Real Deals

Real Deals: Land development firms in demand as market recovers

dbracken@newsobserver.comMay 7, 2014 

There was a period during the housing downturn when survival became the name of the game for most land development companies. If they were able to survive the sudden drop in property values and halt in new development activity, they tended to focus desperately on trying to hold on to the assets they already had.

Many didn’t survive; others emerged with their capabilities greatly reduced.

But as the market has recovered and land has become scarcer, the need for companies that specialize in all aspects of land development and site planning has slowly started to return.

“Now, we’re really getting back to it,” said Perry Reader, president of Reader & Partners, a development firm that spun out of Charlotte-based Crosland in 2011. “And there aren’t that many companies that do exactly what we do. So we’re fortunate that we have the legacy of our track record of projects and the capital partners that we have.”

Reader & Partners is managing two large-scale Triangle developments that were conceived during the middle of the last decade but are only now coming out of the ground.

This month, development began on Bethpage, a master-planned development off Page Road near Research Triangle Park that will include an age-restrictive community for seniors, as well as apartments, office and retail. And later this month, work is scheduled to begin on Holding Village, a 250-acre project in Wake Forest that will include 1,300 homes.

Both projects involve land that was acquired by the American Land Fund, a Pennsylvania-based real estate acquisition fund.

Reader & Partners plays a number of different roles depending on the project. It helps with land acquisition or works to reposition an existing project, develops a master plan for a site, and identifies opportunities for land sales to different developers and joint ventures within a project.

In the case of Bethpage, Reader and its partners sold a portion of the 407-acre site to AV Homes, which is developing Creekside at Bethpage, a community for people 55 and over. Bethpage’s master plan also calls for a million square feet of office space and 150,000 square feet of retail space.

The entire project speaks to the fact that it’s not just millennials who now desire to live close to various amenities.

“People are retiring, and they don’t want to be that isolated,” Reader said.

The project is also the latest example of how the Triangle has become a magnet for retirees.

Creekside at Bethpage will be about 5 miles southwest of Carolina Arbors, a PulteGroup age-restrictive community in Durham that began selling homes last July.

Pulte has already sold more than 185 homes in Carolina Arbors, a spokeswoman said this week. The 434-acre development has room for 1,275 single-family homes and townhouses.

Reader & Partners’ timing with Holding Village may also turn out to be good. The development is next to Heritage, far and away the best-selling residential community in the Triangle in recent years, which is now building its final phase.

Overall, Reader is optimistic about the Triangle housing market. While the lack of available land is now putting some constraints on builders’ activity, he said this region has benefited by avoiding the wide swings in pricing and rampant house-flipping that have afflicted some other markets.

“I think it’s probably one of the healthier in terms of fundamentals,” Reader said. “It’s on its way back, and it’s steady on its way back.”

Bracken: 919-829-4548 or dbracken@newsobserver.com; Twitter: @brackendavid

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