Los Angeles-based KB Home announced it had acquired Chicago-based Zale Homes for $33 million, including the assumption of debt. Last year, privately held Zale delivered 302 homes for approximately $106 million. KB Home closed 21,778 homes in the United States in 2002, for gross revenues of a little more than $5 million.
KB Home has focused until now mostly in the Sunbelt region, as well as Colorado, Georgia, and North Carolina. It also closed 3,787 homes in France last year. So why the Windy City? CEO Bruce Karatz noted that, "Chicago is the largest new-home market outside the Sunbelt, with single-family permits exceeding 25,000 for each of the past five years and reaching 30,410 in 2002."
This summer, the temperature was not the only thing sizzling. Sales of new single-family homes in June, when mortgage rates were at their lowest level in four decades, reached a record seasonally adjusted rate of 1.20 million units, according to the Commerce Department. July came almost as close, at a 1.165 million unit pace, putting 2003 on track to break the 1 million new home sales mark, said NAHB chief economist David Seiders. New-home prices averaged 9 percent higher than last year. July unit sales grew fastest in the Midwest, up 17 percent; increased just 1 percent in the South; fell 16 percent in the West; and dropped 21 percent in the Northeast.
The Trammell Crow Co. has found YIMBY activists -- people who say, "Yes, in my backyard!" -- in Washington, D.C. The West End neighborhood in the nation's capital is within walking distance of the famous Watergate Hotel and fancy Georgetown townhouses. But the neighborhood itself feels like the hole in a doughnut. When residents heard that a Historic Preservation Review Board was demanding changes in the conversion of a hospital to a 225-unit condominium, they sided with the developer. When residents learned that Trammell Crow was negotiating with gourmet food chain Trader Joe's to open a store, the grocer received 140 letters asking it to move in.
In San Diego, CityMark Development has added a new accessory to M2i, its new residential neighborhood: a chance to borrow a car by the hour or by the day for a minimal charge. The program may save residents $600 a month or more than $7,000 a year. With M2i's lofts priced from the $200,000s to the $600,000s, residents might appreciate the savings. Move-ins are slated for mid-2005.
The car-sharing program is a partnership with Seattle-based FlexCar. Units in the seven-story residential development that will span a city block will come with a fully insured and licensed Honda Civic or similar vehicle, designated exclusively for M2i resident use. The car is stored in the building's parking garage, with fuel available via a universal card accepted at nearly any gas station.
Hearthstone, one of the country's largest institutional investors of residential developments, said it has committed $300 million for new housing in south Florida in recent months and that its commitments in Texas reached $525 million over the past year. It also announced an $11 million investment to build 1,400 homes near Phoenix.
In Florida, $21 million will be invested in two, single-family home developments. In the first, 212 homes on nearly 60 acres of land in Fort Myers, just north of Naples, will average 1,550 to 2,300 square feet and be priced from the low- to mid-$200,000s. The second, a $9 million investment in West Palm Beach, will consist of luxury "old world" homes on 19 lots averaging 12,500 square feet, with prices averaging $400,000. Home prices will range from the $800,000s to the mid-$2 millions.
In Texas, Hearthstone will invest $28.5 million to build more than 200 homes on 47 acres in the city of Cibelo, northeast of San Antonio; $7.1 million to Legacy Homes, a division of Dallas- and Scottsdale-based Meritage Corp., to develop nearly 250 finished lots on Golden Triangle Blvd., northeast of Fort Worth. Working with Meritage, it will also invest $5.4 million to develop nearly 200 finished lots in Wylie, northeast of Dallas. Hearthstone said it has committed $524.5 million to the Texas home building industry since 2002.
Cindy Gilmore, corporate vice president and chief of Hearthstone's central and eastern U.S. operations, said that she anticipated investing more than $1 billion in single-family homes in Texas in the next decade.
In Arizona, Hearthstone pledged $11.4 million for 320 acres in Laveen, 11 miles southwest of Phoenix, for the construction of 1,400 homes. The investment consists entirely of raw land parcels to be sold in bulk to third-party home builders, with a single lot parcel to develop a community park for the city of Phoenix.
Just as the lights went out in New York, and discussions centered on weaknesses in our national power grid, GreenWood Ranch Estates, a 487-home community near Kingman, Ariz., announced that it is grid-independent. The neighborhood claims to be the first and only solar- and propane-powered subdivision in the country. Propane will be used for heat and hot water. Lights, refrigerators, and computers, among other devices, will use solar power. The $99,900 modular homes will come with basic solar equipment, which PerfectPower Inc. president John Balfour says is sufficient for a seasonal home. The Arizona Republic reports that year-round residents should install additional solar devices.
Beazer Homes USA, which has an active presence in central Florida, has acquired 80 additional acres in the Holden area of Orlando, and plans up to 190 home sites. David Byrnes, division president, said the home builder hopes to start development in the second quarter of 2004. Homes in the new community, soon to be named, will be priced from $185,000 to $400,000.