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Disney World: The Greatest Land Story Of All Time

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[Update: We are re-sharing this on Oct. 1, 2021, the 50th birthday of Walt Disney World in Florida. Some of the information in the original post below may be outdated.]

The story of how Disney World’s land was bought is as fascinating as any of Walt’s fairy tales. Who would have guessed that buying the land for such a wholesome place like Disney World would be such a wild ride? This is the story of one of the most successful transitional land sales in American history and what we can learn from it today.

In the 1960s, Walt Disney was looking for a place to build a second Disney park. Disneyland in California was a success, but Disney didn’t like the businesses that cropped up around his theme park. He wanted more control over the surrounding land for his next park.

disney world

Disney had a laundry list of requirements for the new land. Not only did it need to be plentiful and affordable, the land also needed to have pleasant weather year round so guests could enjoy the park 365 days a year. It also had to be near a major city with strong infrastructure and highways.

He looked at land in California and New York, but the properties were too small or the land was too expensive. Finally, Disney found exactly what he needed near Bay Lake in Orlando, Florida.

Florida had everything Disney was looking for in a location. The landowners at the time were happy to sell their swamp land, which they thought had little to no value. So, Disney and his associates bought the land through shell corporations with names like M. T. Lott (you can’t make this stuff up!).

The reason Disney used shell companies was that he knew the prices would skyrocket as soon as he was revealed as the buyer. If land sellers knew a millionaire wanted their land for a project that would be even bigger than Disneyland, they could set their prices as high as they wanted.

disney world castle landAs more and more land was bought under shell companies, locals became suspicious. They didn’t believe someone named M.T. Lott was actually buying up the land. Rumors swirled about who could be buying up this land. Some people believed it was NASA buying land to support the nearby Kennedy Space Center. Other names floating around were Ford, the Rockefellers, Howard Hughes, and of course, Disney.

Disney successfully bought 27,000 acres of land for cheap via his shell corporations. He might have been able to buy every single acre like that had he not slipped up in an press conference when editor Emily Bavar asked him point-blank if he was the one buying up the land. Disney was so caught off guard by the question that it was clear he was the buyer. As soon as it was revealed who was buying the land, prices shot up. Some land even skyrocketed up to $80,000 an acre!

When the Florida government found out who was buying all the land, they gave Disney the right to make decisions about zoning. This pleased Disney, who didn’t like to answer a lot of outsider questions. The Disney team transitioned the land by adding dirt to the swamp land, making it easier to build and walk on.

Today, Disney World takes up twice as much land as all of Manhattan. A sizeable amount of that is undeveloped. As per Disney’s request, around a third of the land is protected wetlands.

The Orange County Appraisers office has appraised Disney World’s property value to be over 1.3 billion dollars.

There are so many amazing lessons we can take today from this transitional land story. Here are just a few:

  • Transitional land can be extremely profitable.
  • Even land that some consider ‘low-value’ can become profitable when put to its highest and best use.
  • When selling land, it can pay off to do a little digging to find out who your client is!
  • Have a clear list of what you need out of a property.
  • The perfect land for you might not be in the first place you look.
  • Prepare yourself for tough questions ahead of time if you have to do a press conference.

Sometimes, truth really is stranger than fiction. In the case of the transitional land sale that turned into Disney World, we hope this wild story reminds you to always dream big. If you are interested in learning more about transitional land real estate transactions, check out our newly updated Transitional Land Real Estate LANDU course by checking our Upcoming Courses page.

All About Transitional Land

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Transitional land. It’s a new word for a concept that’s been around for ages. Even though many people sell transitional land every day, there is still a stigma surrounding this risky land type. What many people don’t know is that transitional land can turn out to be gold mines. Disney World is one of the most famous examples of a successful transitional land. The land started off as swamp and was transitioned into the happiest place on Earth! Transitional land can be a huge risk, but, if researched and marketed correctly, could turn into a land sale that might change your life or even the world.

Transitional land is a property that is in the process of changing from one form of land use to another. For example, a hunting property might be transitioned into farmland if someone discovered a soil type perfect for their specific crop. Farmland could be transitioned into residential land if it’s located near a big city. Transitional land is often shaped by the needs clients and the current state of the land market.

For transitional land to be successful, you need to determine the best use for your land type. If you are new to land types, here are just a few examples:

  • Agricultural/farm land
  • Commercial Land
  • Ranchland
  • Recreational land
  • Residential land
  • Timberland

Each of these land types of land real estate require different soil types and amenities. For example, if someone is using recreational land for hunting ground, they would need land where animals could feel at home. Someone developing residential land would want the opposite.

Once you have determined what land type is best for your property, it’s time to hit the books. This is where transitional land gets tricky. Selling transitional land requires an in-depth knowledge about the state of the market and different land types. In her Transitional Land: Finding the Highest & Best Use article, RLI’s Marketing Manager Jessa Friedrich explains how selling a transitional land property is a completely different world than traditional properties:

“In traditional real estate brokerage, the agent lists an existing property with a known use and markets that property to the users for that type of property. What makes Transitional Land properties different is the need to determine the market value accurately and then market the property according to its highest and best use, which is different than its current use, in order to increase the property’s value and thus the profit.”

The biggest risk of selling transitional land is thinking it will be exactly like selling other land types. Since transitional land is such a unique type of land sale, you’ll want to be sure to work with a land expert. Land experts will help you determine the best land use for your land type and help you get the best market price.

The first thing you and your land expert will want to do is determine what the best use for the land would be. Here are some questions to help guide your decision making:

  • What soil types do I have on my land?
  • What would be the most cost-effective use for the amenities on my property?
  • What sort of crops do best on my land?
  • Can my land support livestock? If so, what types and how many?
  • What land types are in high demand in my area?
  • Do I want to invest in transitioning the land myself, or should I search for buyers who want to buy my land as it is?

The actual ‘transitioning’ of the land depends on what your client wants. In the Disney World example, Disney bought the land with no modifications on it to keep the price of the land low. If your buyers have a similar mindset, that makes things easier for you. Some buyers want to buy the land that’s already been transitioned. In these cases, you need to be sure there is a significant demand for that land type. You don’t want to spend a lot of money and time if no one will buy the transitioned land.

Many land sellers are still cautious about selling their land as transitional land. There is so little information out there about transitional land that it is understandable to stay in familiar territory. However, transitional land has the potential to be extremely profitable. It requires extensive research and working with a land professional, but if you are willing to put in the hard work, you may make it big on your next land sale.

To learn more, check RLI’s schedule of upcoming courses to see when their next Transitional Land Real Estate course will be offered or check out this RLI Hot Topic Webinar Recording on Diamond In The Rough: Transitioning Land for Development.

Laura Barker is a Marketing Assistant Intern for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

Transitional Land: Finding The Highest & Best Use

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Land. A word some commercial agents fear and some see as an opportunity. Make sure you are one of the latter. While some agents hesitate when they see a property come up involving land, like a vacant lot or tract of farmland on the outskirts of an urban area, savvy agents know that these can be diamonds in the rough awaiting discovery. Transitional land real estate properties are just that and being able to identify and properly market these types of properties can be quite lucrative.

THE DIRT ON TRANSITIONAL LAND

The purpose of a real estate brokerage is to sell a property at its market value and earn a reasonable profit for the client, as well as for the agent assisting with the transaction. In traditional real estate brokerage, the agent lists an existing property with a known use and markets that property to the users for that type of property. What makes Transitional Land properties different is the need to determine the market value accurately and then market the property according to its highest and best use, which is different than its current use, in order to increase the property’s value and thus the profit.

It is optimal for an agent listing either a residential or commercial property to utilize a comparative market analysis (CMA) to bracket the price range within which the property should sell. Then, working with the seller, the agent determines an asking price and prepares the seller to accept a sales price in this range. Whether you’re a commercial specialist working with a strip center or an industrial specialist working on a warehouse listing, there are comparable sales in the market place to utilize in determining and estimating the market value of the property to be listed.

THE DOWN-LOW ON HIGHEST & BEST USE
What makes transitional land a unique area of real estate brokerage is the fact that the ultimate use of the property might not be easily recognized. In fact, the very nature of transitional land is that the highest and best use is dynamic. Typically, when we think of transitional land, we think of an agricultural property whose highest and best use changes to commercial. Everyone can envision the new big box development being built on the land that was farmer Brown’s pasture. However, properties can also transition from one commercial use to another or from agricultural to industrial or recreational. While we normally think of a transitional property increasing in value because it has changed to a more profitable use, we sometimes see values decrease as neighborhoods deteriorate or governmental actions dictate a change to a use with a lower return.

In any event, until the highest and best use can be identified, the market value cannot be determined and the market cannot be targeted for the property to be sold.

Much of the knowledge needed for conducting transitional land transactions is founded on appraisal principles, which will allow the broker to identify the highest and best use of a property, and then estimate its market value. It is important for the student to understand these principles in order to apply them in the process of determining market value. It is also important that an agent be able to explain these principles to a seller in order to get the listing in their real estate practice.

WHAT’S YOUR MARKET[ING]?
Once the highest and best use has been determined and the market values estimated, an agent will then develop the marketing strategy. At this point, they must identify a target market, create a marketing strategy, and start marketing to these buyers. This is the area of brokerage that most agents enjoy.

How well an agent does in this area and how successful they are in their overall brokerage of transitional land will depend a great deal upon the work they have done in identifying the highest and best use and determining the market value.

TRANSITIONING TO TRANSITIONAL LAND

In transitional land, as in any other type of brokerage, preparation is the key to success. To be prepared, you must practice what you have learned. Here are some ways to get started today:

  • Take a second look at inventory using the insights gained in this article to see if the highest and best use of these properties has been properly identified.
  • Review the property’s marketing plan and marketing materials to see if they meet the standards expected.
  • Analyze potential new listings with these ideas in mind and you may find that your success rate in obtaining a listing and closing the sale increases.

Conducting land real estate transactions, including transitional land transactions, requires specialized expertise. Before attempting to conduct land transactions, agents should acquire the proper education and knowledge through programs like the REALTORS® Land Institute’s (RLI) LANDU Education Program.

Interested in learning more?

*Content from this article pulled from RLI’s Transitional Land Real Estate course.

This article originally appeared in the Summer 2018 NAR Commercial Connections Magazine.

 

Jessa Friedrich, Marketing Manager, REALTORS Land InstituteAbout the author: Jessa Friedrich, MBA, is the Marketing Manager for the REALTORS® Land Institute. Jessa has a Bachelor of Science with a dual major in Business Administration and Marketing as well as her MBA specializing in Marketing. She has been with RLI since March 2015 leading their marketing, branding, and communications.