02 Dec Another trip to the BLM Land Auction in Las Vegas
MrPeng of Pengxin Corp in Shanghai wanted to drop by Las Vegas to learn how we acquire quality assets at bargain prices. A successful businessman in China, Mr Peng has grown his construction company Pengxin Corp to be a formidable force in Shanghai. Given the timing of his arrival, we decided to bring him to the BLM Land auctions which take place twice a year. Here we bid for “raw” un-entitled land parcels, which the government puts up for public auction. Buyers here include investors, homebuilders and institutional scale private equity funds who will try to outbid each other while trying not to go too far/high due because significant risk to the value of the land remains when no hard-zoning has been completed. Essentially, the government is trying to encourage development by enticing buyers with low prices to shoulder the risk of obtaining zoning approvals.