Land Sets Time

The price paid for land enters the project before the building is designed. It affects how much income the finished asset must support and how much room remains for construction, financing and other costs.

The land starts carrying on day one

Illustrative simple carry allowance = original land basis × annual rate × months / 12. It is neither a compounding loan schedule nor a measured land-value decline. “Ten-percent allowance” means accumulated carry equal to 10% of basis.

Time matters because land and other capital may remain tied up through approvals, design, construction and lease-up. A longer path can increase carrying costs, but the amount depends on the financing structure and schedule. The calendar is part of the feasibility question, not a fixed cost estimate by itself.

Knowing the land basis can make a program conversation more concrete. Two projects on similar sites may face different constraints because they began with different acquisition costs. That does not mean the design must maximize density or cut amenities; it means the team should understand which assumptions are shaping the trade-offs. Acquisition basis is one input among several; changing design cannot erase a poor assumption about rents, timing or financing.