FivePoint Communities Inc. can safely join the ranks of Orange County’s billion-dollar companies in terms of its valuation.
The Aliso Viejo-based developer’s holdings at Great Park Neighborhoods in Irvine alone also would make the list, according to a recent financial report by its main investor.
Privately held FivePoint, which oversees residential and commercial development on the former El Toro Marine base, this May completed a restructuring deal that combined its ownership in the Irvine project with three others it oversees in California under a single entity.
The deal, in the works for nearly a year, was designed to give FivePoint and its investors unified ownership of a portion of the Irvine development with other large projects the company already managed: Newhall Ranch in Los Angeles County, along with Candlestick Point and the Shipyard in San Francisco.
The four mixed-use communities will combine for nearly 40,000 homes and 20 million square feet of commercial space when they are built out.
Specific financial details of the May restructuring deal were not immediately disclosed, other than a mention that Miami-based homebuilder Lennar Corp. was the largest shareholder in the restructured FivePoint, and that FivePoint Chief Executive Emile Haddad was the fourth-largest shareholder in the company.
FivePoint was spun off from Lennar in 2009; and Haddad previously served as Lennar’s chief investment officer.
Lennar’s latest quarterly report, released this month, sheds a little more light on its investment in FivePoint, and other financial aspects of the Orange County-based company.
Lennar’s financial report said that the restructured FivePoint is now worth a little more than $1.1 billion and that the builder’s stake in FivePoint is about $255 million.
Big JV
It’s the largest unconsolidated joint venture that Lennar has on its books, according to the earnings report.
FivePoint had only about $65 million of debt tied to it at the time of the report, according to Lennar, which noted that the valuation of FivePoint is likely to change “when additional information is obtained once this new entity completes its accounting for the business combination.”
Heritage Fields El Toro, the ownership group of the 3,700-acre Great Park Neighborhoods land site, remains a separate—and extremely valuable—joint venture from FivePoint, based on a reading of Lennar’s financials.
The Heritage Fields land venture—which will hold some 9,500 homes, plus close to 5 million square feet of commercial space—now carries a valuation of $1.5 billion, and Lennar holds a $146 million investment in it.
Lennar reported having a $274 million investment in Heritage Fields El Toro as of November, when it valued the Irvine venture at $1.4 billion.
Prior investors in the Great Park Neighborhoods ownership group, including Michael Dell’s MSD Capital and a number of institutional investment funds, remain involved in the Irvine project through the Heritage Fields entity but are not part of the larger, restructured FivePoint.
Like FivePoint itself, the Irvine project is essentially debt free. Heritage Fields had less than $10 million in debt tied to it at the end of May, according to Lennar.
Lennar has one other notable Orange County-based joint venture on its books: Heritage Hills, a planned 840-home development in Irvine that was once expected to be part of Great Park Neighborhoods but now is a separate venture between Lennar and Horsham, Pa.-based Toll Brothers.
The Lennar-Toll venture’s 272-acre project has a value of $487 million at the end of May, up from $478 million six months ago, according to Lennar.
The two builders received $320 million in seller financing from Heritage Fields El Toro to finance a portion of the land acquisition.
