Why Dallas’ Kyle Bass is buying thousands of acres of undeveloped Texas land

Kyle Bass likes to bet big. So it’s fitting that the Dallas-based hedge fund manager, who shot to fame shorting mortgage debt in the lead up to the global financial crisis, is now fixated on the most abundant commodity in his home state: land. The market for Texas dirt, Bass said, “is big, and it’s real.” Bass, 53, is no stranger to bold macro wagers. In the past decade and a half, he’s taken on Europe’s sovereign-debt market, China’s economy and the Hong Kong dollar, typically using esoteric financial instruments to make his high-risk investments. These days, he’s snapping up swaths of largely undeveloped Texas land — a much more basic and tangible asset — as a way to attract some of the trillions of dollars earmarked for ESG-related investments that are evaluated for their impact concerning environmental, social and governance factors.

Conservation Equity Management, an investment firm Bass started last year, has spent $90 million acquiring six properties totaling 37,000 acres. His haul includes a West Texas ranch featuring the ruins of a frontier fort, a heavily wooded timber tract in East Texas, a wildlife corridor near the Louisiana border, and a holding in the heart of a $240 million high-tech development outside Austin. “I’m taking all of my expertise developed over decades of analyzing global macro situations and geopolitical situations and developing a thesis on Texas land as an asset class,” Bass said in an interview with Bloomberg. Land is attractive because of its almost limitless demand, Bass said, and it helps that Texas has plenty of it. There are 142 million acres of privately owned ranches, farms and forest in the state and values have skyrocketed. The median price per acre of rural land was $4,286 as of the second quarter, up 123% in the past decade, according to the Texas Real Estate Research Center at Texas A&M University.