DENVER and CHARLOTTE, N.C.—North Carolina-based Mountain Real Estate Capital (MREC) has entered into a strategic partnership with Oakwood Homes, Colorado's largest privately held homebuilders. The $100 million-plus transaction provides MREC, one of the largest U.S. residential real estate investment firms, with a major market presence in one of the strongest homebuilding markets in the country.

Mountain is providing this new Oakwood Homes partnership with strategic equity capital to accelerate its growth and expand into new markets. This equity capital will drive the homebuilding company's expansion both within Colorado, and in other regions, including its recent entry into Omaha.

“Oakwood has clearly developed a competitive edge in their marketplace and continued to reinvent themselves with superior product and market positions during the downturn. Together, we will be positioned to now take advantage of the growing market opportunities throughout the Midwest and Western markets,” said Peter Fioretti, chairman and CEO of MREC.

MREC and Oakwood have been in active discussion since June 2012, shortly after the two firms jointly acquired Banning Lewis Ranch, a 2,600-acre, 8,500-lot master planned community in Colorado Springs, Colo.

The new partnership will carry the Oakwood Homes brand with Pat Hamill, Oakwood's founder, continuing as chairman and CEO and general partner of the venture, directing strategy and providing leadership, vision and support as the company executes its expansion and growth plans.

“While capital is essential to homebuilders, success is also based on relationships and industry experience,” Hamill emphasized. “This partnership not only delivers a capital infusion, it sets the stage for us to take advantage of market demand and expansion opportunities with greater flexibility than others in the industry.”
The new partnership will initially include the following assets:

            Communities                                          9
            Lot Inventory                                         7,100 home sites
            Backlog of sold homes                          348
            Homes under construction                    200
            2013 projected home sales                  600+units

Over the past three years, MREC has completed similar investments with private homebuilders and developers desiring to recapitalize and grow their portfolios in Florida, California, North Carolina, Texas and Wisconsin. MREC has closed deals in 15 states and has 11 solid operating partners around the country.

In Florida, MREC partnered with a top private home builder to recapitalize seven large master plan communities totaling 6,500 units. In greater Los Angeles, MREC partnered with a local developer to redevelop four infill sites. In North Carolina, MREC teamed with a best-in-class developer to acquire seven projects and 2,500 lots from financial institutions. In Houston, MREC partnered with a leading master plan community developer to restructure and develop 2,600 lots and has another 5,000 lots under contract. MREC has also partnered with builder/developers in secondary markets including Colorado Springs, Madison, Wis. and Lewes, Del., to acquire land projects at a favorable basis and provide a platform for future growth for those partners.

Joel Kaul and Eric Bialke, on behalf of Mountain Real Estate Capital, and Robert Sanderman and Jeff Carlson, on behalf of Oakwood Homes, structured and closed the transaction. Moelis & Company, served as the exclusive financial advisor to Oakwood Homes on this transaction.

Instant Insights /

Mountain Real Estate and Oakwood Homes Form Partnership

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