Meritage Homes adds 74 P&E lots in Entrada Del Rio at Rancho Sahuarita

Rancho Sahuarita is a popular area for homebuilders

SAHUARITA, ARIZONA – As reported last month, the first phases of Entrada Del Rio subdivision in the Master Planned Community of Rancho Sahuarita has all its lots either sold or under contract. Meritage Homes of Arizona recently bought 74 P&E lots here for $976,800 ($13,200 per lot). Meritage will finish the lots.

Demand for new homes is being driven by historically low mortgage interest rates, a shortage of used homes for sale, and an increased need for homes that can accommodate entire families working from home more than ever before. Many of those families are choosing safe suburban communities rather than crowded urban centers and many often prefer to purchase a home virtually rather than physically.

That is exactly what Meritage offers. 100% of its communities are open for both in-person and virtual sales, and its virtual selling capabilities have been very beneficial. More than half of its communities are designed for the entry-level market with a wide selection of affordable homes ready for quick move-in, while its streamlined design selection process in Studio M allows first move-up customers to move quickly into a new home.

Steven J. Hilton, chairman and chief executive officer of Meritage Homes is quoted in a recent written quarterly statement saying: “The entire Meritage organization is executing at a high level to drive powerful earnings growth. Our second quarter net earnings increased 78% through the combination of a 20% increase in home closing revenue, our highest gross margin in six years of 21.4% and our fourth consecutive quarter of improving overhead leverage — to just 10.3% of home closing revenue.”

“As a result, we ended the quarter with the strongest balance sheet we’ve ever had, including almost a half billion dollars in cash and the lowest net debt-to-capital ratio in our history, which gives us the flexibility to continue to grow and expand market share while also providing a healthy cushion in the event that conditions weaken,” Hilton added.

Entrada Del Rio will comprise over 500 new homes in Rancho Sahuarita when complete, with ease of access in and out of the community, close proximity to local schools, and the Parque Del Rio neighborhood amenities and the Rancho Sahuarita Marketplace nearby and a wide selection of affordable homes.

More information about the line of Meritage Homes available in Entrada Del Rio can be found online

For more information on Entrada Del Rio at Rancho Sahuarita, Diana Dessy, Director of Land Assets for Rancho Sahuarita Management Company can be reached at 520.275.7235.

To learn more, see RED Comp #8043.

Tucson Trading Activity High for Dollar Stores

TUCSON, ARIZONA – A California investor, Cheynne Properties, LLC purchased the Dollar General at 5697 South Alvernon Way in Tucson for $1,530,000 ($164 PSF) from San Miguel Investments, LLC of Colorado (Fred & Judy Ingelhart).

BJ Feller, Jake Hamilton and Pat Weibel with the Stan Johnson Company of Chicago handled this transaction for the seller. The buyer was self-represented.

Dollar stores have represented an important niche within the net lease sector this year, as they were considered essential retailers during the COVID-19 pandemic. Investors, especially those in 1031 exchanges below $2.5 million, pursued dollar store assets over other net lease options as dollar stores were open for business, experienced high sales volumes and had financing available.

“1031 investors with lower absolute dollar amount exchanges continue to flock to this sector,” Feller told us. “Net lease investment these days is a tale of two worlds. Those assets that people don’t want and those they do want, such as dollar store properties that offer long-term leases to investment-grade tenants and higher cap rates compared to the overall net lease market.”

“Other net lease properties in high demand these days are gas / convenience stores, grocery stores, medical related tenants, and to a lesser degree, quick service restaurants,” Feller said.

Increased demand for this dollar store sector is the primary contributing factor for the decrease in cap rates. Furthermore, the median remaining lease term for available properties during the second quarter increased by one year to approximately 11 years.

As dollar store retailers continue to perform in all types of economic environments, investors of all classes will continue to seek out these investments.

A recent poll conducted by The Boulder Group illustrated the majority of net lease participants (62 percent) expect dollar store transactions to increase in the last two quarters of 2020 when compared to 2019. New construction dollar stores will remain in the highest demand, and the national expansion plans of the dollar store retailers will keep supply up regardless of their heightened demand.

Cap rates for Dollar General, Family Dollar and Dollar Tree compressed by 15, 10 and 7 basis points, respectively; to a reported 6.98 percent in the second quarter of 2020 when compared to the second quarter of 2019.

For more information, Feller should be reached at 312.240.0194.

To learn more, see RED Comp #8046.

Mattamy adds more lots at Dove Mountain

MARANA, ARIZONA — Mattamy Homes closed on 38 finished lots lots in the Dove Mountain MPC for $4,123,000 ($108,500 per finished lot).  Mattamy has been active in the Dove Mountain master-plan for several years.  The seller was Cottonwood Properties, Inc (David Mehl, President).

The lots were 70’X130′ and are located contiguous to Mattamy’s Blue Agave II community in the northwest portion of the project. This thoughtfully designed gated community offers 364 homesites while still maintaining a comfortable, neighborly feel. Here, single-story homes are strategically designed to optimize family living space and enjoy spectacular mountain views of the Sonoran Desert.

Just beyond the Dove Mountain community, residents can enjoy over 60-miles of hiking and biking trails, luscious parks, incredible desert golf clubs, shopping and entertainment, as well as excellent schools such as the new STEM school, with grades K-8. A new park also opened this year in Blue Agave, offering families a shaded play structure and a ramada perfect for picnics and enjoying quality time together.

This transaction closed September 3, 2020 and was handled by Will White and John Carroll of Land Advisors Organization in Tucson.

For additional information, White and Carroll should be reached at 520.514.7454.