(Crystal Proenza is associate editor of Real Estate Florida.)
LEHIGH ACRES, FL-Brookwood Value Partners LLC, an affiliate of Massachusetts-based Brookwood Financial Partners LP, has purchased 214 finished residential lots here as part of its new buying strategy focused on purchasing land with entitlements ready to be built upon. The vacant lots are part of a planned residential community at Homestead Road and Marble Brook Boulevard called the Grove. Terms of the deal were not disclosed.
"Land is poised for a comeback quicker than other markets," Thomas N. Trkla, Brookwood's chairman and CEO, tells GlobeSt.com. "We have started focusing on the best value to play and we don't think it's in commercial property right now, and we don't think it will be in the next 12 to 24 months."
The company decided to pursue the purchase of finished residential lots after it sold a $650-million commercial portfolio including more than 4.7 million sf. "With the increased amount of capital entering the commercial real estate market, there was a resulting downward pressure on capitalization rates," says Trkla. "In our opinion, the assumptions underlying the drastic increase in prices were overly aggressive, leading to unhealthy leverage levels and unsustainable rent increases. As a result, we elected to lock in our gains at historically favorable valuations and become a net seller of real estate."
Brookwood's purchase at the Grove is the first move made under the new strategy. The single-family and villa residential lots were acquired from national homebuilder D.R. Horton Inc., which will finish another 140 lots that the company plans to purchase.
Brookwood is currently negotiating seven additional residential community purchases in southwest Florida, including one in the Punta Gorda area that will close in a month, says Trkla. The company is targeting the area from Naples to north of Fort Myers to the end of Lake Okeechobee, and is also looking elsewhere in the state at Jacksonville and Orlando, he says.
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