July 8, 2011
NVR Forms Joint Venture With Morgan Stanley, Buys 5,600 D.C.-Area Lots
By Josh Nichols
Dallas, TX – Morgan Stanley Real Estate Investing announced it had formed a joint venture with NVR Inc. (NYSE:NVR) and CoastOak Group to acquire approximately 5,600 fully entitled and mostly undeveloped residential lots across nine master planned communities in the Washington, D.C. metropolitan area.
CoastOak Group manages day-to-day operations for the MSREI/NVR venture. According to Ticonderoga Securities analyst Stephen East, the joint venture paid approximately $83.5 million, with most lots in Loudoun County, Virginia. He estimated costs of "$70K to $75K per acre" plus additional development expenses.
John Klopp, MSREI co-CEO, stated: "The purchase provides our partnership with a sizeable portfolio of well-located residential lots in the Washington, D.C. area."
This marked NVR's second significant land acquisition recently. East noted concerns about the shift: "NVR has effectively taken a significant amount of land that they had already optioned with little risk to the balance sheet, and taken ownership of it, thus introducing land risk."