Development
Why Real Estate Development Is One of the Smartest Investments You Can Make
The same markets that have made Bay Area real estate so valuable have also created enormous pressure on the existing housing supply — and that pressure is reshaping how investors and property owners think about what they hold. Many of the multifamily properties we sell were built in the 1950s and 60s, when density wasn’t a priority and land was plentiful. Decades later, those same sites — often underbuilt, aging, and increasingly costly to maintain — represent something far more valuable than the structures standing on them: an opportunity to build something new.
Thomson·Danforth has developed a meaningful practice around development sales, connecting property owners with developers and helping both sides structure transactions that reflect the true opportunity in the land. While our focus is primarily residential and mixed-use development, we also work with commercial property owners navigating rezoning, entitlements, and the growing wave of office and retail sites being repositioned for housing.
The Case for New Housing in California
California’s housing shortage is well documented and, by most measures, still worsening. The Bay Area sits at the epicenter — a region with extraordinary job growth, constrained geography, and decades of underbuilding. The state and local governments have responded with a growing and evolving body of legislation designed to accelerate housing production: streamlining approvals, reducing entitlement risk, enabling higher density, and in some cases allowing residential development on land that was previously zoned exclusively for commercial use.
For developers, this legislative tailwind meaningfully changes the math — compressing timelines, improving project economics, and opening up sites that wouldn’t have been viable just a few years ago. For property owners, it expands the pool of capable buyers and can significantly elevate what the land is worth. We stay current on the programs and policies most relevant to our markets so our clients don’t have to.
For Developers: Why Development Works
Higher Returns on Well-Executed Projects: Successful ground-up development typically generates returns that are difficult to match through acquisitions alone. By creating value through the development process itself — entitling land, designing thoughtfully, and building efficiently — developers can capture upside that simply doesn’t exist in stabilized assets.
Control Over the Product Development: gives investors and builders direct influence over what gets built — unit mix, design, sustainability features, target market, and price point. In a region with deep demand across multiple housing types, that control translates into real competitive advantage.
Strong Demand Across Housing Types: From market-rate condominiums and apartments to townhomes, ADUs, and affordable housing, demand across the Bay Area housing spectrum remains structurally strong. New product commands premium pricing and tends to lease or sell quickly in supply-constrained markets.
Community Impact: For many of the developers we work with, the appeal isn’t purely financial. Development is one of the few ways to meaningfully shape the built environment — to create housing that improves a neighborhood, serves a community, and leaves something lasting behind.
For Land Sellers: Why Now May Be the Right Time
Maximize Your Land Value: Older, underbuilt, or deferred-maintenance properties often have more value in the land beneath them than in the structures above. Understanding that distinction — and marketing to the right buyer — can result in a significantly higher outcome than a traditional investment sale.
Flexible Deal Structures: Development transactions can be structured in ways that a traditional sale cannot. Options, phased closings, and ground leases are all tools that can help sellers maximize value while managing timing and tax exposure. For sellers who want to remain involved, joint venture and syndication arrangements offer a path to participate in the upside of what gets built.
JV and Syndication Opportunities: Rather than simply selling the land, some owners choose to contribute their property into a joint venture or syndication with an experienced developer. This structure allows the seller to retain an ownership stake in the finished project — converting a one-time sale into an ongoing equity position with the potential for significantly greater returns.
1031 Exchange Compatibility: Development land sales are generally eligible for 1031 tax-deferred exchange treatment, allowing sellers to defer capital gains and redeploy proceeds into other investment property. (See our 1031 Exchange page for more.)
What We Do
We advise property owners on development potential, connect them with qualified developers and capital partners, and help structure transactions that reflect the full value of what they own. Whether you’re a landowner trying to understand your options, a developer sourcing your next site, or an investor exploring a joint venture, Thomson·Danforth brings the market knowledge, relationships, and transaction experience to help you move forward with confidence.