BEVERLY HILLS, CA-Toll Brothers' recent acquisition of Shapell Industries Inc. for in a $1.6 billion, all-cash transaction shows the vast inherent value of Shapell's land holdings, GlobeSt.com reports in this update to a previous story.
"While Toll Brothers has acquired other builders in the past, they typically grow their operation organically,” Sal Provenza tells GlobeSt.com. Provenza is a Colliers International SVP who has formerly provided advisory services to Toll Brothers as a principal partner at CWP Advisors. “They're willingness buy Shapell is a testament to the strength of the market and the quality of Shapell's land holdings."
Shapell's portfolio consists of 5,200 mostly entitled land sites in affluent coastal California markets. Including nearly 2000 sites in the Bay area and 1,700 sites at Los Angeles Porter Ranch, the land portfolio is 97% entitled. Shapell collected the over several decades.
"Public offerings and mergers in the homebuilding industry will continue, especially for builders backed by private equity investors,” says Provenza. “The combination of market recovery and holding periods dictated by closed-end funds will encourage those investors to exit over the next few years."
Land has been selling at a premium. Recently, GlobeSt.com reported that Mack Urban and AECOM Capital purchased a six-acre site in Downtown Los Angeles for $80 million to build class-A, high-rise apartment buildings.
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