COACHELLA VALLEY BROKER The Hoffman CA DRE #01475105 … · 2015-06-11 · The Verano new-home...
1
COACHELLA VALLEY BROKER Erik Christianson CA DRE #01475105 T 949.705.0920 | C 949.910.7337 echristianson@hoffmanland.com Coachella Valley land sales reversing the slide Builders buying up properes leſt undeveloped since market crash POSTED MARCH 10, 2013 Land broker Erik Christianson remembers land values tumbling 70 percent six years ago in many areas of the Coachella Valley as the housing market tanked. At one point, he counted 90 stalled or failed residential developments across the valley. As sales dwindled, home-builders lost equity in their properties, banks foreclosed and, for several years, land deals virtually dried up for Christianson and other longtime valley land brokers. “In most cases, banks were lucky to get 20 or 30 percent of their loan bases back,” said Christianson, who has focused on valley land deals for eight years with Irvine-based The Hoffman Company. As the housing market slowly rebounds, so have land sales. Investors who scarfed up desert prop- erties several years ago that had finished lots — in which streets, curbs, gutters and sidewalks were completed — have been selling again to once-again optimistic builders. Valley residents driving past long-inactive new-home developments may have noticed a “green cover” that sits atop graded residential lots and is designed to prevent erosion until builders can again break ground. Those green lot seals are giving way to foundations as builders such as Alta Verde Group, Far West Industries, Rilington Group and Tahiti Partners pur- chase properties and bring dormant developments to life. Long-stagnant land prices have begun to increase. Prices for finished residential lots have jumped 24 percent to 41 percent year-over-year in cities across the valley, according to a first quarter 2013 analysis by The Hoffman Company. In Palm Desert, for instance, the price for a 7,200-square-foot finished lot jumped nearly 30 percent to $115,000. Kathleen Rust, a vice president with NAI Capi- tal in Palm Desert, said she actually closes most of the land deals that go into escrow be- cause builders and other buyers are more confident. Dick Baxley, president of Baxley Properties in Palm Desert, said the market is still very price- sensitive, but “the action in land sales has picked up significantly,” with the focus being mostly on finished land. “I’ve seen very little raw land play although there are opportunity buyers on some fairly significant portions of land where there is a distressed seller,” Baxley said. Land brokers say, behind the scenes, ownership of residential lots has often changed hands several times amid the housing downturn. Banks such as OneWest, US Bank, MB Financial Bank — to name just a few — that repossessed finished lots have sold to investors who are finally able to sell to builders and see a return on their investments. In some cases, the Federal Deposit Insurance Corporation stepped in and sold the land, or builders such as DR Horton and Ponderosa Homes sold to investment groups. The Verano new-home development in Cathedral City is one example. The FDIC sold off 137 improved lots to their investors in June 2010, and both US Bank and a builder sold portions of the development last year as well. Portions of the Verano home development in Cathedral City, for instance, have been sold to investment groups by U.S. Bank and a builder. Christianson helped broker the Verano deals, and they are just a few of 25 land transactions he has been involved with over the past four years. He has about 10 deals in the works now. ‘Boutique enclaves’ Developers that are buying up properties are working to serve niche markets, often creating smaller “boutique enclaves” suited to particular buyers. Developer Unity Pacific Residential purchased finished land at the gat- ed Madison Estates new-home community with Tuscan, Spanish Colo- nial and Mission style estate homes near Madison Street and Avenue 49 in Indio. Five homes under construction ranging from 4,000 to 5,100 square feet start at $674,900. The FDIC sold 46 finished lots and nine homes at Madison Estates to investors in June 2010, and late last year the builder bought a portion of that land, Christianson said. Some builders are entering into partnerships on lease land rather than purchasing properties, thus potentially cutting the high-dollar risk. “I’m seeing more joint ventures put together, such as tribes with lease land, looking for and finding builders,” Rust said. “It’s an opportunity for the private builders that were sort of shut out.” Geoffrey Payne, CEO of Tahiti Partners Properties, which is completing midcentury modern homes at the Oceo development in Palm Springs, said he and other builders have focused on choice locations where lots have been finished and many of the environmental, permitting and other fees have already been paid. Builders say they must be price-conscious about land purchases considering the building, school and other fees can cost $40,000-$75,000 per home, depending on the city and neighborhood. Christianson worked to broker a land deal with Scott Lissoy of Far West Industries when the Santa Ana-based developer decided in 2011 to buy 15 fin- ished lots for the upscale Estancias development in Palm Springs. Christianson estimated that as much as 75 percent of the distressed properties with finished lots has been sold in the valley, and some properties are now seeing multiple offers. “It’s hard to find the good deals right now,” Christianson said. “If it makes sense, the builders are willing to pay.” Some larger, national builders have been scoping out larger tracts for active adult communities where newly built homes still are among the best sellers. Those tracts are large enough to eventually build 700, even 2,000 houses, Christianson said. Baxley is seeing more properties under contract, waiting to close. He’s far more optimistic that those deals will go through. “The ability to close deals again — it’s just a joy,” Baxley said. Media Contacts: Anton Communications Genevieve Anton 714-544-6503 8 Visit The Hoffman Company website to view our Coachella Valley Listings: http://www.hoffmanland.com/listing-center.asp?a=filter&filterBy=CoachellaValley THE HOFFMAN COMPANY | 18881 Von Karman Avenue, Suite 150 • Irvine, CA 92612 | T 949.553.2020 | F 949.553.8449 | CA DRE #01473762 | www.hoffmanland.com Wrien by Mike Perrault | The Desert Sun The Hoffman Company senior land broker Erik Christianson talks about land at the Madison Estates community in Indio last week. Christianson himself has brokered the sale of the land twice in recent years. / Crystal Chatham/The Desert Sun The Hoffman Company 3 5 years leading the land brokerage industry CALIFORNIA + NEVADA
Transcript of COACHELLA VALLEY BROKER The Hoffman CA DRE #01475105 … · 2015-06-11 · The Verano new-home...
COACHELLA VALLEY BROKERErik Christianson
CA DRE #01475105T 949.705.0920 | C 949.910.7337
Coachella Valley land sales reversing the slideBuilders buying up properties left undeveloped since market crash
POSTED MARCH 10, 2013
Land broker Erik Christianson remembers land values tumbling 70 percent six years ago in many areas of the Coachella Valley as the housing market tanked. At one point, he counted 90 stalled or failed residential developments across the valley.
As sales dwindled, home-builders lost equity in their properties, banks foreclosed and, for several years, land deals virtually dried up for Christianson and other longtime valley land brokers.
“In most cases, banks were lucky to get 20 or 30 percent of their loan bases back,” said Christianson, who has focused on valley land deals for eight years with Irvine-based The Hoffman Company.
As the housing market slowly rebounds, so have land sales. Investors who scarfed up desert prop-erties several years ago that had finished lots — in which streets, curbs, gutters and sidewalks were completed — have been selling again to once-again optimistic builders.
Valley residents driving past long-inactive new-home developments may have noticed a “green cover” that sits atop graded residential lots and is designed to prevent erosion until builders can again break ground.
Those green lot seals are giving way to foundations as builders such as Alta Verde Group, Far West Industries, Rilington Group and Tahiti Partners pur-chase properties and bring dormant developments to life.
Long-stagnant land prices have begun to increase. Prices for finished residential lots have jumped 24 percent to 41 percent year-over-year in cities across the valley, according to a first quarter 2013 analysis by The Hoffman Company. In Palm Desert, for instance, the price for a 7,200-square-foot finished lot jumped nearly 30 percent to $115,000.
Kathleen Rust, a vice president with NAI Capi-tal in Palm Desert, said she actually closes most of the land deals that go into escrow be-cause builders and other buyers are more confident.
Dick Baxley, president of Baxley Properties in Palm Desert, said the market is still very price-sensitive, but “the action in land sales has picked up significantly,” with the focus being mostly on finished land.
“I’ve seen very little raw land play although there are opportunity buyers on some fairly significant portions of land where there is a distressed seller,” Baxley said.
Land brokers say, behind the scenes, ownership of residential lots has often changed hands several times amid the housing downturn.
Banks such as OneWest, US Bank, MB Financial Bank — to name just a few — that repossessed finished lots have sold to investors who are finally able to sell to builders and see a return on their investments.
In some cases, the Federal Deposit Insurance Corporation stepped in and sold the land, or builders such as DR Horton and Ponderosa Homes sold to investment groups.
The Verano new-home development in Cathedral City is one example. The FDIC sold off 137 improved lots to their investors in June 2010, and both US Bank and a builder sold portions of the development last year as well.
Portions of the Verano home development in Cathedral City, for instance, have been sold to investment groups by U.S. Bank and a builder.
Christianson helped broker the Verano deals, and they are just a few of 25 land transactions he has been involved with over the past four years. He has about 10 deals in the works now.
‘Boutique enclaves’Developers that are buying up properties are working to serve niche markets, often creating smaller “boutique enclaves” suited to particular buyers.
Developer Unity Pacific Residential purchased finished land at the gat-ed Madison Estates new-home community with Tuscan, Spanish Colo-nial and Mission style estate homes near Madison Street and Avenue 49 in Indio. Five homes under construction ranging from 4,000 to 5,100 square feet start at $674,900.
The FDIC sold 46 finished lots and nine homes at Madison Estates to investors in June 2010, and late last year the builder bought a portion of that land, Christianson said.
Some builders are entering into partnerships on lease land rather than purchasing properties, thus potentially cutting the high-dollar risk.
“I’m seeing more joint ventures put together, such as tribes with lease land, looking for and finding builders,” Rust said. “It’s an opportunity for the private builders that were sort of shut out.”
Geoffrey Payne, CEO of Tahiti Partners Properties, which is completing midcentury modern homes at the Oceo development in Palm Springs, said he and other builders have focused on choice locations where lots have been finished and many of the environmental, permitting and other fees have already been paid.
Builders say they must be price-conscious about land purchases considering the building, school and other fees can cost $40,000-$75,000 per home, depending on the city and neighborhood.
Christianson worked to broker a land deal with Scott Lissoy of Far West Industries when the Santa Ana-based developer decided in 2011 to buy 15 fin-ished lots for the upscale Estancias development in Palm Springs.
Christianson estimated that as much as 75 percent of the distressed properties with finished lots has been sold in the valley, and some properties are now seeing multiple offers.
“It’s hard to find the good deals right now,” Christianson said.“If it makes sense, the builders are willing to pay.”
Some larger, national builders have been scoping out larger tracts for active adult communities where newly built homes still are among the best sellers. Those tracts are large enough to eventually build 700, even 2,000 houses, Christianson said.
Baxley is seeing more properties under contract, waiting to close. He’s far more optimistic that those deals will go through.
“The ability to close deals again — it’s just a joy,” Baxley said.
Media Contacts: Anton CommunicationsGenevieve Anton 714-544-6503
8 Visit The Hoffman Company website to view our Coachella Valley Listings:http://www.hoffmanland.com/listing-center.asp?a=filter&filterBy=CoachellaValley
THE HOFFMAN COMPANY | 18881 Von Karman Avenue, Suite 150 • Irvine, CA 92612 | T 949.553.2020 | F 949.553.8449 | CA DRE #01473762 | www.hoffmanland.com
Written by Mike Perrault | The Desert Sun
The Hoffman Company senior land broker Erik Christianson talks about land at the Madison Estates community in Indio last week. Christianson himself has brokered the sale of the land twice in recent years. / Crystal Chatham/The Desert Sun
The
Hoffman
Company
35years leading the land brokerage industryC A L I F O R N I A + N E V A D A
