Ma­jor land in­vest­ment firm buys sub­di­vi­sions

The Covington News - - FRONT PAGE - GABRIEL KHOULI gkhouli@cov­

Three par­tially de­vel­oped sub­di­vi­sions, in­clud­ing Dorch­ester Place in the heart of Cov­ing­ton, were pur­chased in 2013 by The Dra­pac Group, an Aus­tralian land in­vest­ment and de­vel­op­ment com­pany look­ing for good buys in the At­lanta mar­ket.

Dra­pac USA, the com­pany’s Amer­i­can arm, has been ag­gres­sively pur­chas­ing prop­er­ties in a hand­ful of ma­jor Amer­i­can mar­kets such as At­lanta, in­clud­ing the Dorch­ester Place sub­di­vi­sion in Cov­ing­ton (off Cony­ers Street) and the Mag­no­lia Park (Cov­ing­ton By­pass Road) and Bai­ley Glynn (Brown Bridge Road) sub­di­vi­sions in un­in­cor­po­rated Newton County. Why Newton?

Jeremy Quinn, Dra­pac USA’s di­rec­tor of prop­erty, said the com­pany be­gan in­vest­ing in At­lanta in 2011 be­cause of the city’s prior hous­ing de­mand.

“We’re look­ing for ar­eas that have his­tor­i­cally good de­mand, where peo­ple have been build­ing homes go­ing back to the boom years of 2005-2006 and even prior to that, 2000 and 2001. We look at where peo­ple are liv­ing and mov­ing to and we came to Cov­ing­ton,” Quinn said Fri­day.

“One of the other fac­tors is we look for places with com­mu­nity spirit and char­ac­ter, which ob­vi­ously Cov­ing­ton has plenty of. We’re try­ing to match ar­eas where peo­ple have lived be­fore and where peo­ple will want to live.”

The com­pany is also tar­get­ing land in the Char­lotte, N.C., Chicago, Los An­ge­les, Or­lando and Phoenix

mar­kets, but its heav­i­est in­vest­ment has come in At­lanta, where the com­pany cur­rently owns 17 de­vel­op­ments sur­round­ing At­lanta.

Ac­cord­ing to its web­site, the com­pany plans to man­age and de­velop its land in­vest­ments pri­mar­ily with the goal of sell­ing them to na­tional home builders and de­vel­op­ers. Dra­pac sees land as a par­tic­u­larly low- risk in­vest­ment as the U. S. hous­ing mar­ket re­cov­ers from its 2008 col­lapse. The com­pany be­lieves “the ex­ist­ing con­di­tions of the US mar­ket mir­ror that of the Aus­tralian prop­erty mar­ket in the early 1990’s.”

Dorch­ester Place

The com­pany’s big­gest pur­chase, Dorch­ester Place, is also the only one where the deeds have yet to be recorded, mean­ing there is no eas­ily pub­licly avail­able in­for­ma­tion on the to­tal amount of land pur­chased and the pur­chase price.

How­ever, ac­cord­ing to data on the Mul­ti­ple List­ing Ser­vice, 108 of the de­vel­op­ment’s 128 to­tal lots were sold for $ 8,518 apiece, lower than the ask­ing price of $ 14,200 apiece. Dra­pac’s web­site said the com­pany pur­chased the sub­di­vi­sion in July.

At those num­bers, the to­tal pur­chase was $ 919,944. Lots range from just more than a tenth of an acre to half an acre in size.

Dorch­ester only has eight ac­tual homes, with the rest va­cant lots.

The sub­di­vi­sion has roads and util­i­ties in­stalled through­out and is ready for more home build­ing. Hamil­ton State Bank, which ac­quired The First State Bank’s as­sets, owned most of the lots in Dorch­ester, which is lo­cated off Cony­ers Street, next to Academy Springs Park.

“( Dorch­ester is a com­mu­nity built in the heart of the city, a com­mu­nity within a com­mu­nity. It’s got so much char­ac­ter and is well- de­signed with great homes in there. As soon as you drive in there, you have a good feel­ing, and we have no doubt peo­ple will want to live there as the mar­ket re­cov­ers,” Quinn said, not­ing Dra­pac will look to main­tain the de­vel­op­ment’s in­tegrity and even­tu­ally sell lots to builders.

Bai­ley Glynn and Mag­no­lia Park

Lo­cated off Brown Bridge Road, just east of the new Wal­mart at the Salem Road in­ter­sec­tion, Bai­ley Glynn is a par­tially built out sub­di­vi­sion with a 37.71- acre un­fin­ished phase.

Dra­pac pur­chased the un­fin­ished phase and 22 de­vel­oped lots in the first phase, off Hal­ibut Cir­cle, for a to­tal of $ 710,000.

Mag­no­lia Park is a 26.48- acre de­vel­op­ment off the Cov­ing­ton By­pass Road, east of Flat Shoals Road, which Dra­pac pur­chased in March for $ 126,000.

The de­vel­op­ment has all the roads and util­i­ties in­stalled, and Quinn said he ex­pected Dra­pac will work to im­prove the sub­di­vi­sion lay­out and even­tu­ally work with a builder to put homes on the ground.

Mov­ing for­ward

Quinn said Dra­pac is still adding land to its port­fo­lio and hasn’t yet started adding value, or de­vel­op­ing, the land. He said Dra­pac is still ac­tively buy­ing prop­er­ties in At­lanta and will con­tinue to look at Newton County.

Quinn said the com­pany is look­ing to quickly off­load lots to make a profit, but plans to in­vest in its land as­sets over time.

As far as home build­ing, Quinn said it re­mains slow in Newton County, but he said there’s a lot more ac­tiv­ity in Henry County, which would bode well in the near fu­ture for Newton.

“It’s slowly pick­ing up, but we’re see­ing the first signs of de­vel­op­ment,” Quinn said.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.