Lakewood Ranch Company Spurs Development with Land Sales

Starwood Land Ventures, a Lakewood Ranch firm formed three years ago to acquire distressed real estate, has scored one of the largest land purchases in Florida in the past year.

Starwood Land officials say the company’s $81 million acquisition of nearly 5,500 lots from the bankrupt Tousa Homes Inc. will allow it to re-energize communities from Jacksonville to Miami and generate sales to builders.

“This is really the culmination of Starwood Land’s efforts in regards to searching and bidding on residential assets,” said Mike Moser, the local company’s east regional president.

As part of the acquisition, Miami-based Lennar Corp. has committed to buy 1,400 of the Starwood lots, and has options to buy another 1,350.

Analysts said Starwood Land’s deal could also send ripples throughout Florida’s housing market, and spur activity because of its scope and size.

“Look at it this way: A typical residential subdivision is 150 to 200 lots,” said Jack McCabe, chief executive of McCabe Research & Consulting, of Deerfield Beach. “A purchase of 5,500 lots, at one time, is massive.”

The acquisition also signals that, for hedge funds and well-capitalized home builders, at least, Florida’s four-year housing depression may be ebbing.

“When you see a national company making an $80 million commitment of capital, betting that the market is headed up, it’s a positive sign,” said Pat Neal, president of Neal Communities, a developer and home builder also based in Lakewood Ranch.

“This is a sign that for builders, the market has definitely hit bottom,” Neal said. “Now, they’re mostly out there looking for lots to build on.”

The Starwood lots are in 36 communities statewide, including in Tampa and Orlando. Of the nearly 5,500 home sites, all but 900 are “finished,” meaning they have necessary infrastructure such as lighting and sewer and water hookups.

The lots will allow builders to develop homes with roughly 13,000 residents — comparable in size to the city of Sebring in Highlands County or half again as large as the population of Anna Maria Island.

Neal and others noted that Starwood’s price will allow it to sell lots at a reasonably low price to builders, who in turn can develop and sell moderately priced homes — undercutting competition in many areas.

“Today, everything is about price and cost,” Neal said. “At roughly $14,000 per lot, Starwood Land and its partners will be able to build more inexpensive homes for customers.”

Lennar said in a statement it intends to construct single-family homes, townhomes and garden villas “priced from the low $100,000s.”

“We are pleased to work with Starwood on this transaction and we view this deal as a major step forward for Lennar’s growth in the state of Florida,” said Fred Rothman, Lennar’s regional president, in a statement.

Starwood Land acquired the Tousa portfolio through an auction held late last month by the U.S. Bankruptcy Court Southern Florida district, in Fort Lauderdale.

Starwood Land finalized the purchase with the court on Feb. 17, Moser said.

Tousa filed for bankruptcy in January 2008.

In addition to Starwood Land, a partnership of hedge funds Paulson & Co. and Greenpoint Advisors and a team composed of Metro Development Group II and Dune Real Estate Partners also bid on the Tousa lot portfolio.

Both Starwood Land and Lennar characterized the lots as “one of the most desirable real estate portfolios to come to market in years.”

The deal brings to $160 million the total amount Starwood Land has invested in property, Moser said. Of that, $100 million has been invested in the past 90 days. “We’re starting to see some loosening,” Moser said.

In all, the company now owns 13,100 home sites in Florida, Arizona and California.

Starwood Land is an affiliate of Starwood Capital Group, a Connecticut-based company that has roughly $13 billion in assets under management. It controls the Westin hotel chain, lender iStar Financial and links operator Troon Golf.

“They’re taking advantage of a great deal,” McCabe said. “Because Florida’s future long-term is excellent.”