Here’s a fresh look at motivators, impediments, buyers, and sellers in what’s stacking up to be a robust year for home builder consolidation moves.
By John McManus | Builder
Two months into 2017, two noteworthy acquisitions and one large capital infusion on a land acquisition and development venture in Texas are just hints of a lot of activity we’re hearing about on the deal-flow front. Sounds like things are only just getting warmed up, and that this 12-month period could go down as one of home building M&A’s banner years.
Let’s take a look at why that is.
National Association of Home Builders chief economist Robert Dietz’s latest take on acquisition, development, and construction lending to builders offers a good entry-point in the discussion.
Dietz points out that AD&C lending, the lifeblood of capital to private home builders, has continued to grow, 15 quarters running, through the 4th Quarter of 2016. FDIC-insured institutions upped their ante by $1.2 billion in construction lending activity in Q4 2016, pushing the total value of the stock of loans close to $70 billion. That’s 71% growth over the same benchmark lending levels in 2013, an increase of nearly $30 billion.