RSI Communities LLC has begun to ramp up land deals in preparation for a big homebuilding push outside California.
The Newport Beach-based homebuilder—which makes precision-manufactured houses that can be assembled faster and more efficiently than through traditional methods—announced last week it had bought land at a large development in Texas that will support 780 homes.
The deal includes the remaining undeveloped land in Stillwater Ranch, a master-planned development in San Antonio that opened for homebuilding in 2007.
The entire Stillwater Ranch community consists of 830 acres and will hold about 2,300 homes when RSI’s properties and those being put up by other builders are completed.
The purchase marks a big increase in RSI Communities’ land holdings; the company said earlier this year that it controlled about 1,600 lots. It built and sold about 100 homes last year in Southern California and Texas.
Financial terms of the deal, made with Greenwich, Conn.-based private-equity firm Wheelock Street Capital LLC, were not disclosed.
Residential land in San Antonio can cost $4,000 to $50,000 per acre—a fraction of the prices builders now pay for land in Orange County—according to local reports.
The homebuilder operates under the umbrella of RSI Holdings, which is led by Ron Simon, who made a fortune in cabinet making and carried the principles of precision manufacturing applied there to homebuilding. Simon started RSI Communities in 2008 and invested a reported $100 million in the business.
The company has built about 500 homes since its founding, initially targeting smaller infill locations in Southern California for its projects.
The company now is looking to make its mark primarily by building larger for-sale housing developments in growing areas of the country where land is relatively cheap, as well as building single-family rental homes.
The Stillwater Ranch deal provided “a great opportunity for RSI Communities to serve in an anchor position in a flourishing community and give first-time and move-up buyers access to high-quality homes,” said John Bohnen, chief operating officer of RSI Communities, in a statement.
CalAtlantic
Bohnen joined RSI in May after serving as the Austin division president for Irvine-based CalAtlantic Homes.
He’s been assigned the task of growing the company’s Texas operations, a key hub for RSI.
RSI said it plans to have 25 to 30 communities in Central Texas by the end of next year, and that it expects to enter the Houston and Dallas markets within the next year or two.
“Stillwater Ranch will play an important role in our Central Texas growth strategy,” Bohnen said.
The San Antonio development last year ranked No. 10 among Texas subdivisions in terms of sales, with 200 closings, according to housing research firm Metrostudy, a unit of Hanley Wood.
Homes currently being built there range in price from about $200,000 to $450,000.
Wheelock Street bought the land on the northwest side of the city in 2011, after the project had languished for several years following the recession.
Bohnen is the second notable CalAtlantic executive to recently join RSI.
Chief Executive Todd Palmaer, who joined late last year, served for 17 years at Irvine-based Standard Pacific Corp., which became CalAtlantic following its merger last year with Woodland Hills-based Ryland.
RSI plans to deliver 300 homes this year, followed by 800 in 2017 and as many as 1,400 in 2018, Palmaer told trade publication Builder Magazine this year.
The Inland Empire remains an area of focus for the company, and RSI also is looking to expand into Florida and Northern California, he told the publication.
