2 New Ones in Contract & the Price of the Pandemic
At the Crest in North Branch NY, I own a few hundred acres of really pretty land with big views. Like my project in Saugerties NY where I reluctantly acquired 16 building lots in March 2020 right when Covid hit, I bought this land just about the same time, maybe a few months later. Both share similar attributes - really scary at first, then one of the best decisions I ever made - being flush with land during the Covid gold rush.
I would be in an entirely different place if those reluctant land purchases didn’t happen - because by June-August 2020, it was clear that the Pandemic was going to impact the Catskills real estate market in very positive ways as an outward migration from NYC began, and then increased speed for the next 2 years. Even though it has slowed, there are still many more buyers in the market than there ever was pre-pandemic, at prices that were hard to achieve prior.
I use the word reluctant for a few reasons - 1, these deal were actually made prior, say beginning of 2020, when the real estate market looked shaky at best. I think we hav 4 mini-ranches going up, as I hedged my bets on a tightening real estate market. 2, When the pandemic hit, it was very unclear who the winners and losers were going to be - if there were going to be any winners at all.
But owning 16 lots in Saugerties, and another 3 in Olivebridge, and a couple in Kerhonkson turned out to be fortuitous, and allowed me to sell as many houses as I could, since I had the land. And sell I did. I think we had 25 houses going up at one time in early 2021. No wonder Amanda quit, the workload was insane. It was exhausting. I definitely worked from pre-dawn, to nightfall for a year plus, making my rounds to the houses on a Saturday or Sunday - hitting 15 at a stretch. Walking through them, making lists, getting aggravated, moving onto the next one.
We bought the Crest from a money manager and NYC apartment building owner, who had built some nice projects in Sullivan County (by built I mean the infrastructure - roads, utilities, subdivision process) and then literally didn’t sell a lick for 14 years. Seriously nothing. And that is a testament to how tough the business climate was in SuCo - just downright hard. Tough, narrow lanes of success. And more than that, the distraction of a team from NYC trying to get some of these lots sold was real, and diluted their efforts at their main NYC business. But walking away from $5,000,000 isn’t easy, and acknowledging the mistake is hard.
That is, until the pandemic hit. One of my personal theories about why the economy grew so robust during and after the pandemic was because a lot of businesses and investors were able to get rid of non-performing assets - and they could do it without losing face. “It was the pandemic” was a cry you heard all around, when really the Pandemic didn’t have anything to do with EXCEPT force people to get really serious and focused, turn on survival mode, shed bad assets and focus on their core business. Equipment, software, employees, divisions, land, etc… it all had to go if it was a loser because there was no room for distraction - either capital distraction or personal distraction - as the pandemic impacts roiled through the economy. It’s true a lot of companies prospered, but it wasn’t easy by any stretch, and it took all your attention.
Also, the stimulus money sort of compensation for these losses - yeah, you might have walked away from $1,000,000 mistake, but the government gave you $800k and your core business is booming.
So a lot of people getting serious about their business survival, and being forced to cut the fat to the bone - made a lot more businesses lean and mean, and focused on the core businesses. And focus produces results.
I mention all the above because we have 2 more homes going under contract at the Crest. 2 Ranches. Finished homes. That makes 11 built and sold up there, on a plot of land the previous owner hadn’t sold a thing in over a decade.
But the bottomline for me, for us, is without those pre-pandemic decisions to stockpile some land because of being in the right place, not necessarily at the right time - meaning, embracing an opportunity even though the timing wasn't right - and I've said many times, you don't get to time opportunities, you get to act on them - I stock piled land and then was in a position of strength as the market went crazy. Little luck, little being in the game, a little willingness to take a risk all added up to not joining the fate of what a lot of businesses suffered - a lot of business prospects, but not able to act on them due to some deficiency - could be land, could be employees, could be money, could be marketing. But in the end for a lot of those companies, it was like being in a life raft in the ocean surrounded by water you can't drink. Frustrating and maddening indeed.
