Starwood Land Ventures nearly quadrupled the number of residential lots in its portfolio last year, the Bradenton-based real estate investment firm announced today. Its largest transaction of the year was the $81 million acquisition of bankrupt home builder Tousa Homes, followed by the acquisition of Summerlake Development for $27.9 million. Since 2007, the company, which now has an inventory of 16,000 residential lots, has poured $250 million into residential land investments, and has closed on more than 13,500 lots in the past 15 months. “We have built momentum and will continue to invest in high-reward portfolios,” Starwood’s West Region President, Mike Forsum, said in a statement. TRD

Bankrupt home builder Tousa has closed on the sale of 5,449 residential lots and 36 model homes to Starwood Land Ventures, the Bradenton-based investment arm of Starwood Capital Group, which paid $81 million for the portfolio. Starwood won a January auction for the properties with a stalking horse bid, and won approval from a U.S. Bankruptcy Court late last month. Starwood, which now owns roughly 13,100 home sites in Florida, is calling the investment “the most highly sought-after portfolio of residential real estate in Florida since the economic downturn began.” It plans to start selling its new lots soon and said that it is already talking to home builders about contracts that would allow them to purchase sites and begin construction. Mike Moser, East Region president of Starwood Land Ventures, said in a statement that he expects those deals to close quickly, and that the properties have garnered the interest of nearly all major Florida home builders. TRD

The economic downturn has all but crippled the commercial real estate market, leaving private equity groups and other strategic buyers to begin exploring the advantages of purchasing commercial properties out of bankruptcy.

The opportunities are plentiful, though the market is still
establishing its pricing scale, and few buyers want to tip their hands about how much they would pay. But the bankruptcy filing rate for South Florida businesses increased 28 percent in 2009, according to statistics reported by the U.S. Bankruptcy Court for the Southern District of Florida.

No company wants to file for bankruptcy, but there is a silver lining for strategic buyers, according to Kevin Lamb, a corporate attorney and shareholder at the Gunster law firm in West Palm Beach. Strategic buyers with funds at the ready in mergers and acquisitions, he said, can cherry-pick the company’s real estate assets while leaving the liabilities behind. [more]

The legal tussles surrounding the lengthy, messy bankruptcy of builder Tousa got a bit of clarity last week, when a judge said Starwood Land Ventures could collect a $1.8 million breakup fee if it failed to acquire the Hollywood-based homebuilder. But only a bit, said commercial lenders, who are pondering how the case could affect the business more broadly.

The fee ruling followed an earlier commentary from U.S. Bankruptcy Judge John Olson, who slammed the lending and due diligence practices of Tousa’s syndicate of prominent banks. He said Citigroup, Wells Fargo and Bank of America had committed wrongdoings so egregious as to be called a “fraudulent conveyance,” and ordered that they pay back Tousa’s subsidiaries, whose assets secured the loan, more than $400 million.

Olson’s 182-page ruling, issued in federal court in Fort Lauderdale, is being appealed. Spokespeople for each bank declined to comment, citing the pending appeal.

The rise of Starwood as a likely new owner of Tousa is the ultimate aim. While the breakup fee could serve as a further inducement for Starwood, a Bradenton-based residential real estate investment firm, Olson’s comments make many lenders nervous. The detailed ruling attacks some of their basic lending practices, including the hiring of solvency experts. Tousa declared bankruptcy in January 2008. [more]