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5/31/12
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In residential development news out of Colorado, Mountain Real Estate Capital (MREC) and Oakwood Homes of Denver have acquired and plan to build out Banning Lewis Ranch, a 2,600-acre, 8,500-approved-lot master-planned community located in Colorado Springs. The transaction represents MREC’s second investment in Colorado and first with Oakwood. The terms of the transaction were not disclosed.
The site was owned by a bank consortium after the previous owners declared bankruptcy in October 2010. The investment closed in 45 days from signing of contract with no material changes to terms or closing date. The diligence period required the team to address a host of legacy issues hindering the community including: waste water obligations, metro district bonds, redesigning future village land plans, and working with the city to understand the various excessive development obligations and fees that were detrimental to the homebuilders.
The partnership anticipates a five- to eight-year investment horizon in which it will sell lots and participate in homebuilding with five of the largest builders in Colorado Springs including: Classic Homes, Oakwood Homes, Richmond American, DR Horton, and Vantage Homes. Total lot proceeds over the next 10 years from Villages 1-3 sales are expected to exceed $120 mil.
Eric Bialke and Joel Kaul of MREC completed the investment for the company. Charlotte, NC-based MREC recently partnered with Classic Homes, the largest homebuilder in Colorado Springs, in September 2010 to develop Promontory Point in nearby Monument, CO. The 267-lot community has had 40 home sales since opening with an expected sell out in late 2015.
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