PEORIA, AZ (October 18, 2024) -- Phoenix Business Journal reports that the State Land Auction was standing room only on Oct. 17 at the Arizona State Land Department. Three groups of homebuilders engaged in a bidding war for 274 acres west of 83rd Avenue between Jomax and Happy Valley roads in Peoria.
When the final bid was secured, 274 acres in the West Valley were acquired for $63 million ($229,927 per acre).
The PulteGroup Inc. (NYSE: PHM) and Tri Pointe Homes Inc. (NYSE: TPH) teamed up to emerge as the winning bidder for the Peoria land.
They outbid the original applicant for the state land — a partnership between Shea Homes and D.R. Horton Inc. (NYSE: DHI).
In documents filed with the Arizona State Land Department, the project was dubbed Aloravita South, near Shea Homes' Aloravita community at the northeast corner of 75th Avenue and Jomax Road in Peoria. In December 2020, Shea Homes was the winning bidder on a 415-acre parcel of state land for 800 homes, where the original Aloravita project was developed.
At the time, Shea Homes was the only bidder for that auction, taking the property for the minimum bid of $46.77 million.
However, a dwindling supply of finished lots across the metro spurred interest among multiple homebuilders for the land by the time this latest auction was scheduled.
A team from Lennar Corp (NYSE: LEN), Taylor Morrison Home Corp (NYSE: TMHC), and Ashton Woods also bid.
Within minutes, the starting bid of $46,275 million quickly ratcheted up. The Lennar/Taylor Morrison/Ashton Woods group aggressively raised the bid by $1 million several times throughout the process, which only requires a minimum bid increase of $100,000.
Once Jon Fisher, vice president of land acquisitions for Shea Homes, bowed out of the race and the price reached $62.5 million, Patrick Brown, vice president of land development for D.R. Horton, raised his paddle for the first time, bidding $62.6 million.
Fisher said D.R. Horton and Shea Homes had an agreement that if Shea Homes stopped bidding, D.R. Horton could continue bidding independently.
Brown bid $62.9 million one more time before Greg Abrams, vice president of land at PulteGroup, ended the bidding at $63 million.