The two golf course communities—Rhodes Ranch, in Vegas’ southwest valley, with 314 finished and 1,993 unfinished lots; and Tuscany Village, in Henderson, Nev., with 350 finished and 559 partially developed lots—had been owned by Rhodes Homes, which filed for protection from creditors under Chapter 11 a year ago.
A group of five lenders led by Credit Suisse, owed $370 million by Rhodes Homes, took over these communities (which collateralized that debt) last January as part of a final court-approved restructuring agreement reached between the builder and its secured creditors.
Dunhill officials expect the developments to yield more than 2,300 residential units through the buildouts.
Richard Dix, Dunhill Homes’ chairman and the former president of Pulte Homes’ Mountain West Area, had been acting on behalf of the lenders—which had accused Rhodes Homes and its owner Jim Rhodes of mismanaging cash—overseeing Rhodes Homes’ expenses and contractors while it was in Chapter 11. The lenders retained Dix as a consultant through Carwin Advisors, a business unit of Winchester Carlisle, a real estate holding company that is Dunhill Homes’ parent.
Dunhill Homes, which has been operating for about a year, on April 1 assumed management of the two communities as well as several commercial parcels that include 50 acres in southwest Las Vegas. Dunhill expects to close 200 homes in the two communities in 2010.
Dunhill's entry into the Las Vegas market is being led by Don Boettcher, who’s been building homes for a generation and had worked for Pulte in various management positions including being part of its Las Vegas division’s executive team. He calls Dunhill’s move into this market “a fresh start for these exceptional assets.”
In an interview with BUILDER on Tuesday, Boettcher said that Dunhill’s “first priority” is “to get our arms around these communities over the next year.” For the time being, Carlisle will continue operating and managing Rhodes’ assets, which include models that range from 1,264 to 3,021 square feet and start in the high $100s, according to Dunhill’s Website. Boettcher added, however, that his company is evaluating Rhodes’ home plans for changes it might need to make in its product mix. “We want to make sure we’re hitting the market’s sweet spot,” he explained.
(In Texas, Dunhill Homes is currently selling houses at the active-adult community Wellstone at Craig Ranch in McKinney, whose models range from 1,700 to 2,600 square feet, and are priced from $350,000 to $400,000.)
Dunhill is entering a Las Vegas market that is still reeling from the housing recession. Local builders and developers pulled only 5,675 residential permits last year, according to Hanley Wood Market Intelligence estimates. And Las Vegas was one of four markets that posted new lows on the latest S&P/Case-Shiller Home Price Index. Foreclosure filings in Las Vegas remain among the highest in the nation, but they have been receding a bit in recent months.
“I wouldn’t say it’s a turnaround,” said Boettcher. “We’re bumping along the bottom and have reached stability, which is a lot better than a year ago when [the market] was in freefall.”
John Caulfield is senior editor for BUILDER magazine.