TUCSON, ARIZONA -- As the market adjusts to the recent hit of COVID-19, Sunbelt Holdings continues to press forward on all of its Tucson projects. In a time where homebuilder/master-developer partnerships will become more important than ever, Sunbelt Holdings is well positioned to continue to streamline delivery of lots in its active Tucson communities.
Sunbelt Holdings entered the Tucson market in 2012 with the purchase of La Estancia and has since added to its portfolio to become one of the most active master-planned community developers in the Tucson metro market. Its projects are now well known to the Tucson community along with the homebuilders that partner with them. As Tucson moves through the unprecedented COVID-19 event, Sunbelt Holdings looks to emerge as a driver and lot supplier for Tucson’s homebuilders in three of Tucson's major projects. From NW to SE to SW, Sunbelt Holdings is positioned well in Tucson where large land holdings and infrastructure come at a premium. Part of this is by design, and part of it can be attributed to good timing and an understanding of where Tucson was being underserved. All in all, the company has acquired projects that will allow them to deliver, in the range of, 7,000-10,000 lots to Tucson homebuilders over the next several years. In a market like Tucson that is severely constrained of entitled/infrastructure lots, that seems like a nice spot in which to be.
Real Estate Daily News had an opportunity to speak recently with Bob Bambauer, Executive Vice President of Sunbelt Holdings.
"The world has changed dramatically over the past 45 days as a result of COVID-19, so Sunbelt has taken a step back to carefully look at the way we move our projects forward,” said Bambauer. “We are looking out for adjustments in the market to gauge and assess how we can better accommodate our homebuilder partners and the Tucson community. We are thankful that our projects are substantially underway and our homebuilder partners have a foundation of success to build upon. We are optimistic and plan to continue our momentum as we open our next phases in Tucson."
“Coming out of the last cycle, Sunbelt strategically targeted its Tucson acquisitions around accessible locations and pre-existing infrastructure,” said Will White of Land Advisors Organization, who represents Sunbelt Holdings’ Tucson communities. “This infrastructure is very costly and time consuming to put in from scratch, so in hindsight it has proven to be a smart move and is making it possible to develop and deliver lots in a more efficient and cost- effective manner to homebuilders. Sunbelt tends to see things that others are discounting and have confidence in their team to get things handled.”
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La Estancia – La Estancia is located in the center of Tucson metro area. Accessible along Interstate 10 with two interchange entries, the master plan is home to Meritage Homes, Richmond American Homes and Lennar. La Estancia is located within the award-winning Vail School district and is in very close proximity to Tucson’s major employers, including Raytheon, Davis-Monthan Airforce Base, Amazon, and the Downtown Tucson area. With over 1,000 lots either built on or underway, Sunbelt Holdings is preparing to launch its next phase of approximately 544 lots in late 2020. Although the pandemic has slowed things down slightly, La Estancia has continued a steady sales pace, selling 21 homes in March (April appears to be steady as well) to homebuyers looking at location and value. Builders have also continued to achieve steady price increases as a result of an active homebuyer market.
Star Valley- Earlier in 2020, Sunbelt Holdings partnered with Rick Andreen and Mike Geddes on the re-launching of the successful Star Valley master planned community in Tucson’s southwest submarket. The final phases of Star Valley will include approximately 2,000 lots. An initial phase of lots is currently in escrow with builders and those transactions are scheduled to close in 3rd quarter, with lot construction commencing around the same time. Star Valley opens up a dormant area in the market and gives the homebuilders a nice platform in a region where they have historically been successful.
Red Rock Village- Red Rock Village was purchased by Sunbelt Holdings in 2018 and the developer closed on the initial 91 lots to Richmond American at the end of 2019. Red Rock Village’s draw is its focus on affordability in a highly-amenitized community. The relaunch of this community will benefit from new homebuilders opening and marketing together. The project is a 10-minute drive north of Marana and is conveniently accessed at the Red Rock interchange along I-10. The community has over 850 homes constructed to date and Sunbelt Holdings is eager to continue this momentum with an estimated 2,500 future lots to be developed. In response to market demand, the next offering will be 40’ x 115’ lots that will target the homebuilders’ push towards a smaller, more affordable product. Following up on this, Sunbelt Holdings plans to entitle and deliver hundreds of lots per year moving forward.
"Tucson has some highly-attractive components that we do not see in other markets,” said Bambauer. “It has made strong improvements economically and we entered the market at the right time while it was quiet. We also took notice of the lack of lot inventory and infrastructure to be able to produce the lots needed to meet the market demand going forward. At this point, our communities have a handful of strong builder relationships and partnerships and we are looking forward to being a source for Tucson's builders for a long time,”
“The Tucson homebuilders value being in Sunbelt Holdings’ projects,” White added. “There are good relationships that have been formed over the past 5 years and those are resulting in “win-win” partnerships for Tucson. Sunbelt has done an excellent job of continuing to press forward on their communities. In this new era we are in, homebuilders and developers will need to work even more closely in partnership, and Sunbelt Holdings is positioned well to do that. Their projects have history now and can show pricing power and pace that makes the re-supply process a bit easier for everyone. The homebuilders like that, they have lots on time, and can continue to replenish their supply for the foreseeable future.
As Tucson looks to navigate the current effects of the COVID-19 crisis, homebuilders will most likely look to strengthen their partnerships with the region’s top master-developers. It is clear, from our discussion, that Sunbelt Holdings is prepared for this and sees this time as an opportunity to continue to be proactive with its Tucson projects. In an era that is showing some uncertainty, Sunbelt Holdings is poised to be a sturdy Tucson force.
Sunbelt Holdings has been a recognized leader in real estate development, management and investment throughout the Southwest since 1979. Over the years, the firm has gained an understanding of the area’s unique characteristics that only time and experience can teach. Early projects like the Phoenix Gateway Center remain successful icons. Recent acquisitions of turn-around assets have provided unique opportunities to add value in the Class A office market with the Marina Heights and Hayden Ferry Lakeside projects in Tempe, and the PV|303 industrial project in the West Valley. Sunbelt has also developed some of the Valley’s most beloved residential communities including McDowell Mountain Ranch in Scottsdale, Power Ranch in the East Valley, Vistancia in the Northwest Valley of Phoenix.
