COLORADO SPRINGS, Colo. - May 30, 2012 -Mountain Real Estate Capital (MREC) announces the closing of a new investment with Oakwood Homes of Denver to acquire and build out Banning Lewis Ranch, a 2,600-acre, 8,500-approved-lot master-planned community located in Colorado Springs, Colo. The transaction represents MREC’s second investment in Colorado and first with Oakwood. The terms of the transaction were not disclosed.
The site was owned by a bank consortium after the previous owners declared bankruptcy in October 2010. The investment closed in 45 days from signing of contract with no material changes to terms or closing date. The diligence period required the team to address a host of legacy issues hindering the community including: waste water obligations, metro district bonds, redesigning future village land plans, and working with the city to understand the various excessive development obligations and fees that were detrimental to the homebuilders.
The partnership anticipates a five- to eight-year investment horizon in which it will sell lots and participate in homebuilding with five of the largest builders in Colorado Springs including: Classic Homes, Oakwood Homes, Richmond American, DR Horton, and Vantage Homes. Total lot proceeds over the next 10 years from Villages 1-3 sales are expected to exceed $120 million.
Eric Bialke and Joel Kaul of MREC completed the investment for MREC. Mr. Bialke, director, states, “Banning Lewis represents our second investment in Colorado and affirms our investment strategy of partnering with best-in-class operators in targeted markets to help execute our business plans. We are bullish on the Colorado real estate market and excited to partner with one of the largest, most successful private homebuilders in Colorado. Oakwood’s development and homebuilding experience with large master-planned communities will provide significant value-add and stable leadership to a community that has lacked local ownership for some time.”
Oakwood CEO Pat Hamill, states, “Our focus is quite simple: create the best master plan in Colorado Springs and segment the market in such a way that we will eventually appeal to all buyer segments within the market place. We are excited not only about the opportunity that Banning Lewis has for our organization, but for the opportunity to partner with Mountain Real Estate Capital and establish a long-term relationship. Peter Fioretti and his team have been outstanding to work with and recognize the importance of having a local partner who understands the fundamentals of the local market.”
MREC recently partnered with Classic Homes, the largest homebuilder in Colorado Springs, in September 2010 to develop Promontory Point in nearby Monument, Colo. The 267-lot community has had 40 home sales since opening with an expected sell out in late 2015. Classic CEO Doug Stimple, states, “Classic is pleased to learn that the future development of Banning Lewis Ranch will be under the stewardship of Oakwood Homes and MREC. BLR will undoubtedly represent a significant portion of the future homebuilding in Colorado Springs. The new ownership ensures that the future of BLR is in extremely capable hands. Classic Homes looks forward to continuing our relationship with MREC and expanding our presence within BLR as the development unfolds.”
