We've been working with quite of few of them to find just the right property.
Irvine, CA (Vocus) September 21, 2009
Land is changing hands in Southern California at a faster pace than anytime in the past three years, according to The Hoffman Company, a land brokerage firm that has closed more than 18 transactions over the past three months, including 10 in the Inland Empire, five in Los Angeles County and one each in Orange, San Diego and Merced counties.
The increase in activity became apparent in June, when The Hoffman Company completed seven transactions, and came to a crescendo in August when its brokers were closing deals at a scorching rate of two per week. By summer's end, the firm reported a total of $45 million worth of property changing hands through its office.
"What this means is an increase in confidence from both the investment and home building sides of the market, a belief that we have hit a bottom in select markets and are beginning to see a rebound in those better locations," said Tom Dallape, co-principal of The Hoffman Company.
The Hoffman Company has noticed another harbinger of change in the market in recent months: Public builders that have been largely absence in the land market since 2006 have suddenly become active players again.
"On one of our deals we received almost a dozen offers from public builders, which meant that almost every publicly traded homebuilder in California put in a bid," said Norman Scheel, co-principal of The Hoffman Company. "Their bids tend to be higher than most private or institutional investors have been offering in the past, and that has tended to bump up the prices. In certain markets, the finished lot values have gone up 15 percent."
The land sellers represented by The Hoffman Company primarily have been banks, investment funds and financial services firms that wanted to dispose of distressed property assets to get them off their books. The firm's current clients include Bank of America, J.P. Morgan Chase, First Private Bank & Trust and AmTrust Bank.
The majority of successful buyers have been investors, although several projects were purchased by both private and public builders that are starting to ramp up their development efforts again.
"Brand new homebuilders are starting up across California and cautiously picking up everything from raw land to finished lots, which is a promising development," said Dallape. "We've been working with quite of few of them to find just the right property."
For example, Trumark Homes, a new home-building company launched earlier this year to take advantage of opportunities in the distressed real estate market, recently purchased 11.84 acres in the heart of Lake Forest for $4.8 million in which The Hoffman Company represented both buyer and seller.
The transactions completed by The Hoffman Company from June through August include five in Riverside County, five in San Bernardino County, five in Los Angeles County and one each in Orange, San Diego and Merced counties.
Almost half of the buyers purchased finished lots, while 23 percent bought raw land. About one-third of the deals included a small number of single family homes, some finished while others had been started but never completed, a common situation in this challenged real estate market.
About The Hoffman Company:
The Hoffman Company has been a leading land brokerage firm in Southern California for the past 30 years. Its brokers have closed more than 1,100 real estate transactions for a total $4 billion since the company's inception in 1978 and have booked an average of more than $500 million annually over the past five years. The Hoffman Company represents land owners of all property types, including residential, multi-family, commercial and industrial sites. For more information, call 949-553-2020 or visit http://www.hoffmanland.com.