A Pennsylvania-based homebuilder who jumped into the Valley market in late 2005 has pulled up stakes and left the state - scrapping plans for a 267-home subdivision in Gilbert.
The move was part of a larger plan by Orleans Homebuilders to cut costs and free up cash to pay off debt by selling 1,400 home lots in five states, including Florida and Illinois.
Publicly-traded builders have been selling off thousands of acres of land across the Valley in recent months to help improve balance sheets and pacify stockholders in the wake of the housing crash.
And out-of-town builders and investors have been snapping up the properties at bargain-basement prices.
"Although we believe in the Arizona market over the longer term, in the near term given our small position there, we felt it was appropriate to dispose of this property," Orleans Chairman and CEO Jeffrey Orleans said in a statement.
Located near Ray and Higley roads, the builder's Gilbert project, called Tolimae, was its first and only community planned for Arizona. Orleans has already built two model homes and four speculative homes at the subdivision, located in the larger Lyon's Gate master-planned community.
An investment group that includes two Phoenix investors and a Chicago partner bought up the property - roughly 80 acres - at the end of 2007, said Casey Christensen, a sales associate with land brokerage Nathan & Associates. The firm is currently negotiating a sale of the property to a new homebuilder, Christensen said.
Roughly a dozen out-of-town builders like Orleans have flocked to the Valley in the past 18 months to capitalize on cheap land prices and gain a foothold in the market.
Many of them had plans to build multiple subdivisions but have pulled back to just one or two, said Ben Sage, director of research firm Metrostudy's Arizona division.
"That has been a smart move," Sage said.
Investment groups have also converged on the Valley to buy land, sometimes at 40 cents on the dollar, Sage said.
Many of the deals are taking place in Pinal County and other outlying areas.
Last fall, Scottsdale-based The Wolff Co. and Gilbert's Langley Properties bought up more than 6,800 acres of land from national homebuilder D.R. Horton for $70 million. The partnership announced at the time plans to invest up to $500 million in land deals in Arizona and other Western states over the next two years.
Sage said there's probably 10 to 20 investment groups looking for land in the Valley. Most will hold onto properties for two to five years before reselling, he said.
"There is a lot of shopping for land going on right now," he said.