We investigate how local information externalities affect investments in tangible durable assets via real options. Using geocoded transaction-level data on US commercial properties from 2000 to 2018, we find that investors have a higher propensity to invest in a property for immediate redevelopment when its capital intensity and type of commercial activity differ from those of recently built nearby properties. Information externalities affect'buy-to-redevelop'investment strategies as much as the asset capital depreciation-a main determinant of real option exercise highlighted in the literature-and can increase up to 30 percent the investors' willingness to pay to invest in the property.