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Land sells for a song
| Tuesday, Jul 22 2008 6:21 PM
Last Updated: Wednesday, Jul 23 2008 7:36 AM
Two homebuilders unloaded residential tracts in Bakersfield last month for substantially less than they paid at the height of the boom, county records show.
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The Ennis Homes land
Parcel 1: $2.6 million
March 18, 2005 — Ennis buys the 19-acre Stine/Berkshire parcel from Adavco Inc. Adavco, a Bakersfield company whose president is Annette L. Davis, bought the property for $1.6 million through an agreement penned in September 2004 with the Naderi and Aghamohamadi families.
Parcel 2: $5,614,000
May 17, 2005 — Ennis buys the 38-acre Panama/Old River land from the Antongiovanni family.
Together: $1,457,500
June 26, 2008 — Ennis sells both parcels to a Porterville developer, shaving off more than $6.7 million from what the company paid three years earlier.
The KB Home site
$3.32 million
July 19, 2005 — KB Home buys the 20-acre parcel from from Monarch Affiliates 2 LLC, a now-defunct Chatsworth company managed by Paul Dashevsky, signature pages show.
Monarch had previously bought the land for $1.6 million from the Wetzel and Bratcher families in a deal signed in January 2005.
$765,000
June 18, 2008 — KB sells the site to a Los Angeles developer, taking more than $2.5 million off the price tag.
Source: Kern County Recorder’s office, Californian research
Photos:
Jerry Hendricks of Hendricks Engineering speaks with two other men who would not give their names about plans to develop a plot of land that sits along Comanche Drive and Jade Hills in Bakersfield early Tuesday afternoon.
Vacant land along Comanche Drive and Jade Hills in Bakersfield.
The fire-price sales indicate some developers might be willing or eager to trim portfolios as land value here declines — declines that will be tallied in a matter of weeks, a county assessment official said.
Ennis Homes Inc., a regional builder based in Porterville, sold two southwest parcels for less than $1.5 million, county records show. Ennis bought the land in 2005 in a pair of transactions totaling more than $8.2 million.
KB Home, a national builder headquartered in Los Angeles, sold a northeast parcel for $765,000, records show. The company bought the land for more than $3.3 million in 2005.
It’s at least the third such transaction locally since the market slipped.
Late last year, a subsidiary of San Diego-based Corky McMillin Cos. made a similar sale to local developer Tom Carosella when selling for $2 million a southwest tract McMillin had bought for $9.6 million.
PICKING UP PIECES
“The smartest people I know buy when other people say the roof is caving in,” said Daryl C. Nicholson, the Porterville developer who bought the Ennis properties through a limited liability company, Vic-Nic VI LLC.
One site is a 38-acre parcel at the northeast corner of Panama Lane and Old River Road where approvals for 159 homes are in place.
The other sits on 19 acres at the southeast intersection of Stine Road and the extension of Berkshire Road, where 79 lots are approved.
Nicholson said he plans on a medium-to-long-term hold for the properties, building them out after other projects are worked through in Bakersfield.
“We think the future is definitely strong” for continued growth in the Central Valley, he said.
The sale also included two tracts in Fresno County.
The transaction was complicated because of multiple parcels and banks, he said, adding that tax advantages for the seller meant none of the banks lost money.
“This deal was hopefully a win-win for everybody,” he said.
Representatives from Ennis Homes did not return messages Tuesday seeking comment.
The 84-lot KB Home parcel takes up nearly 20 acres south of Highway 178 and west of Comanche Drive.
The land was bought by 85 Harvest Moon LLC, a subsidiary of Los Angeles-based Global Investment & Development LLC. Global co-manager Aaron Rivani is handling the company’s Bakersfield properties, a receptionist said Tuesday.
Last week, city planning commissioners postponed a request to extend for two years map approvals set to expire soon after neighbors complained of drainage and grading problems at the site. The issue is set to return next month.
KB Home officials did not return calls for comment Tuesday. Rivani could not be reached Tuesday afternoon.
Custom homebuilder Dave Turner, president of David A. Turner Homes Inc. in Bakersfield, said the sales won’t have much immediate impact.
“I suspect you won’t see any effect of this in the marketplace for a few years,” Turner said.
The inventory of so-called production builders — those developing subdivisions rather than custom homes — still has a long way to go before the local market absorbs what’s already out there, he said.
And such low-price sales are normal in a cyclical market, he said.
“People with cash take advantage of the situation,” Turner said.
VALUES DOWN
The county assessor’s office recently warned county administrators to prepare for a reduction of up to $500 million in the current fiscal year’s assessment roll, which lists the value of all taxable properties in Kern County, said Tony Ansolabehere, assistant assessor. The fiscal year started July 1.
The office is currently revaluing raw land and residential subdivisions held mostly by developers, Ansolabehere said. He expects “hundreds and hundreds of millions of dollars” worth of property value to be shaved from the roll in the next few weeks.
Land that fetched up to $200,000 an acre during the peak is worth ... well, it’s hard to figure, he said.
If someone can get $50,000 an acre now, “they’re doing good,” he said.
Some parcels valued at $20,000 an acre before the market run-up could sink back to that pre-boom value, he said.
“Land prices have really fallen,” he said, noting banks have foreclosed on vacant tracts and unfinished subdivisions, bringing down value further.
The office expects to finish in the next couple weeks or so.