Lennar Homes on Friday quietly sold 8,300 home sites in seven Florida counties to land developer Metro Development Group. The deal came as Lennar's fiscal year closed and on the same day it sold 11,000 lots around the country into a joint venture with Morgan Stanley.

The purchase was triggered by Lennar's desire to convert many of its land holdings to cash amid the nationwide housing market slowdown, said Rob Ahrens, a Metro Development vice president. Lennar has not commented on the sale.

The sale price was not disclosed but Ahrens said, "This was not a fire sale deal. This was two companies that do a lot of business together deciding that this was the best thing for both companies. This was a win-win."

Metro Development typically purchases raw land, acquires entitlements for it, develops the horizontal neighborhood infrastructure and then sells finished lots to builders. Lennar has been one of the company's biggest clients over the years, said Ahrens. The land Metro Development bought from Lennar is fairly raw and lacks entitlements.

"Lennar saw this as an opportunity for them to be able to focus on their home building operations and let their favorite developer focus on developing real estate for them," said Ahrens. He said the company will continue to work to get the land entitled so it will be ready for sale to builders when the market turns around, which it is estimating will happen in Florida not before 2009 and perhaps not until 2010. While Lennar may buy the land back from Metro development as finished lots, Metro has the ability to resell it to any party, Ahrens said.

The purchase boosts Metro Development's holdings by 40% to 30,000 home sites in Florida, the company reported. Ahrens said Metro Development is looking to make even more land buys in the very near future as more builders fall into distress. The Lennar deal just came together faster because the companies are used to working together, he said.

Ahrens said the deal was funded from Metro Development's revolving line of credit with local banks, not private equity money. JMP Securities served as an advisor to Metro Development on securing the equity contribution to the deal, said JMP managing director Tony Avila.

Metro Development was founded in 2003. Its president, John Ryan, is also a member of The Ryan Group. Last year the company, which is headquartered in Tampa, Fla., and has offices in Orlando and Jacksonville, generated nearly $200 million in sales.

Among the parcels involved in the deal:

Tampa Bay Area:

Pasco County, Epperson Ranch, 3,905 home sites on 1,700 acres.

Hillsborough County, Waterleaf, 530 home sites on 140 acres.

Polk County, Leomas Landing, 393 home sites on 94 acres.

Sarasota County, Hidden Palms, 98 home sites on 41 acres.


Lee County, Stoneyybrook North, 1,275 home sites on 741 acres.

DeSoto County, Stoneybrook Oaks, 1,249 home sites on 641 acres.

Central East Coast:

Brevard County, Chaparral, 850 home sites on 246 acres.

Learn more about markets featured in this article: Orlando, FL.