Real Estate drought imapcting St. Johns County developments

[thelakelander]

It appears the real estate drought is having its way on our rapidly growing suburbs, as much as it is impacting downtown highrise development.

THAT'S NOT HOW THEY DREW IT UP

By DEIRDRE CONNER, The Times-Union

Two neighboring mega-developments. Two big-name home builders. Two multimillion-dollar lawsuits.
The spats have a two-mile stretch in northwest St. Johns County buzzing.

Within months of each other, Aberdeen and Durbin Crossing have landed in Circuit Court, asking a judge to force D.R. Horton and Lennar to follow through with contracts to build new homes.

The two suits are unrelated, save for the breakneck growth in northern St. Johns, and the plodding housing market that has publicly-traded builders struggling to dig out from a glut of new units. Is it mere coincidence, or a signal that this rapidly expanding corner of the region is building at an unsustainable pace?

At least two local experts called the lawsuits unusual - even unheard of.

Karen Palmer, president of the St. Johns County Board of Realtors, said she couldn't comment on the specifics of the suits, but said they could be a symptom of the slowdown in sales. During the heady times in the market, "everybody overbuilt and overbought," she said.

Speculation hit new homes - which sprout by the minute in the northwest part of the county - the hardest, Palmer said.

full article: http://www.jacksonville.com/tu-online/stories/072807/bus_187465199.shtml

[Lunican]

D.R. Horton, Inc., America's Builder, Reports Fiscal 2007 Third Quarter Results

FORT WORTH, Texas--(BUSINESS WIRE)--July 26, 2007--D.R. Horton, Inc. (NYSE:DHI), America's Builder, Thursday (July 26, 2007), reported a net loss for its third fiscal quarter ended June 30, 2007 of $823.8 million, or $2.62 per diluted share. The quarterly results included pre-tax charges to cost of sales of $835.8 million for inventory impairments and $16.2 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the same quarter of fiscal 2006 was $292.8 million, or $0.93 per diluted share. Homebuilding revenue for the third quarter of fiscal 2007 totaled $2.5 billion, compared to $3.6 billion in the same quarter of fiscal 2006. Homes closed in the current quarter totaled 9,643, compared to 13,377 homes closed in the year ago quarter.

For the nine months ended June 30, 2007, the Company reported a net loss totaling $662.3 million, or $2.11 per diluted share. The nine-month results included pre-tax charges to cost of sales of $943.9 million for inventory impairments and $66.9 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the nine months ended June 30, 2006 was $955.6 million, or $3.02 per diluted share. Homebuilding revenue for the nine months ended June 30, 2007 totaled $8.0 billion, compared to $10.0 billion for the same period of fiscal 2006. Homes closed in the nine-month period totaled 29,637, compared to 35,838 homes closed in the same period of fiscal 2006.

The Company's sales backlog of homes under contract at June 30, 2007 was 15,801 homes ($4.4 billion), compared to 24,956 homes ($7.4 billion) at June 30, 2006. As previously reported, net sales orders for the third quarter ended June 30, 2007 totaled 8,559 homes ($2.0 billion), compared to 14,316 homes ($3.8 billion) for the same quarter of fiscal 2006. Net sales orders for the first nine months of fiscal 2007 were 27,313 homes ($6.9 billion), compared to 41,550 homes ($11.4 billion) for the same period of fiscal 2006.

Donald R. Horton, Chairman of the Board, said, "Market conditions in the homebuilding industry continue to be challenging as inventory levels of both new and existing homes remain at historically high levels, both as an absolute number and in terms of months' supply. Increased use of sales incentives continues to put pressure on profit margins. In addition, home price appreciation over the past few years, higher interest rates and tightened credit standards in the mortgage industry are all negatively impacting affordability. Even in the midst of this volatile housing market, we produced an operating profit before impairments this quarter and generated positive cash flow from operations for the fourth consecutive quarter.

"We believe that market conditions will continue to be challenging, and our quarter-end impairment evaluations incorporated our more cautious outlook for the industry. For the remainder of fiscal 2007, we will focus on generating cash, reducing inventory balances and paying down outstanding debt to maintain a strong balance sheet."

The Company will host a conference call on Thursday, July 26, 2007 at 10:00 a.m. Eastern Daylight Time. The dial-in number is 800-374-9096, and the call will also be webcast from www.drhorton.com on the "Investor Relations" page.

D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Northeast, Southeast, South Central, Southwest, California and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.

http://www.drhorton.com/corp/RedirectDisclaimer.do?irRedirect=finNewsDef

[Jason]

Maybe this will give the county time to play catch-up as well as time to devise a smarter growth strategy.

[Jason]

Really.  I haven't noticed any activity over there.

Have they started turning dirt again?

[reednavy]

Just beacause it is supposedly moving forward, does not mean anyone ahs signed on yet. Lion's Gate missed the chance to bust out of the gate, and, at best, become something like Shops at Bartram Pak or whatever it's called.

That area does not have enough residential capacity to support any of the grand things they're saying.

[fsu813]

suburban sprawl.......uggg.....

[Jason]

Lion's Gate was new to be anything more than a strip center.  So I wouldn't expect anything grand from it anyways.

The Esplande, however, was to be the next "SJTC" and I'm pretty sure it has been canned completely.

[reednavy]

Lion's Gate was new to be anything more than a strip center.  So I wouldn't expect anything grand from it anyways.

The Esplande, however, was to be the next "SJTC" and I'm pretty sure it has been canned completely.

The Esplanade, that's it.

Even Metro Atlanta, with it's 6+ million people, they don't have another large luxury collection destination other than Phipps Plaza. Lenox Square is like SJTC as an enclosed mall, only with more dept. stores.

Jax Metro is far from needing another center for luxury retail as SJTC has yet to be fully built out, as well as the adjacent M@TC. Work with what already have established before blowing St. Johns County up any further.

I honestly hope this drought for them will kill Rivertown, which is horrible in every sense for what it is doing to that part of S.R 16.

[thelakelander]

I thought Regency was in bad shape.  Any chance in someone working with the Ponce De Leon Mall?  Despite being on St. Augustine's main suburban commercial strip, that place is a ghost town.





I must say, its weird seeing an empty mall that still has its anchor stores (JCPenney & Belk) open.

[Jason]

But look at that hot new lighting!  (a very small project of mine).  The mall is under new ownership and still in the process of a minor facelift.  What you see in the pics is the "new" interior that was extremely budget limited.  Next they should be working on the exterior and parking area.  Despite the renewed attempt to revive the dying mall, I still believe it may be in vain, as-is.  IMO, it need to be totally rebuilt and revamped to be able to compete but that will still be tough with the outlet malls and explosive growth towards the north.  The south end of town is still growing but not at the same rate or demographic.  Add to that, the new EPIC theatre complex will likely pull all of the buisness away from the mall's tiny theatre.  Bealk and Penny's are the only reason that mall is still alive.  If they leave it will surely close its doors.

The building would make a grea indoor flea market.

[British Shoe Company]

Yeah, an indoor flea market, then park of the parking lot could be leased at a lower "booth" rate.  Would you keep your department store in that mall???   I would want to be closer to  I95

[Jason]

I poked around in the mall over the weekend.  The theatre is closed, as well as Kay, and the other jewelry store that was there (Marks & Morgan??).  The entire central core is now empty.

[British Shoe Company]

Any positive news?

[thelakelander]

Is there anything that can be done to save this center or has the fat lady song?  Normally, malls like this decline when the anchors shut down.  In this case, the anchors are still operating.

[St. Auggie]

Any positive news?

The sun came up today, another day for the economy to improve!!