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Pulte snaps up, repositions stalled Avon housing development

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A stalled residential development in Avon is the latest to be scooped up by a builder poised to resurrect a project that failed in the recession.

Persimmon Grove, a 37-acre subdivision near Ronald Reagan Parkway and County Road 200 North, was purchased last month by Michigan-based Pulte Homes.

Pulte is tossing out Persimmon Grove’s old playbook, which called for duplexes aimed at buyers 55 and older. Pulte rezoned the land to allow for single-family homes on larger lots. The resulting 123 home sites will accommodate ranch-style homes starting in the low $100,000 price range.

Construction of the first model home is imminent, said David Compton, vice president of land acquisition for Pulte.

Persimmon Grove’s previous owner, Chicago-based Pasquinelli Homebuilding LLC, went bankrupt last year. It had started marketing Persimmon Cove in 2006, but the duplexes never caught on with buyers. Then the recession hit and Persimmon Grove fell into the hands of lender BMO Harris, which sold it to Pulte. The price wasn’t disclosed.

Failed developments spell opportunity for builders, like Pulte, that survived the housing crash that started in 2007. Roads, sewers and other infrastructure are typically in place and the developments usually sell for a discount.

But the supply of such developments is dwindling, said Jerrod Klein, vice president of sales and marketing for Arbor Homes, a locally based builder.

Klein said that in the last two years Arbor has picked up about 13 struggling developments that it considered turnaround opportunities.

Those include Hilltop Farms in New Whiteland, which it bought a year ago, quickly selling its 40 remaining lots. It had a similar experience with Rosswood, at 21st Street and German Church Road, a subdivision started by the defunct Davis Homes. It sold 40 houses there in a year. And Arbor has almost burned through the 30 lots it got at Greythorne, near Raymond Street and Franklin Road, another Davis Homes project it bought last year.

“We’re actively pursuing more of those opportunities,” but the well-located ones are becoming scarce, Klein said. “Occasionally, one falls into our lap.”

He said that Arbor is starting to have to buy raw land to develop, but starting from scratch is a pricier proposition.

Arbor and other builders are increasing their inventory of lots as the market shows signs of rebounding. Sales are up 13 percent so far this year in the nine-county Indianapolis area.

But the rebound in sales, so far, isn’t enough to exhaust the inventory of lots that were already in the planning stages when the housing market went bust.

That’s why some land brokers don’t expect to see much movement in the market for raw land.

The uptick in housing starts is great news, said Bob Lindgren, the broker for Lee & Associates who represented the seller of Persimmon Grove. “But there’s still a lot of product out there that’s going to need to be absorbed before you see earthmovers carving up cornfields into new subdivisions.”

 

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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