Home construction a hot property
PLUS: Builders are relatively giddy. The NAHB/Wells Fargo Housing Market Index — which gauges developer sentiment — hit a seven-year high for June.
The national index came in at 52 this month, up from May’s 44 — and crossed the magic 50 mark that delineates a good outlook vs. a bad one. It’s the first time above 50 since 2006.
Regionally, the west came in at 50 — up from 41 in May. But that’s still the second lowest reading of the year for a west region that by this math has been ahead of the developer optimism curve in 2013.
PLUS: Lowe’s wants to bet bigger on California. The big home improvement retailer wants to buy at least 60 Orchard Supply stores as the smaller chain enters bankruptcy.
Lowe’s, which has roughly 110 big-box locations in the state, offered $205 million for California-centric Orchard Supply and its key debts. The bid faces bankruptcy court review.
Orchard, a troubled spinoff from retail giant Sears, operates much smaller stores than Lowe’s, which is known for its large-scale warehouses that compete nationwide with Home Depot. Lowe’s plans to keep the Orchard format and run the stores as a distinct business unit.
“The acquisition will provide us with immediate access to Orchard’s high density, prime locations in attractive markets in California, where Lowe’s is currently underpenetrated, and will enable us to participate in a larger way in California’s economic recovery,” says Lowe’s CEO Robert Niblock.
EQUALS: Orange County builders and Wall Street, a budding love story? New Home Co. of Aliso Viejo is the latest local homebuilder who wants to join the stock market’s recent fascination with a rapidly improving housing market.
New Home was founded in 2009 by a group of veteran Orange County builders who’ve already invested $12 million of their own money in the company. The builder – which will concentrate on key California markets — has sold nearly 400 homes, including the high-profile Lambert Ranch project in Irvine.
In a Securities and Exchange Commission filing, New Home said its wants to raise roughly $172 million in a future stock sale. The company hopes to join recently public Orange County competitors William Lyon Homes of Newport Beach, which sold $218 million in stock last month, and Tri-Pointe Homes of Irvine, which raised $268 million in January.
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