Lennar to Buy Back Newhall Ranch Property

Lennar is negotiating with creditors to buy back Newhall Ranch land at a discount from its bankrupt Landsource venture.

Lennar and its Landsource venture are apparently working on a deal with Landsource’s creditors to buy back the Newhall Ranch property just west of Valencia in the Santa Clarita Valley. This deal would create a new company comprised of Lennar and several hundred of its creditors, who would contribute substantial equity to this new venture.

Much of Lennar’s interest in the Landsource venture was sold to CalPERS in February 2007 for $707 million, which included the Newhall Ranch property and others. Landsource then filed for bankruptcy protection later that same year. The current negotiations with the creditors of Landsource would buy back this land at a discount, placing it into a new holding company. Hmmm… sounds like “flipping” to me, but then this deal would make Landsource’s creditors part owners of this new venture as well, thus creating a way for them to recover some of their losses.

The Newhall Ranch development as planned would include 20,885 homes on 12,000 acres, with 9 square miles of land reserved as “natural areas”. The development is planned to be built in stages, or “villages”, through 2025. However, with Lennar’s recent slowdowns on construction of its current developments in Valencia’s West Hills, West Creek and RiverVillage, it’s unclear if the Newhall Ranch development will start construction as originally scheduled or be delayed at least a few more years.

Many Santa Clarita residents have been asking whether the Newhall Ranch development will be built, or if it has been permanently mothballed. The four villages of the Newhall Ranch development (Landmark Village, Mission Village, Homestead Village and Portrero Village) were originally scheduled to be built over a period of about 15 years, with Landmark Village being the first area to be developed and the final development to be completed in 2025. These current negotiations with Lennar and Landsource’s creditors would appear to be placing the Newhall Ranch development back on the calendar. Only time will tell when the actual start date will be though, so don’t hold your breath!