Caliber Completes Sale of South Ridge Land Parcel in Johnstown, Colorado

Rhea-AI Summary

Caliber (CWD) announced the sale of an 80-acre parcel of land in Johnstown, Colo., to Journey Homes for $7.6 million. The sale is expected to generate an unlevered internal rate of return of approximately 22.9 percent for the project. Caliber earned approximately $1.5 million in profit-sharing interests from the sale of the property and fees earned throughout the life of the project. Journey Homes plans to develop 305 single-family home lots on the land, accelerating the development of new housing options in the rapidly growing Northern Colorado area.

Insights

Real Estate Investment Analyst

The sale of the South Ridge property by Caliber to Journey Homes for $7.6 million represents a strategic transaction within the real estate development sector. The internal rate of return (IRR) of approximately 22.9 percent is notably high, considering the typical IRR for real estate investments ranges between 10-15%. This indicates an efficient use of capital and a successful speculative investment in land, which could signal a positive outlook for Caliber's investment strategy and execution capabilities.

Investors should note the rapid turnaround from the purchase in September 2021 to the sale in December 2023, which suggests Caliber's agility in capitalizing on market conditions. The profit-sharing interests and fees totaling approximately $1.5 million further underscore the project's financial success. This transaction may enhance investor confidence in Caliber's future projects and could positively influence the company's stock performance as it reflects the company's ability to generate substantial returns.

Urban Development Expert

The development of 305 single-family home lots by Journey Homes in Johnstown, Colorado, is significant for the local real estate market. Johnstown's rapid growth, as mentioned by Caliber's Chief Development Officer, underscores the demand for housing in the area. The strategic location within the Fort Collins, Loveland and Greeley triangle, along with the planned mixed-use aspects of the community, suggests a potential increase in property values and a boost to the local economy.

For stakeholders, including local residents and businesses, the master-planned community promises new economic activity and opportunities. The inclusion of community parks, commercial, retail, hospitality and industrial space could contribute to job creation and a higher standard of living. However, such large-scale developments may also bring challenges, such as increased traffic and strain on local infrastructure, which must be managed effectively to maintain the area's high quality of life.

Market Analyst

Caliber's decision to reinvest funds from the South Ridge sale into another nearby development, the Encore project, indicates a bullish stance on the Northern Colorado real estate market. This reinvestment strategy might appeal to investors looking for companies with a clear growth trajectory in high-demand areas. The involvement of Caliber Realty and NAI Affinity in brokering the transaction adds a layer of credibility and expertise to the deal.

For the broader real estate market, this transaction may serve as a bellwether for the health of the regional market and could potentially influence trends in real estate investment trusts (REITs) and other related securities. The success of such a transaction could lead to increased investor interest in similar markets experiencing rapid growth and high demand for housing.

Buyer plans to develop 300+ single-family home lots

SCOTTSDALE, Ariz.--(BUSINESS WIRE)-- Caliber (NASDAQ: CWD), a real estate investor, developer, and manager, today announced the sale of South Ridge, an 80-acre parcel of land in Johnstown, Colo., to Journey Homes for $7.6 million. Caliber purchased the land in September 2021 for $5.38 million as part of its Johnstown Development, an approximately 750-acre master-planned, mixed-use development project. The firm launched a single asset debt offering alongside a land loan secured by Guaranty Bank to fund the acquisition and infrastructure development of the land. After fees and other expenses, the sale is expected to generate an unlevered internal rate of return of approximately 22.9 percent for the project. Caliber earned approximately $1.5 million in profit-sharing interests from the sale of the property and fees earned throughout the life of the project.

Located at 2279 South County Road 3 East, in Johnstown, the land sale was completed in December 2023. Journey Homes plans to develop 305 single family home lots on the land, which is situated directly south of Caliber’s Ridge development.

Caliber’s developments in Northern Colorado are situated within the triangle of Fort Collins, Loveland and Greeley at the intersection of I-25 and Freedom Parkway (Highway Road 402). Caliber and its investors currently own approximately 750 acres in the area encompassing six different projects in various stages of the development process. The master-planned community, which has been under development since 2017, will feature multiple new neighborhoods, with approximately 600 new single-family homes and 1,200 multi-family housing units, as well as community parks and commercial, retail, hospitality and industrial space. It is expected to bring significant new economic activity and opportunities to this rapidly growing area.

“Johnstown is one of the fastest growing communities in Colorado, due in part to the high quality of life and a very engaged group of local officials and community leaders,” said Roy Bade, Chief Development Officer of Caliber. “The sale of the South Ridge property will accelerate the development of new housing options to meet the growing need in the Northern Colorado area. This transaction also demonstrates the value of Caliber’s investment platform for investors seeking alternatives in the marketplace. It is a testament both to Caliber’s capabilities and to the promise of the Johnstown Development that many participants in the South Ridge deal have reinvested their funds into Caliber’s Encore development, located near South Ridge.”

Brokers on this transaction were Caliber Realty and NAI Affinity.

About Caliber (CaliberCos Inc.) (NASDAQ: CWD)

With more than $2.9 billion of managed assets, including estimated costs to complete assets under development, Caliber’s 15-year track record of managing and developing real estate is built on a singular goal: make money in all market conditions. Our growth is fueled by our performance and our competitive advantage: we invest in projects, strategies, and geographies that global real estate institutions do not. Integral to our competitive advantage is our in-house shared services group, which offers Caliber greater control over our real estate and visibility to future investment opportunities. There are multiple ways to participate in Caliber’s success: invest in Nasdaq-listed CaliberCos Inc. and/or invest directly in our Private Funds.

Forward-Looking Statements

This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” "will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the final prospectus related to the Company’s public offering filed with the SEC and other reports filed with the SEC thereafter. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130556116/en/

Caliber:

Victoria Rotondo

+1 480-295-7600

Victoria.Rotondo@caliberco.com

Media Relations:

Kelly McAndrew

Financial Profiles

+1 310-622-8239

KMcAndrew@finprofiles.com

Source: Caliber

FAQ

What was the sale price of the 80-acre parcel of land in Johnstown, Colo.?

The sale price of the land was $7.6 million.

What is the expected unlevered internal rate of return for the project?

The sale is expected to generate an unlevered internal rate of return of approximately 22.9 percent for the project.

How many single-family home lots does Journey Homes plan to develop on the land?

Journey Homes plans to develop 305 single-family home lots on the land.

What is the location of the land sold by Caliber in Johnstown, Colo.?

The land is located at 2279 South County Road 3 East, in Johnstown, Colo.

Who will fund the acquisition and infrastructure development of the land?

A single asset debt offering alongside a land loan secured by Guaranty Bank will fund the acquisition and infrastructure development of the land.