Appraisers Looking at LandMar Properties. Does this signal a possible sale?
They might just be preparing to restate assets but, in today’s tumultuous market, anything can happen.
Palm Coast, Florida – September 7, 2008 – From the rumor mill: Something’s going on at LandMar, one of Palm Coast, Florida’s largest residential real estate developers. An Orlando-based appraisal company was recently evaluating some of LandMar’s local holdings; Grand Haven, Grand Landings, and Grand Woods. I’m told that some folks (one person described them as bankers) were looking (and taking pictures) at LandMar’s golf course properties, particularly the three courses making up The Grand Club.
What could this all mean? Well it could simply mean that LandMar wants to know what their holdings are worth so that their value can be accurately reflected on their balance sheet. It could mean that a lender (current or potential) has requested a revaluation. It could also mean that they are preparing to sell the assets.
Real estate developers are faced with declining property values just as we all are. And just as some homeowners leveraged the increasing home value with equity loans, so did some developers. Just as some of us paid inflated prices for property at the peak of the market, so did some developers. Remember the large block of Palm Coast lots SeaGate purchased from Masterpiece Homes (story) not too many months ago? Masterpiece paid about $65 thousand each for lots now selling in the low $20 thousand range.
Some companies, like Levitt and Sons and WCI Communities were forced to seek protection in bankruptcy. Bobby Ginn is in the midst of negotiations with lenders of a $675 million credit facility currently in default (story). Others like locally grown SeaGate Homes did not allow themselves to get overextended, leaving them in a great position to take advantage of opportunities at the bottom of the market. And newly created "vulture" funds are entering the market with lots of fresh money to do the same.
Where does LandMar fit into this spectrum? Back when their parent company, Crescent Resources, was wholly owned by Duke Energy, they would likely be counted among those having the resources to not only survive the downturn but to capitalize on it. But things have changed. Duke had to divest a controlling interest in Crescent (story). The result was a joint venture with the Morgan Stanley Real Estate Fund. Wall Street bankers are less patient than utility companies. They have a "what have you done for me lately" attitude towards assets.
Other facts help stir the pot:
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Ed Burr, founder of LandMar has founded GreenPointe Holdings, a new real estate development firm with fresh money (story).
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Burr has been closely associated with MG Orender, who heads Hampton Golf. Hampton Golf manages the Grand Haven Golf Course and The Grand Club. Hampton also has an ownership interest in The Grand Club.
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Ed Burr tried to buy back controlling interest in LandMar but was rebuffed (story).
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Jim Cullis, the manager of LandMar’s local operations has not returned my phone calls.
Speculation: Could a combination of Ed Burr and MG Orender buy the four golf courses? Could Ed Burr’s new firm be interested in LandMar’s properties? Could another purchaser be in the wings? Or is LandMar just assessing their assets to bring their balance sheet into alignment with current values?
LandMar and Crescent Resources’ local holdings include:
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Some lots and the golf course in Grand Haven
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Several acres of commercial property along Colbert Lane
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Acreage on both sides of Roberts Road north of SR 100, originally planned for a residential community
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Grand Landings, a development south of the Flagler County Airport
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Grand Woods, acreage north of the Matanzas Golf Course planned for residential development as part of Palm Coast Park
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The Grand Club; three golf courses – Pines Course, Cypress Course, and Matanzas Course (presently closed)
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Acreage in the western end of Flagler County planned for a river club community
Rumor: (noun) A current story or statement without confirmation or certainty as to facts
About time
It is about time they did something. Maybe it’s a renegotiaton of debt or maybe they are selling. I hope they sell. The only way Matanzas Woods golf course will be redeveloped and opened is for Landmar to step aside. I hope they do so very soon. It’s one of the better courses in the area and it does nothing for the surrounding community to have it sit closed. If they are just sizing up their assets to decide on a move (build or sell), let’s hope they make that decision soon.
Smoke and Mirrors
Approximately 8 or 9 months ago I met with Travis Norman, executive VP of Hampton Golf. At that meeting he told me all the money needed to renovate MMatznzas was in place and that renovations would begin in December.
Given the track record of Hampton Golf and Landmar I was skeptical and now that we are nearing the supposed date of reconstruction I am even more skeptical.
I have come to the conclusion that Hampton Golf and Landmar are not forthright but thay are masters of the smoke and mirror philosophy.
The sooner each of them divest themselves of involvement in our golf courses, the better.
Smoke & Mirrors
AMEN Gene! Well put.
See ya! Down the middle — Golf I