HOUSTON – (Realty News Report) – Castlelake LP has placed a portfolio of 2,300 home building lots up for sale in master planned communities across Austin, Dallas, Nashville and Houston, including The Groves, a 993-acre community in northeast Houston.
The properties are being marketed by CBRE. The portfolio consists of 2,300 remaining single-family, detached lots and excess land for potential development located within five fully-entitled and well-established residential master planned communities. Over $250 million of total infrastructure investment has been completed across the communities to date with nearly 3,700 closed lot/home sales to date.
Lot Shortage for Builders
Home building has been exceptionally strong in many markets this year as low mortgage rates around 3 percent have attracted buyers, including the massive Millennial generation – a cohort that finally became eager to purchase houses.
Recently many home builders have reported lot shortages as land developers have been unable to match demand for home sites.
“This is an excellent opportunity to acquire a critical mass of highly desirable residential lot inventory along with excess land for commercial development. The lots are within proven master planned communities located across the highly sought-after growth markets of Austin, Dallas, Houston and Nashville,” said Jack Howard, Executive Vice President of CBRE’s National Portfolio Sales Advisors.
The Groves in NE Houston is For Sale
In 2017, Charlotte-based Crescent Communities sold its interests in The Groves to Castlelake LP, a Minnesota-based firm.
Located in the northeast Houston suburb of Humble near Lake Houston, The Groves opened in 2015 with an initial builder roster including David Weekley Homes, Trendmaker Homes, Taylor Morrison and other major builders. The wooded project, just under 1,000 acres, is located off of West Lake Houston Parkway – not far from Atascocita and Summerwood.
Patrick Arangio, Jack Howard, Chris McClain, Kurt Altvater of the CBRE Capital Markets National Portfolio Sale Advisors team and Steve Lehr of CBRE’s Land Services team have been retained to act as the exclusive advisors for the Castlelake sale.
“There is over $120 million of anticipated receivables expected for near term reimbursement that will inure to a buyer at closing, adding an additional dependable revenue stream to prospective buyers,” said Patrick Arangio, CBRE’s Vice Chairman of National Portfolio Sales Advisors.
Approximately 81 percent of the total remaining inventory is currently under contract with non-refundable deposits securing the purchase options from an established roster of regional and national home builders, including Toll Brothers, Pulte, Beazer Homes, Highland Homes and Lennar, among others. Collectively, these builders have acquired in excess of 3,600 residential lots within the communities to date, with more than 1,850 additional lots under contract.
Investors may also have the opportunity to partner or joint venture with two existing specialized operating partners, both of which have successfully executed on the existing business plans.
“Both partners have expressed a strong interest to stay on and provide a ‘plug and play’ option to work with new capital to help facilitate a smooth transition and business plan completion. An investor may also benefit from the operating partners’ existing relationships within the respective municipalities,” Arangio added.
The demand for home building lots has sparked a lot of activity around the country.
Brookfield Buying Newland in Pursuit of Lots
In May, Brookfield Residential 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, including the 8,100-acre Cinco Ranch in the Katy area on the west side of Houston.
Also included in Newland’s properties is the 3,642–acre community called Elyson in the Katy Independent School District. Acquiring Newland will give Brookfield Residential entry into nine cities and add additional strength in five other cities.
June 28, 2021 Realty News Report Copyright 2021.
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File: CBRE. Portfolio of 2300 Lots For Sale by Castlelake
Photo: Martin Fein project near The Groves