PHOENIX-Tuesday 28 July 2020 [ AETOS Wire ]
(BUSINESS
WIRE)-- Walton, a real estate investment and land asset management
company with US$3.39 billion under management and administration, has
expanded its Builder Option Land Development Funds (BOLD Funds), with an
investment objective of raising capital to acquire land identified by
large U.S. homebuilders for near-term residential development projects.
The
collective $500 million in BOLD Funds -- $250 million U.S. fund
targeted at U.S. investors and a separate $250 million offshore fund
targeted at non-U.S. resident investors -- provide an alternative
investment into real estate assets that support the near-term land
inventory needs of leading national homebuilders.
The
newly expanded BOLD Funds offer investors, both domestic and
internationally, the opportunity to participate in the current growth of
the U.S. homebuilding market.
According
to a John Burns Housing Survey, new home demand is on fire with June
new home sales increasing 55% year-over-year (YOY.) Sales improved in
all regions YOY, led by 84% in Florida, 59% in Texas and 54% in the
Southeast. Exceeding 2018 and 2019 pricing strength, 57% of builders
increased net prices in June, while traffic rating was the best it’s
been in four years.
Average
finished inventory fell 20% YOY as consumers clamored for quick
move-ins and 55% of builders expect good sales in the next six months,
compared to 36% one year ago.
The
BOLD Funds intend to acquire properties identified by large publicly
traded U.S. homebuilders for near-term residential development. The land
is then expected to be sold to those same builders in phases with an
agreed upon takedown schedule and flexible payment terms. The BOLD Funds
expect to make distributions to investors as homes are developed and
sold by the builders.
The
primary investment objective of the BOLD Funds is to preserve capital
investment and generate cash flow through the acquisition and sale of
land assets. A purchase and sale agreement with the homebuilder is in
place prior to each acquisition which defines the take-down schedule and
price per phase. Properties are acquired on an all-cash basis and cash
flow is forecast to commence within 6-24 months.
“Walton’s
BOLD Funds meet the needs of an evolving homebuilding industry by
allowing builders to tie up land inventory with option structures that
offer a limited amount of capital down,” said Bill Doherty, CEO, Walton
Group of Companies. “Homebuilders are able to improve their ROI by
better aligning land inventory costs with cash flow from home sales and
investors benefit from a diversified source of cash flow.”
The
National Association of Home Builders (NAHB) Housing Market Index (HMI)
released in mid-June, reported that builder confidence in the
single-family new home market jumped 21 points to 58 in June 2020, also
demonstrating that housing stands poised to lead a post-pandemic
economic recovery. Any reading above 50 indicates a positive market,
stated the Index.
“As
the nation re-opens, housing is well-positioned to lead the economy
forward,” said NAHB Chairman Dean Mon. “Inventory is tight, mortgage
applications are increasing, interest rates are low, and confidence is
rising. And buyer traffic more than doubled in one month even as
builders report growing online and phone inquiries stemming from the
outbreak,” Mon said.
For
over 40 years, Walton has researched, planned and structured
pre-development land investments located in the major growth corridors
throughout the U.S. and Canada. The evolution of Walton has opened the
door to offering new products, like its BOLD Funds, creating new
opportunities for investors and homebuilders.
About Walton
Walton
is a privately owned, leading global real estate investment, land asset
management and administration company that has focused on strategically
located land in major growth corridors for 40-plus years. The company
manages and administers US$3.39 billion of real estate assets in North
America, on behalf of its investors and business partners. Walton has
more than 104,000 acres of land under ownership, management and
administration in the United States and Canada. For more information on
Walton, its entities and the company’s portfolio of assets, visit
Walton.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200727005090/en/
Contacts
Jennifer Whittle
LAVIDGE
480-236-2761
Jwhittle@lavidge.com
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