Land basis per buildable sq ft
Two sites at the same price per acre can be a bargain and a disaster. Density is what you are buying. Enter a price, a lot size and the allowable buildable area to get the basis that decides whether the site pencils.
What you are paying for each square foot you are allowed to build. This is the negotiating number.
What you are paying for the dirt, regardless of what the zoning lets you put on it.
The formula
Worked with the defaults on this page: 20,000 sq ft × 3.5 FAR = 70,000 buildable sq ft. $8,500,000 ÷ 20,000 = $425.00 per lot sq ft, and $8,500,000 ÷ 70,000 = $121.43 per buildable sq ft.
What the number means
Land is priced per acre in conversation and underwritten per buildable square foot in the model. The gap between those two habits is where deals get mispriced. A half-acre site with a FAR of 8 carries four times the buildable area of an identical half-acre with a FAR of 2, so at the same headline price the second site costs four times as much per square foot of building. Per-acre pricing hides that completely.
Once you have the basis per buildable square foot you can test it against the only thing that matters: what the finished building is worth. Subtract hard costs, soft costs, financing and required profit from the value of the completed project, divide the remainder by buildable area, and you have the maximum land basis the deal supports. If the asking price sits above it, the choices are a different program, a rezoning or a density bonus, or no deal.
How professionals use it
- Developers use it to compare sites that look nothing alike, and to set a walk-away number before entering a bid.
- Land brokers quote it because it is the language buyers underwrite in, and because it makes a well-entitled site look expensive per acre and cheap per buildable foot, which is the honest picture.
- Builders and general contractors use it to sanity-check whether a program a client is describing can carry the land they already bought.
- Everyone uses it to price entitlement risk. The spread between the as-of-right basis and the basis at the density you hope to get approved is the value of the entitlement work, and the size of the bet.
Where it misleads
Three traps. First, gross versus net buildable area, which can move the basis 15 to 20 percent on its own. Second, treating a hoped-for bonus as if it were granted, which turns a speculative number into a bid. Third, ignoring what has to come off the site before anything goes up: demolition, environmental remediation, an off-site infrastructure requirement or an impact-fee schedule are all effectively part of the land basis even though they are not in the purchase price. Add them before you compare one site to another.
Miami-Dade land trades for reference
These are the development-site trades our land wire recorded in Miami-Dade, drawn from Miami-Dade Property Appraiser qualified sales above $5,000,000. We show every qualifying trade rather than a headline average, because with 9 data points spread across 6 municipalities, the median is a description of these ten sales and nothing more.
| Site | City | Price | Lot sq ft | $ / lot sq ft | Recorded |
|---|---|---|---|---|---|
| 26115 S Dixie Hwy | Unincorporated County | $10,400,000 | 139,510 | $74.55 | Mar 25, 2026 |
| Folio 2230030590010 | Medley | $6,873,300 | 63,551 | $108.15 | May 6, 2026 |
| 662 E 27 St | Hialeah | $5,950,000 | 32,540 | $182.85 | May 28, 2026 |
| 6420 Bird Rd | Unincorporated County | $5,700,000 | 20,426 | $279.06 | Apr 27, 2026 |
| 4510 Ne 2 Ave | Miami | $6,515,000 | 16,726 | $389.51 | Apr 9, 2026 |
| 710 Ne 1 Ave | Miami | $26,581,900 | 28,033 | $948.24 | May 14, 2026 |
| Folio 0232340030075 | Miami Beach | $8,350,000 | 8,477 | $985.02 | Mar 23, 2026 |
| 2740 Ne 208 Ter | Aventura | $6,600,000 | 6,180 | $1,067.96 | May 5, 2026 |
| Folio 0131370360060 | Miami | $88,750,000 | 61,197 | $1,450.23 | Mar 13, 2026 |
Across those 9 trades the range runs from $74.55 per lot sq ft in Unincorporated County to $1,450.23 in Miami, with a median of $389.51. A fifteen-fold spread inside one county over ten weeks is the point: land is priced by what can be built on that specific parcel, which is exactly why the buildable-square-foot basis above is the number to negotiate on.
Frequently asked
- What is land basis per buildable square foot?
- It is the land purchase price divided by the square footage you are actually allowed to build on the site, rather than by the size of the lot. Because two sites of identical acreage can carry very different densities, price per buildable square foot is the figure developers and land brokers negotiate on, while price per lot square foot mostly describes the dirt.
- How do I calculate buildable area from FAR?
- Buildable area equals lot size in square feet multiplied by the floor area ratio. A 20,000 sq ft lot with a FAR of 3.5 yields 70,000 buildable sq ft. If your jurisdiction limits density by units per acre, by height, or by a bonus program instead, skip FAR and enter the buildable area your zoning analysis produced.
- Should I use gross or net buildable area?
- Be consistent and say which one you used. Zoning FAR usually produces gross buildable area, which includes corridors, stairs, elevators and mechanical space. Sellers tend to quote the number that flatters the site. If you compare a gross-based basis against a net-based basis you can be off by 15 to 20 percent, which is more than most land negotiations are actually fighting over.
- What is a good land basis per buildable square foot?
- There is no universal number. It is a function of what the finished product sells or rents for in that submarket, the hard and soft cost to build it, and the return the equity requires. The standard test is the residual: take the value of the finished building, subtract construction, soft costs, financing and required profit, and what remains is what the land can support. Any deal above that residual only works if you change the program or the entitlement.