The last group of sales in 2011 includes the largest bulk transfer of building lots in years.
In the heyday of the subdivision business in the Hamptons—the 1980s—numerous tracts of land remained undivided. At that time, developers would often acquire these tracts, work through the year-long subdivision process and sell some or all of the lots as vacant parcels following the filing of the subdivision map. At this time however, very few large blocks of land remain in private ownership.
Today most land transfers are individual building lots. In this case, 22 vacant lots were sold from the same group of sellers, to the same purchaser, for a total of about $13 million.
Readers will note that the sellers held these lots in a combination of four different names because lots held in the same name, which are adjacent to one another can sometimes be merged into one parcel by zoning laws. In order to prevent this, adjacent lots are typically held in multiple names, a practice called “checkerboarding,” which the buyer, who purchased all these lots in one name, might be wise to follow.
The lots are clustered along Fair Hills Lane, Shady Path and Brick Kiln Road, just north of the intersection of Brick Kiln and Scuttlehole roads in Bridgehampton north. Most of these lots are around 1 acre or slightly larger.
It’s a fundamental tenet of real estate law that every property is unique, with special attributes and values. For this reason, sellers who default on contracts must turn over their property to a buyer who has performed on a sales contract, and cannot simply refund the buyer’s money.
Rather than going through the complex exercise of settling on a value for each of these unique lots, in this case it appears that for tax purposes the parties simply assigned a value of roughly $590,500 to each lot—clearly a “bulk discount” but one which is likely to confuse appraisers and buyers who come across any of these sales individually without realizing that they were part of a larger transaction. This bulk discount is quite dramatic as these sellers unloaded many of these lots for between $770,000 and $1,250,000 in 2004 and 2005, even before the 2007 market high.
There have been few sales of vacant land in Bridgehampton north this year, with far more interest in building south of the highway. These 22 sales of vacant land alone are likely more than the total number of prior land sales for the year in Bridgehampton north, and will lower the year-end land value statistics in the neighborhood.
Someone has made a big bet on the future of Bridgehampton north. And although the buyer’s plans are unknown, it will be interesting to see whether he or she attempts to build these parcels out, or holds them for long-term capital appreciation, or some combination thereof.