Mountain Real Estate Capital and Varde sell Oakwood Homes to Clayton Properties Group
CHARLOTTE, NORTH CAROLINA.-July 10, 2017 – Mountain Real Estate Capital (MREC), along with its investor Varde Partners, have sold Oakwood Homes to Clayton Properties Group, a Berkshire Hathaway company. MREC and Oakwood enjoyed a very successful partnership spanning five years.
In May of 2012, MREC made its first investment with Oakwood to acquire and build out Banning Lewis Ranch, a 2,600-acre, 8,500-approved-lot master-planned community located in Colorado Springs, Colorado. Shortly thereafter, Pat Hamill (founder/owner) of Oakwood Homes, and MREC’s Peter Fioretti (founder/owner) and Joel Kaul (managing director), expanded their relationship to create a new partnership to recapitalize the Oakwood Homes entity.
MREC/Varde closed on the Oakwood recapitalization in early 2013 providing strategic equity capital to buyout Oakwood’s previous equity partner and accelerate Oakwood’s growth and expansion into new markets within Colorado and Utah. Oakwood has grown from 352 closings and $90 million in revenue in 2012, to over 1275 closings and $474 million in revenue in 2016 and achieved the #39 ranking in Builder Magazine’s Top 100 list. Oakwood currently owns and controls approximately 18,000 lots.
MREC’s excellent relationship with Pat Hamill and the Oakwood management team led to the original investment and also facilitated the sale of Oakwood to Clayton. “Pat was instrumental as Chairmen and CEO of the venture, directing strategy and providing leadership, vision and support as the company executed its expansion and growth plans,” said Peter Fioretti, Chairman and CEO of MREC. Both Peter Fioretti and Joel Kaul served on the Board of Directors Executive Committee for Oakwood.
Pat Hamill said, “Mountain made an investment in us during a very difficult time during our industry. We were one of the only large private regional builders to survive. The entire MREC team was instrumental in assisting us in securing new banking relationships that expanded our debt facilities with very favorable debt terms. Their disciplined land acquisition underwriting and creative structures also assisted us in making a strategic acquisition of a Utah homebuilder, obtain valuable land option contracts, acquire other master planned communities, expand into the active adult market and improve our operating margins that ultimately laid the foundation for the sale of the business. Most importantly, we were able to do this with alignment of our cultures and values of being entrepreneurial and operating with the highest standards of integrity and excellence while having fun during the process.”
Peter Fioretti added, “Oakwood has clearly developed a competitive edge in their marketplace and continues to reinvent themselves with superior product and market positions throughout the partnership. They have an impressive history of homebuilding innovation and practices a relentless commitment to quality and service for its customer base. Their self-sustaining operating model, company culture and core values align well with Clayton’s, which sets them up for continued success and a win for everyone involved.”
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About Mountain Real Estate Capital (MREC)
Since 1993, Mountain Real Estate Capital has been a leading private equity source for real estate land developers and builders. MREC is headquartered in Charlotte, N.C. with offices in Minneapolis and San Diego. Since 2010, MREC has committed approximately $1B to acquire over 50,000 single family lots and 9,000 acres of developable land in over 400 communities in 20 states with 25 operating partners. These projects have projected revenues in excess of $5 billion. Since 2016 MREC’s primary focus with its partners has been to deliver approved projects to homebuilders in strategic submarkets nationally. Sales have included entitled land, shovel-ready pods and developed lots to over half of the top 50 builders as compiled by Builder Magazine.