This 4,113-square-foot home by Oakwood Homes in Green Valley Ranch is priced at $315,900.
Highlights:
- Oakwood Homes, Colorado?s largest privately owned builder, gets $100 million investment.
- Investment from MREC will allow it to grow, primarily in secondary markets outside of Colorado.
- Pat Hamill, Oakwood?s founder, will remain CEO, chairman and general partner.
Oakwood Homes, the largest privately owned home building company in Colorado, announced on Tuesday that it has received a $100 million investment from Mountain Real Estate Capital, a Charlotte, N.C.-based residential real estate firm.
Last June, Oakwood and MREC, one of the largest real estate investment firms of its kind in the U.S., teamed up to pay $16 million for more than 2,600-acres in the Banning Lewis Ranch in Colorado Springs.
The new partnership will allow Denver-based Oakwood Homes to expand into new markets, as well as grow its Colorado footprint with some of the most sustainable and energy-efficient homes built by a production builder in the U.S.
?Probably most of our acquisitions will be out of state,? said Pat Hamill, the founder of Oakwood Homes, who will remain the chairman, CEO and general partner of the builder.
?We will most be going into tier II markets where there aren?t many publicly traded builders who are active,? Hamill said.
?For example, we recently went into Omaha, Nebraska, where HearthStone Homes, which used to build 1,000 homes a year, went bankrupt, leaving a void,? Hamill said. ?Just today, I was on the phone with two out-of-state builders I have known for years, who are interested in joining our family.?
Hamill said that Oakwood Homes was able to weather the Great Recession better than many other builders that had become over-extended during the go-go days preceding the real estate crash.
?Oakwood has clearly developed a competitive edge in their marketplace and continued to reinvent themselves with superior product and market positions during the downturn,? said Peter Fioretti, chairman and CEO of MREC.
?Together, we will be positioned to now take advantage of the growing market opportunities throughout the Midwest and Western markets,? Fioretti said.
?We are very excited about our opportunity to capitalize on the current housing recovery,? said Bob Sanderman, executive vice president of Oakwood Homes and the company?s point person on the transaction. ?Mountain is a great organization and will assist us in our next chapter of Oakwood?s history.
Hamill said that Oakwood did not need to $100 million because of any financial problems.
?We were already in very good shape financially, with very little debt,? Hamill said. ?With this investment, we will be in an extremely enviable position. We will be one of the financially strongest homebuilders in the country, including publicly traded companies. This transaction really puts us in the top tier as far as our financial position.?
Indeed, while there are no plans at this time, ultimately Oakwood could go public itself.
?I?m not the youngest builder on the street,? said the 51-year-old Hamill.
MREC?s investment, however, doesn?t change Hamill?s ownership position.
?They will get some preference as far as capital returns, but ultimately it is still a 50-50 ownership situation,? Hamill said. He was a 50 percent owner before the investment.
?All major decisions still require an unanimous vote.? Hamill said.
The $100 million investment is by far the largest in the company?s history.
?I think I started Oakwood Homes with $1,500 in 1991,? Hamill said
Hamill said the $100 million could be leveraged many times that amount, if the opportunity arises.
?We are very cautious,? Hamill said. ?Like I said, we have very little debt and we like it that way. We would borrow what we need, but not a penny more.?
Oakwood currently has nine communities with 7,100 home sites. It has a backlog of 348 sold homes and 200 homes under construction. It projects to sell more than 600 homes this year.
In addition to Banning Lewis Ranch, it is a developer of master-planned communities including including Green Valley Ranch, Thompson River Ranch, Belle Creek, Cumberland Green and Stillwater. Oakwood also builds within the Meadows.
All of its homes are extremely green and it will continue to seek cutting edge and cost-effective energy saving features, Hamill said.
?We?re still the only home builder that gives buyers a guarantee on their utility bills.?
He compared buying a new home to buying a new car.
?You wouldn?t buy a new car with hand-cranked windows. People buying a new homes are the same way. The great thing about buying a new home is that you can get an extremely energy-efficient home with very efficient floor plans. We are about 30 days away from opening some new models that will have every gadget you can imagine.?
Interested in buying house from Oakwood Homes? Please visit COhomefinder.com.
Have a story idea or real estate tip? Contact John Rebchook at? JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.
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Source: http://insiderealestatenews.com/2013/03/oakwood-gets-100-million-investment/
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