Rich Knowland, the former head of Lennar Corp.’s Orange County operations, has traded in his name tag at the area’s largest homebuilder for a leading role at a land development company.
Knowland, who left Miami-based Lennar earlier this month, now is a partner at Pacific Terra Holdings LLC, a new operation based in Seal Beach. The company plans to move to Irvine in the next few months.
Pacific Terra will be looking to buy land, either outright or through a partnership, to zone for larger scale, masterplanned communities. It’s a business model similar to that of Irvine-based SunCal Cos.
A more entrepreneurial position “was something I had been looking to do for a long time, a decade or more. But I never had the opportunity. Things finally fell into place,” Knowland said.
Pacific Terra has two other partners, Anthony Trella and Randy Wheeler.
Trella is the owner and president of Meranth Co., a Deerfield Beach, Fla.-based real estate development and investment advisory company.
Wheeler formerly was the president of Valencia Co., a division of Newhall Land and Farming Co., now part of Lennar. He also worked for Newport Beach’s William Lyon Homes Inc. in the early ’90s.
Backing Pacific Terra is an unnamed New York-based venture capital partner, which raises money primarily from wealthy investors.
Knowland has had plenty of experience in working on big masterplanned projects, with Lennar’s Great Park and Central Park West projects in Irvine and Platinum Triangle in Anaheim. The builder plans more than 15,000 homes in OC in the next decade or so.
Pacific Terra’s focus is smaller, and comes without the overhead of being a public company.
“I’ll be able to really focus on the business of building, and land entitlement, and less administrative work,” Knowland said. “But now when I get a computer, I’ll have to hook it up myself.”
Pacific Terra plans to focus on California. Knowland said he hopes to buy land that will support upward of 4,000 homes by year’s end. The company is eyeing a few deals right now, but nothing has been finalized.
The timing of the venture,when most national homebuilders the company hopes to do business with are cutting back on their land holdings because of slow sales,actually should suit Pacific Terra, he said.
“Many of the builders are no longer buying land,” he said. “Our plan is to get the land ready for when the (pickup in buying) starts again.”
When that turnaround happens remains to be seen. Knowland’s old company is one of the few national builders still pushing ahead with big masterplanned developments here, in Anaheim, Irvine and Tustin.
Lennar has yet to name a replacement for Knowland. The homebuilder runs its day-to day-operations out of its Aliso Viejo office under Chief Operating Officer Jon Jaffe and Chief Investment Officer Emile Haddad.
Other builders have been backing away from major projects. Earlier this month, Dallas-based Centex Corp. withdrew from the partnership that’s developing the largest part of Tustin’s former Marine base.
Two units of Walnut-based J.F. Shea Co. as well as the city of Tustin remain partners in the development, which calls for 2,100 homes and 6.7 million square feet of offices, restaurants, shops and hotels to be built at Tustin Legacy over the next six to eight years.
Those plans still are on schedule, according to Tustin Mayor Lou Bone.
Last week, officials at Irvine-based Standard Pacific Corp. reiterated a strategy that most other builders also now are embracing: a focus on cash flow and balance sheets and not growth.
Southern California new home orders were off 14% for Standard Pacific in the first quarter, compared to a year ago. That said, coastal areas of the state remain relatively strong, said Chief Financial Officer Andrew Parnes, at a San Francisco homebuilders conference.
