Phoenix area – Gehan Homes of Dallas, Tex. (Tim Gehan, pres.), one of the Valley’s newest home builders, is ramping up its operations and has acquired land for 232 residences in four subdivisions. In its most recent deal, Gehan Homes of Arizona LLC in Scottsdale (Mark Moskal, operations mgr.) paid $3.913 million to purchase 43 finished lots within the Palm Valley community in Goodyear. The seller was PV5&8 LLC, a company formed by Southwest Value Partners in San Diego, Calif. (Robert Sarver, Mark Schlossberg, partners). The cash sale was brokered by Nate Nathan, Dave Mullard and Casey Christensen of Nathan & Associates Inc. in Scottsdale. The Palm Valley subdivision is at the northwest corner of McDowell Road and Pebble Creek Parkway. The lots average 9,100 (70×130). The builder intends to build homes ranging from 2,400 sq. ft. to 3,200 sq. ft. Models expected to open third quarter. Pricing yet to be set. Gehan Homes is buying 72 finished lots within The Bridges at Gilbert community located just east of the southeast corner of Queen Creek and Higley roads in Gilbert. The seller in that rolling option deal is JEN Arizona 10 LLC, a venture formed by JEN Partners in New York City, N.Y. (Reuben Leibowitz, principal) and Terra West Management Co. LLC in Phoenix (Mike Jesberger, principal). At year-end, the venture paid $6.804 million to buy the finished lots. The seller was a company formed by Wells Fargo Bank.
Elliot Pollack says, “What is going on here is symptomatic of what’s going on in the Greater Phoenix home building industry in general. Simply put, there is a shortage of finished tract builder subdivisions (stores in builder lingo). During the prolonged bust, homebuilders allowed the number of stores to contract at a rapid rate. Now that things have picked up, they are having trouble keeping up with demand given the 80% or so decline in stores. They are scrambling for new subdivisions in order to meet the demand. Matters are made worst by the fact tat 60%-65% of current “stores” will be built out within a year. Look for more reports like the one I am commenting on. Any new builder will want to open several stores. Those builders in the market will continue to scramble for new stores. Finally, it’s good to be a land owner of land with water and sewer solutions again.”
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