I recently had the privilege of meeting Judd Herberger, a family name that is well known in all of Arizona. While I had attended performances at the Herberger Theater in downtown Phoenix on numerous occasions and heard their name around town, I was unfamiliar with their business. The story Judd told me about how his parents began buying remote Arizona land deeply resonated with me, since our family's business follows a similar model.
In the 1940s Kax and Bob Herberger, Judd's parents, were drawn to the small but growing town of Phoenix, its distinct scenery, its people and culture. During this time they began buying desert land in Phoenix, a few acres at a time, eventually becoming the largest landowner in Arizona.
I was surprised to learn about all the criticism and doubt the Herbergers faced in their decision to buy land in Arizona. Bob's father incredulously asked him, "Why are you buying that worthless land? What can you possibly grow out there?"
"People," Bob replied. "Someday that land is going to grow people."
When Kax and Bob Herberger moved to Phoenix in 1949 the population of Arizona was approaching 750,000, with almost half of those living in Maricopa County where Phoenix is located. Over the course of the next 50 years, the population of Phoenix and the state would grow exponentially. In 2000, the U.S. Census registered the state's population at five million, with more than three million living in Maricopa County itself.
Just as Bob Herberger had predicted, the value of the land they purchased, had skyrocketed as residents and visitors flocked to Phoenix and Scottsdale. The largest piece of land the Herberger's had purchased was a 760-acre tract located between Scottsdale Road and 64th Street and north of Thunderbird Road in Scottsdale. That area is now a resort community named Kierland, Kax's maiden name.
Today, Kierland Commons feature single-family residences, apartments and offices, as well as dining and retail establishments at the Kierland Commons main street shopping area. In 2002, the Westin Kierland Resort & Spa opened with the 27-hole Kierland Golf Club. The area is positioned for future growth and is a testament to the Herberger's vision.
This story resonated with me since our company purchases raw land in Arizona in areas in which currently have little to no development. Similar to the criticism the Herbergers received years ago by well-meaning family members, my father has received criticism and skepticism from friends and family questioning his decision to invest so heavily in an area that is so remote.
Just like Bob Herberger, my father also believes that someday the land that we buy will grow people, too. As the population of Phoenix grows, the areas we invest in will also grow. There is a common misconception that there is an abundance of raw land in Arizona. The reality is only about 17 percent of all land in Arizona is private; the rest belongs to various government agencies. This means the portion of land suitable for development is already small and continues to shrink. As the population grows, homebuilders, developers, and other investors will eventually start buying raw land.
Here is an example. We own a residential subdivision called Sonora Ridge Estates, a custom, one-acre lot community located along the base of the White Tank Mountains west of downtown Phoenix. Sonora Ridge Estates is a gated community with gorgeous mountain views. We purchased the land in 1995. At the time there was absolutely nothing out there except some rabbits, scorpions, and the occasional snake. The closest development was nearly an hour away.
Confident this area would eventually grow people, we brought water infrastructure to portions of the site. During the peak of the market these lots were selling for 20,000 percent over what we had paid for them in 1995. Currently, there are several luxury houses that have been developed in the community. Some predict this area may one day be the premiere area to live in Phoenix, much like Kierland became the fashionable area to live years after the Herbergers bought that land.
Growing up in Phoenix, I have a deep love for this city. There is so much charm in its natural beauty, the history, and the people. As time passes I believe more and more people will migrate here and make Arizona their home. We are making the decision to invest in the growth of this city, and believe one day this will benefit the metropolitan area in a positive way.
In other words, buy it, and they will come.