Harbor Custom Development, Inc. Contracts to Acquire 106 Lots for $16,900,000 Expanding Austin Metro Housing Footprint

Rhea-AI Summary

Harbor Custom Development has contracted to acquire 106 developed single-family lots for $16.9 million in the Summit Rock Golf Course community, Horseshoe Bay, Texas. The company plans to build 4- and 5-bedroom homes priced from $800,000 to $1.2 million, starting in Q3 2021. This acquisition aims to strengthen its presence in the Austin metro market, leveraging the ongoing urban flight and rising demand for upscale housing. The growth in Horseshoe Bay aligns with the company's strategy to provide accessible housing near Austin.

Positive

• Acquisition of 106 lots strengthens market presence in the Austin metro area.
• Potential for significant revenue growth with home prices ranging from $800,000 to $1.2 million.
• Fits well into the strategy focusing on upscale housing demand due to urban migration.

Negative

• Acquisition cost of $16.9 million may impact short-term cash flow.
• Market conditions could affect the anticipated demand for new homes.

Gig Harbor, Washington , April 21, 2021 (GLOBE NEWSWIRE) -- Harbor Custom Development, Inc. (“Harbor,” “Harbor Custom Homes®,” or the “Company”), (NASDAQ:HCDI), an innovative and market leading real estate company involved in all aspects of the land development cycle, today announced that it has contracted to acquire 106 developed single family lots for $16,900,000 in the Summit Rock Golf Course community in Horseshoe Bay, Texas, located approximately 53 miles west of Austin.   

Harbor Custom Homes® anticipates commencing construction of 4- and 5-bedroom homes on lots ranging from 0.25 to 1.50 acres and expected to be priced from $800,000 to $1,200,000 in the Summit Rock Golf Course community beginning in the third quarter of 2021.  Summit Rock has been featured as one of Golfweek’s Top 100 courses in the U.S. (https://hsbresortrealty.com/resort_development/summit-rock/) Home buyers in Summit Rock will have the opportunity for membership at the Horseshoe Bay Resort providing access to resort facilities including: three golf courses, multiple club houses, yacht club, lake facilities, and access to a private jet center with a 6,000 foot lighted runway (clubhsbresort.com). Horseshoe Bay has seen rapid growth as a result of Austin’s expanding employment base and the subsequent migration of households to the Lake and Hill Country regions.

“We have made a significant commitment to grow our business model in the Austin metro marketplace and the acquisition of the 106 Summit Rock Golf Course community lots in Horseshoe Bay, combined with our current inventory, provides a solid foundation for the future. Acquisition of the Horseshoe Bay area lots is a natural progression of our strategy to be a commutable distance to Austin while providing upscale housing in the scenic Lake and Hill Country regions.  Urban flight from Austin combined with decreasing inventory in the bedroom and rural communities like Horseshoe Bay offer a great opportunity for our company,” stated Sterling Griffin, President and CEO of Harbor Custom Homes®.

About Harbor Custom Development, Inc.

Harbor Custom Development, Inc. is a real estate development company involved in all aspects of the land development cycle including land acquisition, entitlements, construction of project infrastructure, home building, marketing, sales, and management of various residential projects in Western Washington’s Puget Sound region; Sacramento, California; and Austin, Texas. Harbor has active or recently sold-out residential communities in Gig Harbor, Bremerton, Silverdale, Bainbridge Island, and Allyn in the state of Washington. In addition, Harbor has acquired land and will begin constructing homes in two new markets beginning in the second quarter of 2021. In the Sacramento metro market, Harbor will be constructing homes in completed subdivisions in both Rocklin and Auburn, California. In the Austin metro market, Harbor has acquired developed lot inventory in Dripping Springs, Driftwood, and Horseshoe Bay, Texas. Harbor Custom Development’s business strategy is to acquire and develop land strategically, based on an understanding of population growth patterns, entitlement restrictions, infrastructure development, and geo-economic forces.  Harbor focuses on real estate within target markets with convenient access to metropolitan areas that are generally characterized by diverse economic and employment bases and increasing populations.  For more information on Harbor Custom Development, Inc., please visit www.harborcustomdev.com.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of the federal securities laws.  Words such as “may,” “might,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements.  These forward-looking statements are based upon current estimates and assumptions.  While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release.  These forward-looking statements are subject to various risks and uncertainties, including without limitation those set forth in the Company’s filings with the Securities and Exchange Commission.  Thus, actual results could be materially different.  The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

FAQ

What is the acquisition announced by HCDI about?

HCDI has contracted to acquire 106 developed lots for $16.9 million in Horseshoe Bay, Texas.

When does HCDI plan to begin construction on the new homes?

Construction is expected to commence in Q3 2021.

What is the expected price range of homes in the Summit Rock community?

Homes are expected to be priced between $800,000 and $1.2 million.

How does this acquisition impact HCDI's strategy?

It enhances HCDI's footprint in the Austin metro area, targeting growing demand for upscale housing.

What are the potential risks associated with HCDI's lot acquisition?

The acquisition cost may strain cash flow, and market conditions may affect demand for new homes.