NEWPORT BEACH, Calif.--(BUSINESS WIRE)--William Lyon Homes (the “Company”) (NYSE: WLH) has announced the execution of a definitive agreement to acquire an infill portfolio of residential land from City Ventures, LLC for an aggregate purchase price of approximately $174.5 million. The acquisition includes approximately 540 lots in eight new home communities located in Orange and Los Angeles Counties in Southern California, and Santa Clara County in Northern California. The Company believes these markets represent three of the most land constrained markets in the Western U.S. and also demonstrate strong homebuyer demand. The acquisition is expected to occur in phases beginning in the first quarter of 2014, subject to certain customary closing conditions.
Three of the new communities are expected to open for sale by the end of 2014, with the balance opening in the first half of 2015. The homes in the portfolio are expected to have average sales prices in the mid $900,000s and are expected to contribute more than $500 million in incremental revenue by 2016.
Pro forma for the acquisition, the Company owned or controlled 14,288 lots, including over 4,200 lots in California, as of December 31, 2013, positioning the Company for meaningful growth in deliveries in 2015 and 2016.
“The acquisition of this portfolio represents a unique opportunity to exceed our short term growth objectives in some of the most desirable and land constrained locations in all of California,” said William H. Lyon, Chief Executive Officer. “We expect this transaction to meaningfully increase our revenues for 2015 and 2016 and to be accretive on an earnings basis for our shareholders.”
“The diverse range of product offerings in this portfolio speaks to the breadth of product expertise that William Lyon Homes can deliver to prospective new home buyers,” said Matthew R. Zaist, President and Chief Operating Officer. “The new communities are consistent with our operating strategy to provide innovative new homes that meet buyers’ desires across the entry-level and move-up markets within some of the best coastal California submarkets.”
Set forth below are highlights regarding each new home community in the portfolio:
Northern California
Mountain View – 33 planned single family attached homes with three and four bedrooms. The project is located in close proximity to the 101 Freeway and some of Silicon Valley’s largest employers. Anticipated pricing from the low $1 million range.
Morgan Hill – 110 planned single family attached townhomes. The project is located in close proximity to the Morgan Hill downtown area and within walking distance to the Cal Train station providing access to the major job centers in Silicon Valley and the San Francisco peninsula. Anticipated pricing from the mid $500,000s.
Southern California
Dana Point – 37 planned luxury single family attached villas adjacent to a five star ocean view resort. Residents will have access to resort amenities including pool, spa and fitness centers, golf and tennis as well as the ability to join a private beach club. Prices anticipated from the mid $2 million range.
Glendora – 121 planned single family estate homes on minimum half-acre lots. Large single story homes averaging over 4,900 sq. ft. Pricing is anticipated from the low to mid $1 million range.
Lakewood – 72 planned single family attached townhomes. Close proximity to the Lakewood Center, which is one of the largest retail shopping centers in America. Pricing anticipated from the mid $400,000s.
Claremont – 95 planned single family attached townhomes. The community will have excellent commuter access to the I-10 and I-210 freeway corridors and the Claremont Colleges. Anticipated pricing from the mid $400,000s.
Sunland – 18 planned single family detached homes located at the Big Tujunga Canyon entrance to the Angeles National Forest. Anticipated pricing from the mid $600,000s.
A centrally located Orange County infill project, which will provide three to four bedroom homes within a community known for its excellent school system and accessibility to prime employment centers. Pricing is anticipated from the $700,000s.
About William Lyon Homes
Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single family detached and attached homes in California, Arizona, Nevada and Colorado. Its core markets include Orange County, Los Angeles, San Diego, the San Francisco Bay Area, Phoenix, Las Vegas, Denver and Fort Collins. The Company has a distinguished legacy of more than 58 years of homebuilding operations, over which time it has sold in excess of 76,000 homes. The Company markets and sells its homes under the William Lyon Homes brand in all of its markets except for Colorado, where the Company operates under the Village Homes brand.
About City Ventures
City Ventures is a rapidly growing California homebuilder focused on repositioning underutilized real estate into residential housing in supply constrained coastal urban infill areas, as well as high demand suburban locations. City Ventures is based in San Francisco and Newport Beach, California. It focuses on the construction of town homes, condominiums, lofts, mixed use, live-work and single family detached homes in the Southern and Northern California coastal urban infill communities from Santa Barbara to San Diego and from the San Francisco peninsula through Silicon Valley and the East Bay. City Ventures currently owns and controls over 14,000 lots in California.
Certain information included in this release is forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, information related to: anticipated operating results; anticipated financial performance, resources and condition; selling communities; home deliveries; average home prices; consumer demand and confidence; market and industry trends; consummation of the proposed portfolio land acquisition transaction described herein and the anticipated benefits to be realized therefrom; and post-closing asset sales. Words such as “expects,” “anticipates,” “believes,” “positions,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others: changes in general economic conditions and in the markets in which the Company operates; limitations on the Company’s ability to utilize its tax attributes; the Company’s ability to consummate the proposed portfolio land acquisition transaction described herein on time or at all, and to realize the anticipated benefits therefrom; limitations on the Company’s ability to reverse any remaining portion of its valuation allowance with respect to its deferred tax assets; changes in mortgage and other interest rates; changes in prices of homebuilding materials; adverse weather conditions; the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements; the availability of labor and homebuilding materials; construction delays; changes in governmental laws and regulations, the timing of receipt of regulatory approvals and the opening of projects; the availability of adequate insurance at reasonable cost; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; and the availability and cost of land for future development, as well as the other factors discussed in the Company’s reports filed with the Securities and Exchange Commission.