GreenAd Press Release

New homes buck trend in

dismal South Florida market

Monterra, a new, single-family-home community, is going up on the largest undeveloped tract of land in Broward.

BY INA PAIVA CORDLE

Even though South Florida home prices are still dismal and foreclosures are expected to take years to sell off, two high-profile developers are taking a chance on building a 1,600-home community in Cooper City.

Monterra will be the first large-scale, single-family project launched in Broward County since the housing downturn and recession began. A company whose parent is now in bankruptcy originally owned the site and built several dozen homes before construction ground to a halt.

Despite the anemic economy, partners Armando Codina and Jim Carr are betting consumers are ready to buy a brand-new home they say will be comparable in price per square foot with short sales and foreclosures. Prices will range from the low $200,000s to more than $400,000.

Construction on the first model homes began last week, and Monterra's sales office opens Friday. The 500-acre community will be built over the next several years on the largest undeveloped tract of land in the county.

The partners say sales in the area are starting to inch up, and the timing is right.

``I think we have come to the intersection where a new home price and a foreclosed price are meeting,'' said Codina, chairman of CC Devco Homes, a 2-year-old development company he and Carr founded. ``And that is to me a watershed point and the reason I feel comfortable.''

Price will be key to Monterra's performance, analysts say.

`A CHANCE'

``If they are going to compete with short sales, then they've got a chance,'' said real-estate analyst David Dabby, president of the Dabby Group in Coral Gables.

``There is so little new construction that whatever demand there is they'll get it.''

Overall, the average sales price of a home in Broward has fallen more than 50 percent since the peak in 2006, Dabby said. Foreclosures are expected to continue and will take years to be absorbed, he said. But, Dabby said, prices started to bottom out last year and are stabilizing.

The partners concede that real estate remains depressed. To make Monterra feasible, Codina and Carr say they downscaled the project, made it less dense and waited a year after buying the land.

Formerly the site of the Waldrep Dairy farm, Monterra is bordered by University Drive, Pine Island Road, Sheridan Street and Stirling Road.

Carr and Codina bought the land for more than $50 million from the bankruptcy of Hollywood home builder Tousa. They also bought outstanding bonds and a mortgage, which added up to $167 million of debt on the failed project.

Engle Homes, a unit of Tousa, had already laid the roads and much of the infrastructure for a planned community that was to have included condominiums and multifamily units. But the parent company became a victim of the recession and filed for Chapter 11 bankruptcy in January 2008.

Tousa still owns 87 lots, known as Estada, originally part of Monterra, across Pine Island Road from the new project.

``Between Doral and Coral Springs, this is the only new single-family home community,'' said Carr, chief executive of CC Devco Homes.

New communities have been built in South Dade since the recession but sales have been sluggish and some projects stand nearly empty.

It's an open question whether other developers will follow Codina and Carr's lead.

``The only builders that are having any success in the Florida marketplace are those that have bought land cheap and have downsized their product line to be competitive with foreclosure and short sale prices,'' said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach. ``Other builders that have not adapted to this marketplace are fishing and golfing, waiting it out for the market to come back, and there is no way to know how long that will be.''

Data for most of 2009, compiled American Realty Consultants, show that 261 homes sold in Cooper City, with an average sales price of $349,387, or $140 per square foot.

Monterra's pricing will average $135 per square foot. Prices will range from the low to mid-$200,000s for 1,100 to 1,600-square-foot courtyard homes built by Minto Communities, which is buying land from CC Devco; to $270,000 and up for 1,700 to 2,400-square-foot homes.

At $330,000 and up, buyers can purchase 2,100 to 3,200-square-foot homes. Larger homes with up to 4,000 square feet are planned for a later phase.

Making their prices even more competitive, the partners say, is that foreclosed homes are often distressed properties requiring work and investment, and buyers may need home equity lines, which are hard to get.

SHINY AND NEW

Their new homes will come with granite countertops, wood cabinets and new stainless-steel appliances as standard features.

The first model home won't be ready for more than three months, but pilasters already line the roads where royal palms will be planted. On a recent workday, landscapers were laying sod around the new sales office and earthmovers were filling in the lake borders. The first buyers can expect to move in in mid-2010.

For Codina and Carr, Monterra's location was a major draw. Considered ``infill'' housing, it is on land that is already surrounded by development in a family-oriented suburban area with easy access to shopping.

Monterra is the first construction project for CC Devco, which also has acquired property in Miramar and Jacksonville. Carr's expertise is in home building while Codina has been a successful commercial developer. Neighborhood shopping centers with grocery, drugstore and other retail space are also planned for Monterra. When completed, Carr expects the total investment in the project to be $500 million to $600 million.

Both partners have a long history in South Florida development. Carr, 58, founded home builder Westbrooke Cos. in 1976 and sold it to Standard Pacific Corp. of Irvine, Calif. in 2002.

Codina, 62, founded the predecessor of the Codina Group in 1980 and served as chairman until 2006 when he merged it with Florida East Coast Industries. He then became chairman of Flagler Development, part of FECI, and remained in that position after FECI was sold to Fortress Investment Group in 2007. Codina also serves as chairman of the private family enterprise Codina Partners.

``These particular developers/builders are very savvy,'' McCabe said.

How hungry home buyers will be, amid an economy scarred by high unemployment, remains a big question. But the partners, who were friends before they became business associates, say they can be patient.

``It will be interesting to see how strong the demand is,'' McCabe said. ``But without a doubt, the developers/builders have correctly targeted their product and price range for today's competitive marketplace.''

Location:Cooper City. More than 500 acres, bordered by University Drive, Pine Island Road, Sheridan Street and Stirling Road.

Homes: About 1,600 when completed, ranging in price from low $200,000s to more than $400,000.

Commercial component:Grocery, drug store and other retail space, eventually.

Developer:CC Devco Homes, owned by Armando Codina and Jim Carr.

Total investment:$500 million to $600 million.

Construction:First model home will be ready in about 3 months; first homeowners could move in mid-2010.

Website:Monterrafl.com.