Property Valuation
What is 'residual land value' analysis in Delaware real estate development?
AThe value of undeveloped land remaining after partial development
BA method of determining what a developer can afford to pay for land by subtracting all development costs and required profit from the projected sale proceeds of the completed project✓ Correct
CThe assessed value the county assigns to vacant land parcels
DThe value of a property after all existing improvements are demolished
Explanation
Residual land value = Gross Development Value (projected sales revenue) − Total Development Costs (construction, financing, soft costs) − Developer Profit. This 'work backward' analysis tells a developer the maximum they can pay for land to make the project economically viable. It is essential in Delaware feasibility analysis before land acquisition.
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