Every time I say "infill," people nod like they know what it means. A lot of them do not. And it might be the single most important word in our entire investment thesis.
Here is the definition. Infill refers to locations that are already built out, where the surrounding area is fully developed and there is little to no vacant land left to build on. It is the opposite of greenfield, which is raw, undeveloped land on the edge of a metro where anyone can come in and build something new.
That distinction is everything, because it determines whether supply can respond to demand.
In an infill location, you cannot make more land. It is surrounded by existing buildings, roads, homes, and businesses. If demand rises, supply physically cannot keep up, because there is nowhere to put the new product. That scarcity protects your rents and protects your basis. A competitor cannot simply build next door and undercut you, because there is no next door to build on.
In a greenfield location, the opposite is true. Demand rises, a developer buys cheap land at the edge of town, and new supply floods in. Rents flatten. Pricing power evaporates. The thing that made the location attractive is the same thing that lets everyone else pile in.
This is why we like IOS deals in infill areas. The exact thing that makes these deals hard to buy, scarce and competitive, is the thing that makes them hard for anyone to replicate once we own them.
Infill is not just a location. It is a supply constraint you are buying on purpose.
When you evaluate a deal, do you weight the location itself more heavily, or what could get built around it?
Wednesday Real Estate 101: Infill
