MREC Acquires Forest City’s Land Portfolio
CHARLOTTE, N.C. – Nov. 5, 2012 – Charlotte-based Mountain Real Estate Capital, LLC (Mountain) announces the acquisition of a significant portion of remaining land portfolio assets from Forest City Land Group. This includes master planned communities across the country totaling approximately 1,200 residential lots. The projects include a mix of finished lots, partially finished lots and undeveloped land for residential and commercial development. The terms of the transaction were not disclosed.
Rodney Montag, senior director in Mountain’s New York office, completed the investment. Montag states, “This portfolio continues our interest in investing in land and communities for residential development in major growth regions nationally. It was a challenging portfolio with many moving parts and we spent significant time and money in order to figure it out. Ultimately, it provides a perfect mix of finished lots, which provide liquidity, and undeveloped lots for upside appreciation.”
The larger projects include Woodbury Crossing in Olympia, WA, Tangerine Crossing in Tucson, AZ, Legacy Lakes in Pinehurst, NC, and Summers Walk in Charlotte, NC. All of the communities are well-positioned projects within their submarkets and have remained active throughout the downturn. Mountain will partner with Raleigh-based LStar Management Group to develop out the North Carolina projects, which will bring the number of projects co-developed by this Mountain/LStar partnership to seven.
“There was strong interest in this prime portfolio,” explains Michael Daly, Forest City’s executive vice president. “Mountain’s proposal was very responsive. Their national footprint and strong capital position allowed them to move quickly in a variety of markets. It was also very important for us to work with a group that has the operational experience to understand the complexity of owning, developing and managing long term land assets.”
Mountain anticipates a seven-year investment horizon in which it will sell lots to some of the nation’s leading homebuilders including Richmond American, Lennar, Ryan, DR Horton, Maracay and other regional and custom builders. Total finished lot values are estimated to be in excess of $65 million.
Mountain Real Estate Capital is the equity investment arm of the Mountain Real Estate Group. The investment entity is focused on three types of investments:
- Portfolios of residential communities, acquired either in bulk NPL/REO portfolios directly from banks, or through the recapitalization of builders’ land portfolios or entities
- Recapitalizations for real estate operators to capitalize on discounted payments to banks or investor buyouts; and opportunities to acquire new projects
- Partnerships with best-in-class developers and builders to develop/build stalled subdivisions in primary and secondary markets across the country
“While we have focused on portfolios similar to the Forest City opportunity, we have also recapitalized best-in-class developers and builders to restructure their projects and businesses,” states Peter Fioretti, Mountain’s CEO. “We recently helped a regional homebuilder purchase back a portfolio of projects from its bank and are currently pursuing similar restructures in Denver and Houston.”