Mattamy Homes on March 16 opened its first models at Millennia Park, a community within the city limits of Orlando, where a year earlier the builder had paid $14 million to acquire 335 undeveloped single-family home sites from K Hovnanian.
Customers were lining up in the parking lot hours before these 40- and 50-foot-wide models opened. Over the next five days Mattamy had sold 43 houses there, at prices ranging from $198,900 to $300,000.
During the past 12 months, the Winter Park, Fla.-based Mattamy Homes has spent more than $50 million buying raw land. Steve Parker, its president, tells BUILDER that the company's U.S. group is now aggressively executing the same business model as its Brampton, Ontario-based parent, which is one of Canada’s leading builder/developers specializing in master planned communities. That means Mattamy’s U.S. group, unlike most large production builders that covet finished lots, is willing to take on raw property to develop into communities where it will build houses and, opportunistically, sell finished lots to other builders.
The company’s growth strategy is evident in Jacksonville, Fla., where Mattamy paid $15 million for 600 raw home sites within the 2,600-acre Bartram Park mixed-use development. The builder just broke ground on the three product types it will offer there, and expects to start selling houses in July.
In October, Mattamy Homes paid $18 million to Wheelock Street Capital for 560 undeveloped lots within the Randal Park community, where the builder expects sales to begin this fall. Randal Park is located in a submarket called Lake Nona, which Parker says “is the new hot market in Orlando.” It’s adjacent to the airport and near a medical research park with a new VA hospital. Parker says Lake Nona is projected to create 10,000 jobs by 2020.
The builder’s boldest move to date occurred on March 7, when Mattamy Homes disclosed that it had paid $15 million for 250 raw acres at Tapestry, a community in the Orlando suburb of Kissimmee, Fla., on the border of Osceola and Orange counties. Mattamy is planning to build 1,050 townhouses and single-family homes whose prices will start in the mid $100s. According to a prepared statement by the builder, Tapestry also will be “highly amenitized,” with a clubhouse, swimming pool, park areas, water areas with three lakes that are more than 10 acres each, and several more ponds located throughout the property.
(Parker notes that Beazer Homes also recently picked up 250 lots at Tapestry, and that Park Square Homes has started building rental housing there for its customers residing outside of the United States.)
Since Parker joined Mattamy Homes six years ago, the company has doubled in size. Even during the housing recession, Mattamy bought land, albeit cautiously, as many of the deals it looked at then “simply didn’t make the financial cut,” he recalls. As market and economic conditions have improved, Mattamy has been trying “to get out ahead of the market” with land purchases that Parker admits probably would not be available today—at least not at the prices Mattamy paid—because so many other builders are purchasing real estate again, too.
“Land is hard to come by; that’s 110% correct,” Parker says. But he believes Mattamy’s willingness to take risks on large, undeveloped properties will, in the long run, give it more “flexibility” in terms of developing lots for its own production objectives, or selling lots to other builders that might, in turn, have real estate elsewhere that Mattamy would be interested in.
“We believe that land is an investment, and buying raw land allows us to control the development and add market value to our communities,” he says.
Mattamy’s U.S. group also builds in Charlotte, N.C., Minneapolis, and Phoenix. Parker says that in the first two markets, Mattamy is conducting due diligence on parcels that are similar in size to what it acquired at Tapestry. Mattamy also is looking to purchase large undeveloped properties in Phoenix.
John Caulfield is senior editor forBuilder magazine.