D.R. Horton plans to develop a new residential community on about 160 acres in South Houston, near Highway 288 and Orem Drive south of Sims Bayou.
The national builder will request variances at the Feb. 14 meeting of the city planning commission to not include public streets throughout the proposed gated community site. The new development named City Gate in agenda documents would be close to another D.R. Horton development, City Park, where homes start at $211,99. County appraisal records show D.R. Horton hasn’t yet bought the land for the nearly 160-acre project and requests for comment from D.R. Horton weren’t immediately returned. City Gate will be a few miles from the new $13 million Houston Sabercats rugby stadium under under construction and would sit west of about 150 acres owned by the Harris County Flood Control District. U.K-based engineering and software company Aveva Group PLC signed a three-year deal for naming rights for the new stadium at 12131 Kirby Drive. In February 2018, Houston City Council approved a $3.2 million deal where the Sabercats would lease 41 acres from the city-owned Houston Amateur Sports Park LGC Inc. to develop a new stadium. In December, New Jersey-based K. Hovnanian Homes asked the planning commission to replat a 15-acre tract near the rugby stadium site into 165 separate lots and 33 reserves for a development named Kirby Landing, the Houston Business Journal previously reported. D.R. Horton ranked first amount Houston-area homebuilders with 3,033 closings around Houston between Jan. 1-Dec. 31, 2018, recent data from the housing research firm Metrostudy showed. The builder accounts for 13.38 percent market share across the region. Reported by the Houston Business Journal (Feb. 12, 2019)
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Six-year-old Franklin Johnston Group continues to grow by leaps and bounds in development and management of multifamily properties. The multifamily development and property management company is bringing three new apartment communities to Virginia Beach this year: Coastal 61 at Oxford Village, Two Hundred West and The Renaissance.
The group began operations May 1, 2013, with 24 managed properties. It added 20 new properties to its portfolio in 2018. Today it owns and manages more than 16,000 units at 95 properties in seven states from Washington, D.C., to Atlanta. “We’re a development and management company and development is certainly an area that allows our company to grow both development-wise and through our management portfolio expanding,” said Tom Johnston, chief development officer. “Development is driving growth, but so is management of other portfolios for other owners. The company’s assets exceed $1.8 billion with an additional $200 million in development under way. Taylor Franklin, chief operating officer said the company manages property up and down the East Coast. “Our team members are some of the best in the multifamily industry; we’ve gone into a lot of the greatest minds in Hampton Roads and Virginia to help us grow the company and we want to live by the core value that we have, which is people are our passion.” The Virginia Beach-based company has more than 400 employees and opened a second corporate office in Arlington at the end of January. The 2500-square-foot office houses a 10-member team. Johnston said the new developments will be a great addition to areas of Virginia Beach that are undergoing redevelopment and transformational change. “We’re not just building apartments, we’re building communities and places that our residents call home for one or two and oftentimes many years,” Johnston said. “Our success continues to center on creating the kind of modern-day, amenity-packed communities that people demand and want to call home,” Franklin added. COASTAL 61 AT OXFORD VILLAGE Franklin Johnston will break ground in April for this 248-unit complex adjacent to Virginia Wesleyan University. It will be built on vacant land previously owned by the university and will feature one-, two- and three-bedroom apartments ranging from 833 to 1,395 square feet. Leasing costs will range from $1,180 to $1,650 per month. The community will also include a rooftop sky park, a two-story clubhouse and a resort-style swimming pool with a custom design and high-end landscaping. Coastal 61 is expected to open in late 2019. The name comes from year Virginia Wesleyan was founded and part of a moniker often used to identify the Hampton Roads region. Johnston said there is a great deal of commercial growth in the area as well as at the university which now offers graduate level programs. “Because it’s so centrally located we probably will attract a diverse tenant base,” Johnston said. TWO HUNDRED WEST This new community on the west side of the Pembroke strategic growth area will feature 264 apartments, a resort-style swimming pool, two-story clubhouse, business center, state-of-the-art fitness center and a playground. Set to open this summer, Two Hundred West is being built on property on the west side of Virginia Beach’s Town Center. The land was previously occupied by a warehouse owned by Bluelinx. Apartments will rent for $770 to $1,020 per month. Franklin said the city of Virginia Beach has been involved in the project by assisting with a new retention pond surrounding the development’s 90 acres and a new pump station. “The city’s really investing heavily in the infrastructure to make sure the site doesn’t flood, make sure the surrounding areas have enough retention ponds to accommodate the runoff,” Franklin said. “Which I think is really important to highlight the city’s investing a lot of money to help that community.” Johnston said city's work is a catalyst to provide infrastructure to support future development along the corridor. THE RENAISSANCE The company will break ground in May for this new development with 240 apartments. It is anticipated to be completed late this year or early 2020. The Renaissance will also be on the west side of Town Center, near the intersection of Virginia Beach Boulevard and Witchduck Road. The development will include a two-story clubhouse, resort-style swimming pool and dog park. Rent will be from $750 to $1,300 per month. Reported by The Hampton Roads Business Journal (Feb. 11, 2019) If your only source of information was a stock price chart, it would be easy to assume that 2018 was a bad year for homebuilder Meritage Homes, with its stock price finishing the year down 28% and spending most of the year headed south.
In a sad stock market irony, this is about as far from the truth as it gets: 2018 was a banner year for Meritage in just about every aspect. It sold 11% more homes than the year before (and at higher margins), grew earnings per share by 64%, substantially increased cash flow, improved its balance sheet, and repurchased several million shares of its stock. All while shifting its business strategy to the segment of the housing market where most of the demand will be in the coming decade. Let's take a closer look at Meritage's fourth quarter and full-year results, announced on Jan. 30. The move to entry level is paying off. To sum up 2018 and the fourth quarter for Meritage Homes, the shift to build more starter homes is really paying off. Home-closing revenue increased 8% in the quarter and 9% for the year, while the company closed on 11% more units in both the quarter and the year than the year-before periods. Here's where it gets really interesting: Despite commanding lower prices -- Meritage reported a 3% decline in the average price of a home it closed on in the quarter and a 1% drop for the year -- those homes were more profitable. Home-closing gross margin was 19% in the fourth quarter, up from 18.2% the year before and the highest mark since 2015. For the year, gross margin was 18.2%, up from 17.6% in 2017. The combination of more units and higher margins resulted in a nice bump in profitability. For the full year, gross profit on homes increased 12% -- significantly better than the 9% revenue growth -- while pre-tax earnings increased 14%. A note on the big surge in earningsOn the bottom line, GAAP net income surged 112% in the quarter and 59% for the year, but it's worth noting that this was partly due to some changes that won't recur. When the federal government enacted the tax bill in late 2017 that dropped corporate tax rates, a lot of companies were forced to take a paper loss on the revaluation of deferred tax assets. In Meritage's case, this resulted in a $19.7 million charge against its earnings in the year-ago quarter. A couple of things to remember: First, because this was a one-off adjustment, and the long-term benefit of a lower tax rate will more than offset it, Meritage's pre-tax profits offer a little better picture of its earnings growth over the year and the quarter. Second, there's no doubt the lower tax rate will continue to benefit the company; Meritage's provision for income tax fell by 46%, more than $48 million for the full year. For context, that's enough money to cover more than an entire quarter of the company's general & administrative expenses. Looking ahead: Keep expectations in checkTo be fair, there is indeed some concern with the housing market. Meritage's home orders declined by 15% in the fourth quarter, and the backlog ended 2018 with 15% fewer homes on order. This was partly due to a very strong surge in orders at the end of 2017 after hurricanes affected demand for housing in Florida and Houston. But there was also the very real impact of some customers canceling orders in some markets this year due to caution about interest rates and economic conditions. However, some of the reduction in home orders is also a product of the shift to entry-level homes. The company said 41% of home orders for the year were entry level, a 25% increase, and 56% of its closings in the fourth quarter were speculative sales versus orders from prior periods. One of the realities of shifting to more entry-level homes is that more of these are sold on spec, which could hurt the order backlog. Since these homes aren't custom-built, there's simply less demand to order before construction starts. CEO Steven Hilton said that the company would not give guidance for the full year until the end of the first quarter, "... after we assess market conditions with the benefit of the spring selling season." But the company did cite expectations of 1,500 to 1,625 new home closings in the first quarter, or 9.4% fewer than it closed in the first quarter of 2018. This is largely due to the 15% reduction in the beginning backlog as discussed above, but also because home sales have slowed over the past couple of quarters. Furthermore, gross margin is expected to fall between 50 and 75 basis points, as the company plans to increase sales incentives to attract more customers. Put it all together, and Meritage Homes may not have quite as productive a year in 2019 as it did last year. But improvements in the profitability of the homes it builds, along with another year of lower tax rates, should keep it solidly profitable. No matter how 2019 plays out, management has positioned the company in the sweet spot of housing demand for the next decade or more. Reported by The Motley Fool (Feb. 1, 2019) |
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