Going, going, gone! Buildable land in northern Los Angeles is not exactly an abundant commodity. So netting not just one, but two, master-planned communities in the region is a bit of a coup. Miami-based Lennar Corp., together with its real estate investment, finance, and management companies, LNR Property Corp., announced in late summer that it would form a partnership to acquire The Newhall Land and Farming Co. for almost a billion dollars.

Newhall Land, which focuses primarily on master-planned communities, is planning two such developments, Valencia and Newhall Ranch, on about 18,000 acres about 30 miles north of Los Angeles. It appears as if Lennar paid only a small premium above the last stated appraised value for the land, according to a report by Credit Suisse First Boston, whose analysis of the transaction pegs the purchase price at $50,000 per acre. "Assuming all the acquired land is buildable and entitled, we believe this transaction is another coup" for Lennar, writes the research team at CSFB, adding that developed and entitled land in the area is priced today at $500,000 to $1 million per acre.

Lennar, which closed 20,903 homes in 2002, generating gross revenues of $7.3 billion, appears to be spreading its wings across the country. Founded in 1954 in Miami, its recent expansions have been in the Carolinas, Chicago, Baltimore, and central California. Its top market, though, is Houston, where it closed 3,300 homes last year.

The acquisition of the land in northern Los Angeles County is expected to be completed in the middle of 2004, subject to the approval of the California Public Utilities Commission and Newhall Land's unit holders.

Learn more about markets featured in this article: Los Angeles, CA.