutely.
Shawn Massey: And now everybody goes there, but it's that nimbyism, that rejecting change or not-in-my-neighborhood type of thing that is probably the biggest challenge to transitional land. Good planning, building good housing... I mean, every time you talk about multi-family transitional housing, everybody thinks it's a Section 8 project, but we have apartments that rent for $3,000 to $4,000 a month and like that. That's more than my mortgage. I mean...
Justin Osborn: Yeah.
Shawn Massey: And like, use a little common sense here, not everybody wants to live in a big million-dollar house or big ranch. Some of them want apartments. I mean, people are empty-nesters. They want to be able to lock the door and go away for four months to Florida. So we have to counterbalance that nimbyism, that restricting change and that some change is good. And if you listen, and we can... And that's us as land planners or land brokers. We have to work with the community to show them the value to the developments that we're gonna bring in. The developers we're gonna bring in are gonna be high-quality, good developers who are gonna pay attention to your needs, but also bring you some stuff that you don't even think you need.
Justin Osborn: Yeah.
Shawn Massey: Like retailers and restaurants, and all that part. I mean, we just don't need that at home anymore, but if you go to restaurants, you need it.
Justin Osborn: Absolutely. Yeah, that's well said. So let's say you're mentoring a new agent, hypothetically here, and they're selling residential land, and they want to get into transitional land. What are kind of the top two or three things that you would throw out to them as kind of the best path to get into this and really understand it well?
Shawn Massey: I mean, the best path is get a good education in what you're trying to do. And that comes through ALC courses. I mean, if you want to move from residential and get into land, recreational, transitional, you need to bring something of value to your clients. And that comes from your education. Taking the Transitional Land class, the Land Investment class, if you don't talk those questions and... I really tell as a dual designee with CCIM and ALC, you might want to take your CCIM classes, whatever on that part. They both go over. I think when dealing with transitional land, ALC more purposely talks about it where CCIM is kind of a broad brush over the topic. So I think, if I had a young agent, I'm like, go take a couple of ALC classes, go take a CCIM thing. The great thing about both programs is you can fast-track, you can get both designations. I mean, I was... When I got my ALCs, I got it with taking three classes because I had already had my CCIM.
Justin Osborn: That's great.
Shawn Massey: And so it's... I would much rather, and for me, it's a different opinion, is I can take... I have to take continuing education classes all the time to keep my licenses. I have three states, I'm always taking continuing education classes. I can take something, fair housing, or conflict resolution, or whatever. Or I can take classes... And this is what I tell young people: take classes that will give you knowledge that you can help clients make the best decisions. So yes, ALC classes, CCIM classes, are more expensive, but the return on investment of your time and your money is gonna be far greater taking that path. And then that's from an education point. The second one is, if you're gonna do transitional land, go sit in your city council meetings, go county commission meetings, and see what other developers are going through and what the zoning process is, and what questions and what kind of temperament that we have with the City Council. I mean, you can go to a meeting and say, hey, if they're pro-growth, are they pro-anti-growth? I mean, just by sitting in that meeting, they're gonna show their true colors on that forum.
Justin Osborn: Yeah, it's great to kind of sit in those meetings and get a feel for what direction, what path the city or the town is going. And the education component is huge. And, yeah, I appreciate you mentioning what you did, Shawn, about taking those classes, because RLI does such a good job at offering those classes, at boot camp. There's several chapters around the country, in different states that offer these classes. There's pretty much no excuse anymore not to be able to get educated on this stuff, because they even offer online classes. And so the material is out there. And if you guys just go to rliland.com, you can go there and see where the classes are being offered. We've got a competency factor that we have a fiduciary duty to make sure we're representing our clients' best interest. And Shawn's correct. When you get educated on this stuff, you can represent them better than anybody else. And if you're not there yet, you can go on the same website under the Find-a-land-consultant tool, and you can find people like Shawn that specialize in this in other parts of the country, and get a great referral out of it. Make sure your clients are in good hands. Shawn, anything else here that you have? We're kind of wrapping up the last few minutes.
Shawn Massey: Probably the biggest thing is... We touched on a little bit is underestimating the time that it takes to get something zoned. Okay? Again, it used to be so easy to say... There was consistency, you go into it, but there's so many factors from entitlements that you need to know about zoning. You need to know that it's gonna take longer. If you estimate six months, plan on a year. I mean, if you really need to go in, a lot of transitional land, people don't really understand the impact to utilities. I mean, you and I talked about it, sewer, water, electrical, I mean, getting a road there. Is that road gonna be torn? I'm doing a project right now, I already have 75 houses built. We have our first commercial building, and the community decided to come in and tear up my whole road in front, and as we're doing the road. Fortunately, they will be finished before we would or take off and see for the commercial part, but it's those things that you need to really understand. You gotta spend time doing research and going on what's happening in the community. Talk to people. Talk to the planners in your community. They're a wealth and knowledge that takes place when just talking to people. I know you talked about online classes. I would really encourage it... I'm a big encourager of taking classes in person, just for the networking possibility. If you want to talk about referrals, you meet someone in class that's from another state, you become friends with them, and it makes it really easy to refer business to a friend.
Justin Osborn: I highly agree with that. Well, Shawn, thank you for joining us today and helping our listeners really kind of understand all the considerations to successfully owning transitional land. If one of our listeners wanted to get in touch with you directly, what's the best way for them to do that?
Shawn Massey: Just call my phone number at 901-461-7070, or email me at shawn.massey@tscg.com
Justin Osborn: Excellent. Well, folks, remember, for more expertise on land, real estate topics, be sure to check out the RLI blog, follow us on social media, and of course, tune in for upcoming episodes of the Voices of Land Podcast.
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