I was reading up on industry news today, when I came across an article that stopped me in my tracks. Apparently, NVR, Inc. formed a joint venture with Morgan Stanley Real Estate Investing and Texas developer CoastOak Group to acquire a land portfolio of over 5,600 homesites in nine different communities in the DC area. The article quoted Stephen East at Ticonderoga Securities as saying that “he believed the joint venture paid approximately $83.5 million, with the majority of the lots in Loudoun County.” The Wall Street Journal, however, pegs the transaction at closer to $180 million.
Yes, take a second look at that number…that’s thousands of homesites. Morgan Stanley hasn’t completed a land purchase this big since 2007. And given that NVR typically doesn’t hold land, but utilizes land options on lots (that they exercise as they sell individual homesites) this is a huge play for them in this market. NVR apparently already held options on most of the portfolio. NVR sells homes under the Ryan Homes, NVHomes, Rymarc Homes and Fox Ridge Homes brands.
The statistics here in Loudoun have shown for some time that the market is coming back, and builders started jumping back in the market to meet buyer demand when there weren’t enough resale homes available. This purchase shows a tremendous amount of confidence in our local housing market.
Morgan Stanley issued a press release about this last Tuesday, and the Wall Street Journal is reporting that they picked up land owned by Greenvest. I’m not sure if they have their facts quite right on that, since Greenvest lost their Dulles South corridor holdings in a foreclosure sale in 2009. Communities there include Greenfields, Lena, Broad Run Village and Arcola. Perhaps they were still holding other communities, and that is what was sold to this new joint venture?
Based on what the cost of the transaction is estimated at, it looks like it’s mostly raw land that was purchased. I’m hoping that more information is forthcoming about exactly where these lots are, and when we can expect to see roads and homes there. I’ll keep you posted as I learn more.