Standard Pacific Homes may not yet wield the clout of a Top 5 home builder, but that doesn't stop the Irvine, Calif.-based company from throwing its weight around like one: In 2005, the builder eclipsed the benchmarks of $4 billion in sales and 10,000 in units. In addition, as the year drew to a close, the builder upped its ante in the Las Vegas region dramatically.
On Nov. 16, Stan Pac execs went head to head with some of the Goliaths in the business in a public auction held in Las Vegas by the federal Bureau of Land Management (BLM). Up for sale were 3,002 acres of public land. The consortium of Stan Pac, developer Olympia Group, and fellow builders American West Homes, Astoria Homes, and D.R. Horton had their eyes on two parcels of land that added up to 2,675 acres in North Las Vegas. But they faced stiff competition from Focus Property Group and its consortium of builders, which was composed of KB Home, Lennar, Meritage Homes, Ryland, and Woodside Homes.
The minimum bid for the 2,675 acres stood at $522.4 million. As each second that ticked by raised the price tag by tens of millions of dollars, the two groups duked it out. Within a few minutes, Olympia Group and its consortium offered the winning bid, shelling out $639 million—$238,000 an acre—for the prized parcel.
Garry Goett, president and CEO of Olympia Group, was pleased with the results. For him, it's all business as usual. “I approach the auction like a business transaction,” he says.
BREAKING IT DOWN The acquisition represents a big energy boost for Stan Pac. The builder entered the fierce Las Vegas market last May as a start-up division, headed by Gary Cavender, who came over to Standard Pacific last spring from privately owned Signature Homes. Stan Pac is still a freshman player in Sin City, but the builder already had acquired about 180 acres in Henderson and North Las Vegas—about 1,000 lots—before the auction. Standard Pacific plans to open its first community in North Las Vegas, Mountain Shadows, this month.
Cavender is ecstatic over the winning bid. “I feel elated,” he says. “It will set the foundation for the next three to five years.” Details of the builder's plans for the land are still being determined, but the goal is to become a Top 10 builder in Las Vegas within five years, which would mean unit sales of 1,000 or more homes annually.
Because of the market's dwindling land supply, Cavender views federal land auctions as a virtual sure bet. In fact, the federal government owns most of the remaining vacant land in the Las Vegas market, he says.
Learn more about markets featured in this article: Las Vegas, NV.