Developer Brookfield Properties has closed on its previously announced acquisition of Newland, one of the country’s largest master-planned community developers. The transaction includes Newland’s 5% general partner’s equity interest in 15 of its 20 active master-planned communities and widens the combined companies’ geographic footprint, adding new markets and strengthening shared operations.
BUILDER spoke with two of Brookfield’s leaders, Adrian Foley and Ted Nelson, for insight into the now combined companies’ integration plans and strategies for future growth. Foley is president of Brookfield Properties’ development group as well as a managing partner of Brookfield’s real estate group. He currently oversees the company’s land and housing and mixed-use development business lines, and has previously held a role as president and COO of Brookfield Residential, Brookfield Properties’ land development and home building company.
Ted Nelson is the CEO at Newland and currently oversees the Newland/NASH portfolio within Brookfield Properties’ development group. He had joined Newland through the acquisition of the Terrabrook portfolio in 2003 and has more than 40 years of master-planned community experience.
BUILDER: How did the companies decide to incorporate, and how will the acquisition "roll out" over time?
Foley and Nelson: Both companies came together through mutual interest to grow the master-planned community business in the U.S. Our exchange was over the last nine months, with some more detailed dialogue this year. After spending more time to further get to know each other, we realized we have a fantastic opportunity to leverage the talents in both companies and that joining forces was greater than the sum of the parts.
We plan on fully integrating Newland team members into the Brookfield development team over the course of the next six months. The impetus to combine operations came from both companies’ recognition of the home building industry’s need for a consistent supply of finished lots, which necessitates significant and consistent investment in raw land.
BUILDER: How do you plan to improve upon your existing master-planned community models?
Foley and Nelson: We see this as a great opportunity to bring together the strength of the community development focus that both companies have and ideate on the future. We have our own ideas on how communities are designed, support the lowest energy use, and how the builder/developer relationship can improve, along with the customer focus. When you layer in the complementary skills we bring as a creative home builder, it is a powerful blend.
BUILDER: Do you intend to make changes to any communities in progress?
Foley and Nelson: No, change for change’s sake is not the intention. Each of us has always been driven by the home buyer and what their needs are; we listen extremely carefully to our buyers and incorporate their needs and wants that we believe will lead to better communities—needs, wants, and ideas about the tangibles and intangibles that will prove to enhance the long-term sustainability of our communities. Rather, we will use the next six months to ideate on where and how we can add value and, along with our partners, make the right decisions for the developments.
BUILDER: How do Brookfield and Newland intend to combine and scale land development operations?
Foley and Nelson: We are complementary footprints, only four markets overlap today, and we can add nine or 10 new markets to each of our operations. We will use these 20 locations as “operational hubs” and launch our development opportunities from these.
BUILDER: What are the companies’ goals for the future?
Foley and Nelson: Our immediate goal is to make certain that we are prudently maximizing our penetration in each of these markets, as this alone can quickly lead to exponential growth and allows for this growth by simply leveraging existing teams’ expertise.
Longer term, we will want to grow into additional markets methodically but all the while recognizing the continued need for additional housing across the country.
We can’t share numbers or forecast, but we can share that joining forces positions Brookfield Properties, which now includes highly sought after Newland communities as well as our own Brookfield ones, puts us in a great position for growth.
BUILDER: Can you tell me more about plans to incorporate single-family rental operations?
Foley and Nelson: We will evaluate the single-family rental opportunities across our 40 master plans and currently can see the opportunity for approximately 10,000 SFR lots that could be delivered across the portfolio. Brookfield Properties has an SFR business, and, like the home building opportunities, we will look to value these vertical investments to maximize the value of the land being developed.
It’s another segment we provide as a fully integrated developer. What makes us and our communities unique is our ability to recognize and meet the needs of many buyer segments.
