Lennar is moving back into the Atlanta market, and many of the other public builders who maintained sparse outposts there throughout the downturn are looking to grow their presence in the Southern hub city as well, hoping to secure the best land positions for the future.
"The nationals are really starting to crank it up," said Steve Palm, president of SmartNumbers, an Atlanta-based residential real estate information, analysis, and forecasting firm. "We are getting calls from everybody."
Why? "There are so many cheap lots available," Palm said. Banks are beginning to move lots and land they've been holding onto in the market, he added.Lennar has been waiting for the right time to move to the city that is home to nine Fortune 500 company headquarters. With the move, Georgia becomes the 17th state Lennar operates in.
"Atlanta is one of the largest cities in the Southeast and one of America's fastest growing cities," said Sam Sparks, president of Lennar's Southeast Region. "We have been interested in entering this market for some time. Our company has been able to capitalize on well-positioned land ideal for community development, and we believe this is the right time to establish a very strong brand presence in this market."
But the company has not said where the land positions are or whether they have bought or optioned the lots.
Lennar has already begun to put its personnel in place for the Atlanta operation. Todd Jones, a former Centex and Ryland division president, has been named president of Lennar's new Atlanta division.
David Weekley Homes, too, has an eye on land opportunities in Atlanta, said division president Jon Calbert. The Texas-based private builder has all but hibernated in Atlanta as the market tanked. Calbert said his workforce has thinned as the company has focused on moving some of its inventory and doing some fee-based work for banks rather than building its own homes.
"You need to secure some good land positions now," said Calbert. While sprawling Atlanta has plenty of land on its outskirts, much of that isn't considered buildable now. "There is definitely a line out there that is way past the demilitarized zone," he said. "We look out there now and say, 'What were we thinking'" at the peak of the market when builders were buying land in the hinterlands way past Atlanta's perimeter roads.
"I think the reality is that there are only a few A locations that are still out there, and that is probably what is driving the interest," Calbert added.
Unlike the large publicly traded builders, Weekley is looking for smaller niche land deals of maybe 50 lots versus the hundreds the publics are looking for.
"We are not as bullish as some of the public guys are," Calbert said.That said, there's no doubt that the market will eventually reap benefits for those who can crack the local market code, he added.
Even local-based builders such as Beazer Homes USA, which barely had any building presence at all in its hometown, have started working to build more in their own back yards.
Land investor Hearthstone recently banked Beazer with some local work when it chose it to market, sell, and finish building out 462 lots in six communities in Atlanta, including Westchase Commons and The Lakes at Sugarloaf in Gwinnett County, The Gates at John's Creek in Fulton County, Thorngate and Olde Union Preserve in Forsyth County, and Cobblestone Creek in Cobb County.
Learn more about markets featured in this article: Atlanta, GA.