A new yardstick land deal in Orlando, Fla., measures how far raw, entitled land prices have fallen from near market peak in early 2005 to today. The measure: 70%.
In late September, Standard Pacific Homes bought 402 acres of well-located, undeveloped land in the Orlando suburb town of Ocoee for $8.5 million. In January of 2005, Beazer Homes USA paid $29 million for the parcel, which has entitlements in place or 925 homes, according to Orange County property records.
That amounts to a per-lot price drop from $31,351 to $9,189.
“We like the fact that the [Ocoee] sub-market is very appealing to the move-up buyer,” said David Pelletz, Southeast regional president for Standard Pacific.
The land is within a mile of the 429 highway, a toll road that runs west of Orlando and connects to the Florida Turnpike and a Disney World exit. The parcel is also only a 20 minute drive to downtown Orlando.
Standard Pacific plans to start building infrastructure on the first phase, on the southern portion, with 150 lots in early 2012 and start selling homes there in early 2013. The community will be gated with a pool and cabana. Pelletz said plans call for the larger second phase, which will include a bigger clubhouse and set of amenities, to start in 2014.
Both phases offer hilly topography with lake views and plenty of trees on-site. The homes have not yet been priced.
The company recently bought a smaller parcel with 50 developed home sites called East Lake Park from Orleans Homebuilders in another hot Orlando sub-market in the Lake Nona area, which has become desirable because of new medical-related development. East Lake Park already has about 25 homes built by Orleans Homebuilders.
The company is now busy creating a library of new home plans specifically for the Florida market. It will be modifying a suite of great room–centric plans it recently developed to add increased storage to help compensate for the lack of basements in Florida, Pelletz said.
Standard Pacific has faith that there are pockets of opportunity in Florida in well-located communities. “I don’t think it’s a secret that two years ago we said, ‘Let’s take a good look at everything that is happening in the market and find some top-quality locations that appeal to the move-up buyer where we can get good absorptions and that have good site characteristics,’” he said. “We’ve had 15 grand openings in Florida in 2011. We just continue to look for the best opportunities.”
Beazer did not comment on the Orlando land sale, which closed just in time for the end of the Atlanta-based Beazer’s Sept. 30 fiscal year. It also recently sold an 18.4-acre parcel inside the Interstate 277 loop in Charlotte, N.C., for $21.6 million, the Charlotte Observer newspaper reported. That land was bought by Charlotte Pipe and Foundry, which has no plans to immediately develop it.
In Beazer's last conference call with analysts on Aug. 9 the company said it expected to sell $45 million in land by the end of its Sept. 30 fiscal year.
Teresa Burney is a senior editor for Builder magazine.