Walton Launches New Homebuilding Fund

Walton Global Holdings has launched its first homebuilding fund, the Builder Option Land Development or BOLD fund. The new fund will acquire land pre-identified by homebuilders for single-family home development. Walton will partner with its existing network of large-volume homebuilders focusing on resident land projects. The land sites will be sold to these builders in phases through a pre-determined exit strategy.

“We have $3.8 billion in assets under management and 106,000 acres in North America,” Kate Kaminiski, COO at Walton Global Holdings, tells GlobeSt.com. “That is all existing predevelopment land assets, and a lot of it was acquired before the great recession. Prior to that time, we were seeing a significant amount of large land transactions occurring and builders securing long-term land positions. 2008 changed all of that. We not only saw a substantial amount of finished lot inventory in the marketplace, but also builders and developers were really punished by Wall Street for having that land inventory when the markets crashed, and there were pretty strict restrictions on what they could hold on their balance sheets. As a result, we are seeing a lot of developers uninterested in land that isn’t ready to turn within 24 months.”

While the 2008 financial crisis certainly provided demand for this fund structure, Walton’s search to capitalize on its existing acreage portfolio served as the impetus for the fund. “Two or three years ago, we set out to meet with our end users to discuss how we could move the 106,000 acres that we have under management and find exit opportunities that worked for the builders and our investors,” says Kaminiski. “We were pushing bulk sales, but didn’t receive that reception because most were looking for just-in-time inventory and taking down what they can build on. That request from the builders evolved into this fund, which will take on the land banking and land loan risk. These are pre-identified assets by the builders that they can take down in more of that just-in-time inventory strategy.”