Given where TRI Pointe is in its fast-forward evolution from 2009 fee-builder to a 2013 ready-for-primetime publicly-traded home building enterprise, the two acquisitions offer a sharp view of what's often a "black box" for home builders: the land strategy.
Quickly, here's the basics of the two deals, as stated in TRI Pointe's press release:
The acquisition in Vacaville, comprised of 141 lots, is located within the master planned community of Southtown. The city of Vacaville is located in north-central Solano County, equidistant between San Francisco and Sacramento. The 141 lots will average 5,000 square feet and the homes will range from 1,900 to 2,800 square feet. Priced in the low to mid $400,000 range, the project will offer entry-level product for Bay Area homebuyers.
In Irvine, the company has acquired 61 lots within in the master planned community of Stonegate by The Irvine Company. The lots will average 4,000 square feet in size with move-up product ranging from 2,900 to nearly 3,600 square feet, which will be priced in the low millions. The project, called Arcadia, will open at the end of June 2013.
- a NoCal and a SoCal parcel leveraging the masterplanned community relationships that TRI Pointe management promised would come into play as they took their story to Wall Street investors six months ago
- two or more buyer profile segments, the nearer-term tract (61 lots in The Irvine Company's Stonegate) aimed at higher-end buyers, and a neighborhood shooting for entry-level buyers in late 2014, when that segment may find improved access to mortgage credit
- each parcel adds scale to already-on-the-ground divisions, whose market intel, prospecting, and marketing programs are established
What will be key in present and near-term land and lot acquisition strategies is a keen sense of what will turn quickly, and what may need more time. Optionality, the ability to pay prices that will match to one's skill-set, designs, price-positions, and programs, will come mostly from relationships, and the TRI Pointe team of Doug Bauer, Tom Mitchell and Mike Grubbs, can draw on 20-some years of working for William Lyon Homes as the basis for relationships with land sellers and masterplanned community developers.