Patient Capital and School Trust Real Estate Programs

This paper examines how school trusts that sell land for urban development may financially benefit by being patient and holding land for the longer term rather than selling it for shorter term gains. Three basic characteristics of the urban land market provide for such benefits including the underlying price path to urban development, real estate cycles, and site rent. In addition, active management and time tranching may be further means by which patience can benefit school trusts in the long run. The results of interviews with land managers are reported, research questions identified, and preliminary management principles suggested. The overall conclusion is that under certain circumstances, patience may be a virtue and may produce greater financial gains for school trusts that are in the process of selling land for urban development.