The West Valley is emerging as the hottest spot in a state of hotspots, according to Vermaland, a Phoenix-based land banking and land-development company.
Approximately $7 billion worth of solar power plants have been constructed and are operating on approximately 15,000 acres in the West Valley, according to Kuldip Verma, CEO and founder of Vermaland. The consuming of the 15,000 acres by solar occurred at a time when solar technology was not cost competitive.
Now it is one of the cheapest technologies. Over the next 10 years the solar power plants are poised to consume much more than 15,000 acres used in the past 10 years – creating a shortage of available private land.
Due to the recent influx of buyers, the availability of viable West Valley land, especially larger parcels (200+ acres), is limited due to either solar companies or big investors holding onto them for future expansions.
Also, this creates demand for smaller parcels for residential and other uses. Because of this, smaller investors are taking advantage of buying 20 to 40 acres parcels at a great value.
Investors are picking up land at a fast clip in the West Valley – according to Phoenix-based land broker Joe Dodani. Land parcel sales have rapidly picked up the pace in the last three months, said Dodani, and sales during that time have already eclipsed totals from the entire 2015 calendar year. In fact, according to MLS data, the number of West Valley acres sold in the first nine months of 2016 was double of all of 2015.
Land in the West Valley had plummeted to 5 percent of the peak values of 2006 (or had lost 95 percent of its value) and is now selling at approximately 12 percent, of those peak values. The rise can be attributed to, in part, the explosion of solar in Arizona and smaller investors picking up 20- to 40-acre parcels.
For example, in Tonopah, the U.S. Navy and Department of Energy has contracted with Sempra in the largest purchase of renewable energy ever made by a federal entity, according to Cronkite News. San Diego-based Sempra U.S. Gas & Power owns the Mesquite Solar Complex, which stretches across a 4,000-acre swath of land. Sempra recently hosted the Navy and its partners to celebrate the contract with a ceremonial flipping of the switch on Oct. 14.
The combination of the solar activity and the current price and future growth potential of the region make this the time to buy land in the West Valley, according to Dodani.
“All signs are pointing to the West Valley as the place where huge growth is and will continue to take place, whether it’s energy companies, real estate developers, or value investing,” said Verma, Vermaland’s founder.
Arizona added nearly 100,000 residents over the past year. This presents opportunities for both land buyers and energy developers.