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GL Homes bucks trend, buys $117 million of land Thursday, March 27, 2008 Excerpt from the Palm Beach Post March 27, 2008
By Jeff Ostrowski | Palm Beach Post
Home builders are dumping land, cutting workers and otherwise retrenching, yet GL Homes is still buying. The Sunrise-based builder just paid $117 million for 1,068 acres west of Delray Beach.
Privately held GL Homes bought the site from the Hyder family. The builder put the tract under contract during the real estate boom and closed on the deal early this month, according to property records.
According to plans GL submitted to county officials in 2005, about half the land it bought is west of State Road 7 and will remain farmland to satisfy county rules that require builders in the Agricultural Reserve to set aside land for rural uses. GL promised to preserve 547 acres west of Delray Beach and SR 7 to meet requirements for another project at the southwest corner of Boynton Beach Boulevard and Lyons Road.
The other half of the land in the March deal is east of SR 7 in suburban Delray. It’s part of a site slated to hold 550 new homes.
“It is certainly swimming upstream to be buying land when most other developers and builders are trying to sell it,” said Brad Hunter, a housing analyst at Metrostudy in West Palm Beach. “But the Ag Reserve is somewhat GL’s home base. They know the area well.”
GL Homes is selling houses at Canyon Lakes at the southeast corner of Boynton Beach Boulevard and Lyons Road. And in a deal outside the Ag Reserve, GL in 2005 paid $185 million for the 4,900-acre Indian Trail Groves west of The Acreage.
GL’s latest deal comes as builders face difficult times. Irvine, Calif.-based Standard Pacific has been selling parcels in Palm Beach County. Miami-based Lennar last year sold 11,000 home sites to a real estate arm of Morgan Stanley. And Levitt and Sons, a division of Fort Lauderdale-based Levitt Corp. (NYSE: LEV, $1.60), filed for Chapter 11 bankruptcy protection.
GL appears to be getting ready for the market’s turnaround, housing experts said. “They’re positioning themselves to be well-stocked with land at a time when land will be scarce once again,” Hunter said.
GL Homes paid $110,000 an acre for the 1,068 acres along SR 7. Analysts say it’s difficult to compare prices of residential land because of preservation rules and other factors.
But GL paid $38,000 an acre for Indian Trail Groves, and Standard Pacific last year sold 54 acres along Florida’s Turnpike to an industrial developer for $264,000 an acre.
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