Lennar Makes a Big Move in West Cary

Strength is building in the Triangle’s new homes market, and one of the nation’s busiest home builders is spending an eye-popping $8.5 million on 90 acres of wooded acreage in west Cary. Lennar Corporation paid top dollar for the Roscoe Fryar land on Green Hope School Road. There, Lennar hopes to expand on the sales success of its neighboring communities.

The company moved forward with the purchase even after the Cary Town Council denied a rezoning request in March that would have allowed the developer to increase the lot total from 305 to 350, increasing the potential profit margin for the property. In addition, Lennar will undertake the expense of developing the raw land. They have hired the fee developer JPM South Development of Raleigh as a consultant.

Assessing the Real Property Value

Trish Hanchette, Lennar’s Raleigh division president, says the land is worth the cost. With this premier location and neighbors, the project still works at 300 homes, she says. We’re all having to look hard and dig deeper for the next best spot.

John Myers, president of JPM South Development, says many home builders in the Triangle are beginning to look for potential community sites for 2014 and 2015. The concern is where are the quality lots going to come from he says. It used to be that residential developers could easily access bank financing to purchase and develop raw land into new home lots and then sell the finished lots to home builders, who would build and sell the individual units to home buyers.

It’s very different world than it was a few years ago, says Myers, a veteran of the Triangle’s developer market. Because of a lot shortage, many home builder groups such as Lennar, Pulte Homes and Ashton Woods, have resorted to developing their own lots in new communities around the Triangle in order to keep a steady inventory of new homes. Ashton Woods Executive Vice President Hampton Pitts says he still likes to buy finished lots when he can find them in premier locations, like the more than 70 remaining home sites at Ramblewood near North Hills that Ashton Woods bought late June for $5.5 million. But when he can’t find the lots, Pitts says Ashton Woods is willing to develop the community.

A Growing Number of Nearby Communities

Ashton Woods currently has four communities that are, or will be self-developed, including the 227-unit Pemberley community that’s open in April. Pitt says his group is also developing a new phase of homes at GlenLake in west Raleigh called GlenLake Gardens, along with a 13 acre luxury home community called Gray’s Landing off Lead Mine Road in north Raleigh, and seven acres with 69 townhouses adjacent to Davis Park in Durham County. It’s a healthy sign that we’ve corrected the issue of oversupply Pitts says. There’s a demand for quality new houses.

On the Fryar site in Cary, Lennar is planning up to 305 single-family homes and townhomes that will range in price from $180,000 to more than $400,000. The project will be alongside a new phase of Highcroft that Pulte Homes is planning to build out. Hanchette hopes to time the opening of the Fryar community to coincide with the sell-out of Lennar’s Inside Wade community off Edwards Mill Road in west Raleigh. Inside Wade, she says, has far exceeded all of the company’s sales projections. The construction started in early summer 2011 on the first phase of 175 homes and has nearly sold out, and 20 homes have been sold in phase two.

It’s a horrible problem to have, but also a blessing, Hanchette says. With Fryar, we want to time it so it’s right behind Wade so there’s no misstep in sales or delivery.

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