HOUSTON – (Realty News Report) – Brookfield Residential has agreed to acquire Newland, one of the nation’s largest master-planned community developers.
Newland is the developer behind some of Houston’s largest master-planned communities, including the 8,100-acre Cinco Ranch in the Katy area on Houston’s west side.
Among Newland’s properties is the newer 3,642-acre community Elyson, located in the Katy Independent School District. Once complete, Elyson will contain approximately 6,000 homes. Elyson ranked seventh in new single-family home starts in the Houston area in 2020, with 453 starts, according to Zonda.
Newland also developed the 2,000-acre Telfair community in the Sugar Land area.
By acquiring Newland, Brookfield Residential will gain entry into nine new metropolitan markets and strengthen its presence in five additional cities. Alongside the management company acquisition, Brookfield Residential is purchasing the 5% General Partner equity interest in 15 of the 20 master-planned communities that Newland is currently developing.
This strategic acquisition substantially expands Brookfield Residential’s geographic footprint and complements its existing platform of master-planned communities. It also enables Brookfield Properties to deploy its development capabilities across key growth regions. The combined company will add new markets including Dallas–Fort Worth, Houston, Atlanta, Tampa, Seattle–Tacoma, Portland, Raleigh–Durham, Wilmington, and Charleston. It will also broaden offerings where both firms already operate, such as San Diego, Denver, Austin, Phoenix, and the Washington, D.C. area.
“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 to expand potential for the Brookfield Residential homebuilding brand,” said Adrian Foley, Managing Partner, Real Estate and President, Development of the Costa Mesa, California–based firm. “The acquisition of Newland adds outstanding master-planned communities to our portfolio in high-growth markets that face a shortage of new housing. It enhances our development capabilities and positions us among the few companies with the resources, capital, and operational talent to scale successfully in this part of the market.”
Newland is an established U.S. land development company with five decades of experience in designing, developing, marketing master-planned communities, and selling property to home builders.
“We are extremely pleased to team up with Brookfield Properties’ development group,” said Bob McLeod, executive chairman of Newland. “This acquisition will create more opportunities for continued development of mixed-use master plans and provide significant additional vertical development possibilities.”
The acquisition is expected to close on June 1.
The deal comes as the national homebuilding industry is operating at a rapid pace.
U.S. housing starts—the number of new residential construction projects—rose nearly 20% month over month in March to the highest level since 2006, a sign that homebuilders are increasingly optimistic despite lumber shortages and higher construction costs. At the same time, listings of existing homes declined.
“New construction has typically been a good option for buyers who want to avoid bidding wars because builders don’t usually set strict deadlines for offers. Buyers also often appreciate that they can purchase a new home at the listed price rather than having to bid well above asking,” said Redfin Houston real estate agent Melanie Miller. “However, inventory for new construction is very low and prices for many new and pre-construction homes are rising because lumber costs have increased. I had one buyer who reached terms with a builder at a certain price, only to be told the next day that the builder could no longer honor that price due to supplier increases.”
In Houston, single-family home sales were up 24.4 percent in March compared with March 2020. Newly built homes now represent more than 30 percent of the market share as existing-home inventories remain 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 readers interested in Texas real estate, the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins examines the region’s growth and market dynamics.
File: Brookfield Residential Acquiring Newland