St. Joe Sells Residential Unit to Cendant's NRT in $170M Deal

In the biggest sale-merger package of its kind in at least 25 years, the Jacksonville, FL-based company Wednesday sold its Clearwater, FL-based Arvida Real Estate Services subsidiary to NRT Inc., a unit of New York-based Cendant Corp. and parent of Coldwell Banker Residential Real Estate.

The $170 million, all-cash deal comprises $158 million for the assets and $12 million for working capital. The assets take in brokerage, mortgage and title services. St. Joe paid Prudential Insurance Co. $100 million in 1998 for the business, then called Prudential Florida Realty.

The sale doesn't include St. Joe's community development unit, called Arvida, which has been developing master-planned communities in Florida for 40 years. St. Joe's commercial/industrial assets are not involved in the NRT-Cendant deal

In a simultaneous related transaction, Coldwell Banker, operated by NRT, and Arvida merged. Coldwell and Arvida will operate under the Coldwell banner. Merger terms weren't disclosed.

Orlando-based Judith Green will continue to lead Coldwell as president/CEO. Rich Cope, Arvida's former president/CEO, becomes a senior consultant to NRT.

In a prepared statement, Green says the merger makes Coldwell Banker the largest real estate brokerage company in Florida with 7,500 sales associates in 200 offices.

Tied in with the Arvida-Coldwell merger, is the assimilation of Naples-based Coldwell Banker McFadden & Sprowls. Terms of that merger also weren't disclosed.

But a South Florida area broker intimate with both deals tells GlobeSt.com on condition of anonymity the trade was "in the multimillions." An Orlando broker familiar with the transactions tells GlobeSt.com, "It may not have been a $170 million package, like the St. Joe-Arvida deal, but it was at least half of that number."

Arvida Realty Services "created significant value for JOE shareholders," Peter S. Rummell, St. Joe's chairman/CEO, says in a separate prepared statement. "We purchased the company over three years ago at a good price and have grown the business substantially, both in geographic reach within Florida, as well as in the breadth of services ARS provides to customers."

Rummell says Arvida Realty Services "performed exceptionally well, providing an outstanding earnings stream" for St. Joe. He attributed much of Arvida Realty's success to Cope.

St. Joe did the deal at this time because market conditions were right for the company to sell and obtain a good return for shareholders, says Rummell, who formerly headed Walt Disney World's Imagineering division.

"As a result of rapid consolidation in the residential real estate services business, ARS became an attractive acquisition for national brokerage organizations seeking to expand in Florida," Rummell says.

"Industry trends and market conditions created an extraordinary opportunity for us to capture the significant value that we had created for shareholders."

St. Joe's common closed at $30.60 per share on the New York Stock Exchange Wednesday, down one cent from Tuesday. Volume was 43,900. The company has 79.6 million shares outstanding and a market capitalization of $2.4 billion. The stock's 52-week high-low was $30.85 and $22.75 per share.