Five Point Holdings LLC (NYSE: FPH) said it closed on an 84-acre land sale at Great Park Neighborhoods in Irvine last quarter, recognizing $357.8 million in revenue from the deal.
The transaction is the largest homesite sale for the Irvine-based developer in several years.
The company sold 798 homesites as part of the sale, a big boost for the master developer, which sold just 61 homesites to builders in 2022 due to rising interest rates and other headwinds in the residential real estate market.
The latest deal works out to a price of nearly $4.3 million an acre, and $450,000 per home lot.
“We’re seeing strong homebuilder interest in acquiring homesites at Great Park,” CEO Dan Hedigan said during a conference call with analysts this month.
The pickup in homesite sales follows a pickup in builder sales at Great Park Neighborhoods, according to Hedigan.
“The open builder neighborhoods at the Great Park continue to sell homes with strong increase in sales in the first half this year compared to second half of 2022,” Hedigan said, noting builders sold 177 homes during the second quarter.
The latest round of homesite sales were largely for District 5 South, the next planned community at Great Park Neighborhoods. That community holds 770 home sites.
During the first quarter, FivePoint said it was also marketing the remaining 81 home sites in Rise, a 700-home project that first opened in 2020.
Solis Park is the newest community at Great Park Neighborhoods; the 849-home project opened in July 2022, and has just 200 homes remaining to be sold.
Longtime partner Lennar Corp. (NYSE: LEN) appears to have snapped up a large portion of the land to build new homes for the latest phase of development at the master-planned community, with property records indicating the firm closed on a large transaction in the neighborhoods in May.
Other prominent builders in the community over the years include New Home Co., Tri Pointe Homes Inc. and Taylor Morrison Corp.
FivePoint said it has also recently entered escrow for the sale of another 82 homesites and is negotiating the sale of an additional 104 home sites, with the close anticipated in early 2024.
Since starting housing development on the project in 2013, FivePoint has sold more than 8,000 homesites in total. It has entitlements for 10,500 homesites, alongside commercial development.
The recent round of homesite sales is the largest for FivePoint since 2021, when it sold 887 total homesites.
“On top of the ongoing residential opportunities at Great Park, we continue to market and sell our commercial land, including the industrial land offerings that we brought to market in August last year as well as other commercial-oriented uses,” Hedigan said on the July 20 call with analysts.
FivePoint made one of its largest commercial dispositions early this year with the sale of 42 acres of vacant land to TGS Management LLC for $240 million; plans for the site have yet to be revealed.
The deal with TGS represents more than one-fifth of the total land available for commercial development in the Great Park Neighborhoods, the FivePoint-controlled land that largely surrounds the city-run Great Park.