JV Buys $213M Master-Planned Community

Estrella. Image courtesy of Harvard Investments, Toll Brothers and Varde Partners

Two massive master-planned communities in Arizona have traded hands within days for more than $800 million, with the latest transaction made by a joint venture of Harvard Investments, Toll Brothers and Värde Partners. The companies have acquired Estrella in Goodyear, Ariz., for a reported $212.5 million.

NNP III – Estrella Mountain Ranch LLC, was the seller and Newland/Brookfield was the managing developer of Estrella, a 20,000-acre mixed-use, master-planned community located about 17 miles west of Phoenix. The community is currently home to more than 7,000 families and has more than 18,000 acres of remaining developable land.

The assets acquired include current and future home sites, multifamily and commercial parcels, a Nicklaus Design golf course at the Golf Club of Estrella and developer-owned facilities. Amenities include two clubhouses, resort-style pools and a waterpark, 72 acres of lakes, more than 50 miles of paths and trails and the Yacht Club of Estrella.

The joint venture partners did not disclose the amount paid for Estrella but the Phoenix Business Journal reported the price was $212.5 million, making it one of the largest acquisitions of an active-master planned community in Arizona to date and the second largest transaction in the West Valley within the past week.

The Howard Hughes Corp. announced Oct. 19 it had purchased the 37,000-acre Douglas Ranch in Buckeye, Ariz., for approximately $600 million from JDM Partners and El Dorado Holdings. Both companies will remain as joint venture partners with HHC on Trillium, the 3,000-acre first Douglas Ranch village. Douglas Ranch will eventually have about 100,000 homes and 55 million square feet of commercial space.

Growing Estrella

Estrella will continue to actively develop new neighborhoods for a variety of builders, with additional parcels expected to come online in the near term. Toll Brothers, the nation’s largest builder of luxury homes, is one of the builders already active in Estrella. Toll Brothers announced in March that it is developing Beacon in Estrella, which will feature five designs of single-level and two-story homes ranging in size from 1,672 square feet to 2,612 square feet.

Bob Flaherty, group president for Toll Brothers, said in a prepared statement the company looks forward to being part of the development team as well as an active builder in Estrella.

Toll Brothers has been active with other joint ventures and acquisitions in recent months. In August, Toll Brothers and Equity Residential announced plans to develop nearly $1.9 billion new rental communities in six key U.S. markets over the next three years through a strategic partnership. Also in August, Toll Brothers acquired StoryBook Homes, a privately-held homebuilder in Las Vegas that currently has five active selling communities and owns or controls more than 550 lots.

At Estrella, future planning includes the continuation of the Lucero and Montecito villages, as well as immediate planning for new villages east of Estrella Parkway. With the active home buyer market, the goal is to increase the variety of new home offerings, the number of builders and add more Estrella neighborhoods. Tim Brislin, vice president of Harvard Investments, said in prepared remarks the intention is to build on Estrella’s foundation of excellent planning and continue its reputation as a best-in-class master-planned community. Cadence at Gateway, a 400-acre master-planned development in Mesa, Ariz., owned by Harvard Investments, a real estate investment and development company, and GTIS, is among its holdings.

Brendan Bosman, managing director at Värde Partners, a leading global alternative investment fund with U.S. offices in Minneapolis and New York, said Värde believes Estrella offers a compelling opportunity to meet the strong demand for housing in a major Sunbelt market that also complements its existing portfolio of master-planned communities. Previous investments in master-planned communities include Daybreak in South Jordan, Utah; Windsong Ranch in Prosper, Texas; Vistancia in Peoria, Ariz.; Verde River in Scottsdale; and Sunfield in Buda, Texas.