Argosy Invests in Grand Park
On September 28, 2011, Argosy Real Estate made a controlling equity investment in Grand Park, an 80-acre partially entitled residential land parcel in Ontario, San Bernardino County, in the southwest Inland Empire of California. Argosy has partnered with Distinguished Homes, an experienced local land developer and homebuilder who will serve as operating partner. Distinguished will manage completion of the design and entitlement process for the project. Distinguished is also a minority co-investor.
Grand Park will be entitled for 311 residential lots with lot sizes ranging from 3,000 to 5,000 square feet, with planned home sizes ranging from 1,600 to 3,000 square feet and averaging approximately 2,200 square feet. The project also incorporates approximately 32 acres for park and school uses, as specified by the Master Plan. Located in the heart of the eastern phase of the New Model Colony, which will eventually have a total of 8,500 single-family homes and 3,100 multi-family units, Grand Park will benefit from the growing infrastructure around it. Due to its location, Grand Park is expected to be developed ahead of many other projects within New Model Colony, making it a prime property for a homebuilder.
Argosy anticipates exiting the project through a sale of fully entitled paper lots to one or more homebuilders. Nine major production homebuilders (including eight publicly traded builders) are currently active in a total of 23 subdivisions within 5 miles of Grand Park, indicating the strong local demand for lots. Homes on the site are expected to sell for an average of $347,000, or approximately $156 per square foot. This average home price in the project would result in total annual housing costs equal to 32% of local median household income, satisfying a key affordability metric and ensuring strong demand at the projected exit land valuation.