HOUSTON – (Realty News Report) – Brookfield Residential has agreed to acquire Newland, one of the nation’s largest master-planned community developers.
Newland has developed some of Houston’s largest master-planned communities, included the 8,100-acre Cinco Ranch in the Katy area on the west side of Houston.
Also included in Newland’s properties is a relatively new 3,642–acre community called Elyson in the Katy Independent School District. Elyson will have 6,000 homes upon completion. Elyson ranked 7th in Houston are new home starts in 2020 with 453 single-family starts, according to Zonda.
Newland also developed 2,000-acre Telfair community in the Sugar Land area.
Acquiring Newland will give Brookfield Residential entry into nine cities and add additional strength in five other cities. Along with the acquisition of the management company, Brookfield Residential is also acquiring the (5%) General Partner’s equity interest in 15 (of the 20) master-planned communities that Newland is currently developing.
This strategic acquisition significantly widens the geographical footprint to complement Brookfield Residential’s platform of master-planned communities and to leverage Brookfield Properties’ development capabilities into key major growth cities. Joining forces introduces the new markets of Dallas-Ft. Worth, Houston, Atlanta, Tampa, Seattle-Tacoma, Portland, Raleigh-Durham, Wilmington, and Charleston. It will also expand offerings in San Diego, Denver, Austin, Phoenix and Washington D.C., where each developer has a presence today.
“This acquisition is an investment in our long-term land business, allowing us to leverage our land development expertise to become a large-scale provider of lots to third-party builders and also provide expansion potential for the Brookfield Residential homebuilding brand,” said Adrian Foley, Managing Partner, Real Estate and President, Development of the Costa Mesa, Calif.-based firm. “The acquisition of Newland adds phenomenal master-planned communities to our portfolio in exciting new markets that are experiencing tremendous growth and a lack of supply of new homes. It will round out our existing development capabilities making us one of the few companies that has the breadth of resources, capital and operational talent to successfully scale in this area of the market.”
Newland is an established U.S. real estate land development company with five decades of experience in developing, designing and marketing master planned communities and selling property to home builders.
“We are extremely pleased to be able to team up with Brookfield Properties’ development group,” said Bob McLeod, executive chairman of Newland. “This acquisition will provide more opportunities for the continued development of additional mixed-use masterplans well into the future as well as give us significant additional vertical development opportunities.”
The acquisition is expected to close on June 1.
The deal comes as the nation’s home building industry is operating at a fever pitch.
U.S. housing starts—the number of new residential construction projects—jumped nearly 20% month over month in March to the highest level since 2006, a sign that homebuilders are growing more bullish despite lumber shortages and elevated construction costs. Meanwhile, listings of existing homes fell.
“New construction has typically been a good option for buyers who don’t want to deal with bidding wars because builders don’t usually set deadlines for offers. Buyers also like that they can often buy a new home for what it’s actually listed for rather than having to offer way over the asking price to win,” said Redfin Houston real estate agent Melanie Miller. “However, inventory for new construction is very low and prices are now rising for many new and pre-construction homes because lumber prices have gone up. I had one buyer who came to terms with a builder at a certain price. The builder called us the next day and said they can’t do that price anymore because their suppliers just increased prices.”
In Houston, single family home sales were up 24.4 percent in March over March 2020. And newly built homes now control over a 30 percent share because existing home inventories are so thin.
Land brokers report strong activity as residential developers seek suburban parcels for new subdivisions.
May 6, 2021 Realty News Report Copyright 2021
Graphic:: Brookfield Residential Properties
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
File: Brookfield Residential Acquiring Newland