HOUSTON – (Realty News Report) – Castlelake LP has listed a portfolio of 2,300 homebuilding lots for sale within master-planned communities across Austin, Dallas, Nashville and Houston, including The Groves, a 993-acre community in northeast Houston.
CBRE is marketing the offering. The portfolio includes 2,300 remaining single-family detached lots and additional excess land for potential development in five fully entitled, well-established master-planned residential communities. More than $250 million has been invested in infrastructure across these communities to date, and nearly 3,700 lot/home closings have been completed.
Lot Shortage for Builders
Homebuilding activity has been particularly strong in many markets, driven in part by historically low mortgage rates that attracted buyers, including a large contingent of Millennials who have entered the market in recent years.
Many homebuilders have reported shortages of finished lots as land developers struggle to keep pace with demand for buildable 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 investment firm.
Located in the northeast Houston suburb of Humble near Lake Houston, The Groves opened in 2015 with an initial builder roster that included David Weekley Homes, Trendmaker Homes and Taylor Morrison among other major builders. The wooded community, just under 1,000 acres, sits off West Lake Houston Parkway and is close to Atascocita and Summerwood.
Patrick Arangio, Jack Howard, Chris McClain and Kurt Altvater of CBRE’s Capital Markets National Portfolio Sale Advisors team, together with Steve Lehr of CBRE’s Land Services group, have been retained as 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 remaining inventory is currently under contract with non-refundable deposits securing purchase options from an established roster of regional and national homebuilders, including Toll Brothers, Pulte, Beazer Homes, Highland Homes and Lennar. Collectively, these builders have already acquired more than 3,600 residential lots across the communities, with over 1,850 additional lots currently under contract.
Investors may also have the opportunity to partner or joint venture with two existing specialized operating partners who have successfully executed the current 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 surge in demand for homebuilding lots has spurred activity across the country as developers and institutional buyers pursue finished lots and entitled land.
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’s portfolio includes some of Houston’s largest master-planned communities, such as the 8,100-acre Cinco Ranch in the Katy area.
Also in Newland’s holdings is Elyson, a 3,642-acre community in the Katy Independent School District. The acquisition will give Brookfield Residential entry into nine cities and bolster its presence in several key markets.
June 28, 2021 Realty News Report. Copyright 2021.
For more about Texas real estate, see the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins.
File: CBRE. Portfolio of 2,300 Lots For Sale by Castlelake
Photo: Martin Fein project near The Groves