Houston-based McGuyer Homebuilders, aka MHI, notched the third in a recent series of private home builder-private equity joint ventures aimed at gaining control of homesite assets, this one clocking in at $50 million.
On the heels of last month's agreement between LGI and GoldenTree InSite Partners to venture on a lot acquisition initiative and David Weekley Homes' similar $25 million land venture fund with Midway Cos., MHI is teaming up with Wheelock Street Capital and has closed on an initial $15 million purchase of 3,000 homesites in the Austin, Dallas, and Houston markets.
Per an MHI press announcement, "The diversified portfolio will include product for buyers ranging from first-time buyers to second-time move-up buyers. MHI will manage the land development responsibilities. Both firms will work to market the homesites for sale to home builders."
Frank McGuyer, CEO of MHI, is quoted in the press release, saying, "We are excited about the relationship with Wheelock. Their experienced team understands our business, and we've learned that we share similar acquisition and development philosophies. The formation of this venture will allow us to take advantage of some of the great opportunities we are seeing in our markets right now, leveraging our knowledge of the Texas markets with the capital backing of Wheelock."
Lacking access to conventional bank lines to reload on lots that have market-corrected prices, private home builders are turning to investment funds that have got some urgency to deploy capital sooner than later and that have begun to bet that the residential real estate market has bottomed.
This way, on a selective and more targeted basis, the remaining private builders with strong balance sheets and a visible track record of unit volume can position themselves to ramp up earlier in the recovery cycle and plan to grow faster.
Attempts to reach principals at MHI and Wheelock Street Capital by telephone were not answered as of our deadline.