Beating the Vultures to Prime Land Pickings
A dozen or more “opportunity” vulture funds were making a lot of noise a little over a year ago, waiting to strike when the time was ripe. But for a smattering of land fund deals, the time never became ripe.
During the back half of 2008, bank land asset portfolios became enmired in the broader toxic asset seize-up that remains an 800-lb. gorilla in the financial system’s living room, and the global destruction of value declawed many of the vultures. What’s more, pro land sellers are not ones to roll over and die just because it’s the toughest real estate marketplace since the Great Depression.
A much-anticipated reset of lot prices from a dollar to cents-on-a-dollar became a full-fledged standoff. So far, while all eyes are on Lehman-SunCal and LandSource’s Newhall Ranch as potential game-changing revaluations, a broad-based lot re-pricing has been slow to arrive to the market.
Still, it seems that where opportunities are cropping up as an exception to the rule, it’s not vulture funds but real live home builders who are jumping in to snatch them up.
In a post yesterday, we talked here–”Home Builders Join in Renewed Pursuit of Land”–about home builders positively teeming on bids for prime-location, finished lots in the Phoenix market.
We also hinted in an earlier post that we’d start reporting word of as many “start-ups as shut-downs.”
This morning, we received this press announcement:
IRVINE, Calif. – June 12, 2009 – Is a recession the right time to build new homes? According to Trumark Companies it is. The 20-year land development company that designs and entitles quality residential neighborhoods and builds office, R&D and retail properties is taking advantage of the market downturn to launch Trumark Homes – a homebuilding company unencumbered by the financial challenges faced by existing builders.
Trumark Homes recently acquired 4.38 acres of land in the Inland Empire community of Upland, Calif. The homebuilding company will develop Wyeth Cove, 39 single-family courtyard homes ranging in size from approximately 1,717 to 2,401 square feet. Construction is set to commence in August 2009; opening date as early as 2010.
“We will be the new generation of home builders who are responsive, focused and unburdened by legacy issues, large bureaucratic systems or broken projects,” said Michael Maples, principal of Trumark Homes and co-founder of Trumark Companies. “Our strategy is to leverage our real estate knowledge and expertise to build a large West Coast homebuilding company targeting both Northern and Southern California markets, initially targeting the distressed market niche.”
Those who know and played the Resolution Trust Corp. game in the early 1990s are excited right now. They look at the vultures and see a possibility for a light poultry-like lunch.
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