Tesla’s recently purchased Giga Texas property set the electric automaker back $97 million. But while that sounds like a substantial sum for a 2,100-acre piece of land, the deal ended up being Tesla’s best real estate transaction for a Gigafactory yet.
The land that Tesla purchased is located just 15 minutes outside of downtown Austin, Texas. Before the electric car company decided to pull the trigger on the property after several months of negotiating and considering other locations for its next facility, it was owned by TXI Operations LP, the Austin Business Journal reported.
TXI Operations is a subsidiary of the larger Martin Marietta Inc. Martin Marietta’s most recent quarterly earnings call revealed that the company had sold the plot of land for $97 million.
Interestingly, Tesla’s purchase of the Texas land plot was the best deal the electric automaker had received on a piece of property.
Comparing the Giga Texas site to the other Gigafactory locations in terms of price per acre shows that the facility was the best deal the company has received on a plot of land to date.
In China with Giga Shanghai, Tesla purchased 214 acres of land for over 973 million Chinese Yuan, or around $139.638 million. This price breaks down to approximately $652,514 per acre.
In Germany with Giga Berlin, Tesla purchased 740 acres of land for around $48 million. This would mean that Tesla paid just over $64,860 per acre.
However, the massive land plot that Tesla purchased in Texas proved to the company’s best real estate deal to date. The 2,100-acre land was purchased for $97 million, breaking down to around $46,190 per acre.
Martin Marietta’s Senior Vice President and CFO James A. J. Nickolas and Chairman, President, and CEO C. Howard Nye indicated that a “depleted sand and gravel location” in Austin was sold for nearly $100 million.
Tesla had purchased the land under a subsidiary company known as Colorado River Project, LLC. This detail was included in the company’s presentation to the Travis County Commissioners Court, where the electric automaker outlined the economic benefits its production facility would have on the area.
Tesla received what could be considered a “wholesale price” on the land because it purchased a sizeable portion of property. The purchase price is wholly indicative of a great deal for Tesla, who will bring thousands of jobs to the area and will help the Austin region pull out of a deep economic recession that was induced by the COVID-19 pandemic.
Tesla plans to move swiftly during the development stages of the land, and the company has already started leveling the ground in Austin. Tesla plans to open the facility sometime in 2021 in time for the manufacturing of the Cybertruck, which will begin production toward the end of next year.