Carried Land Play

A strategy in real estate development where a developer purchases a property with in-place income (i.e. land or buildings that are earning income from rent), and then uses that income from the property to carry the cost of ownership of that property until a higher and better use is ready to develop. At the end of the carry period, the developer will either demolition the existing improvements and replace them with new improvements that can be leased at a higher rate or add new improvements alongside the existing improvements.

Either way, the in-place income carries the cost of ownership until such time that a new configuration yields a much higher income. You can see this concept modeled in my Apartment Development Model here: