Lennar gains 300 acres from Celebrate Homes

Jennifer Shubinski

Monday, Feb. 14, 2005 | 11 a.m.

North Las Vegas homebuilder Celebrate Homes sold about 300 acres to Lennar in an effort to capitalize the company and allow it to expand outside Las Vegas.

Harry Shull, co-owner of Celebrate Homes with Steven Rosenberg, said the land was in North Las Vegas and was comprised of about 1,225 lots. The sale price was not disclosed.

Lennar is a large homebuilder based in Miami that builds homes under the Lennar and U.S. Home brand in Las Vegas.

Celebrate Homes, which closed escrow on 235 homes in 2004, still has about 3,000 home lots in the Las Vegas Valley.

"It was an opportunity to capitalize our company," Shull said. "We decided to go ahead and take advantage of the opportunity and sell a portion of the property."

The sale will help the company move into markets outside of Las Vegas, such as Pahrump, Mesquite, Logandale and Arizona.

Celebrate Homes is not the only homebuilder looking at Las Vegas' bedroom communities.

Rhodes Homes recently bought thousands of acres in Arizona and numerous homebuilders have plans for subdivisions in Pahrump.

Terry Murphy, a government relations consultant for the development industry, said it is difficult for small homebuilders to compete with today's land prices in Las Vegas.

"For smaller homebuilders, it's very difficult to find parcels of land for a reasonable price that they can build on and achieve a profit at the densities that we are now allowing," she said. "In order to make it worthwhile at $600,000 (an acre) or more, it's difficult for smaller builder to realize a profit and build a quality home, whereas corporate builders can handle the price and can build at the volume they need to achieve a profit."

Celebrate Homes is expected to close escrow in July on about 160 acres of land in Pahrump for 400 homes. Shull also is negotiating for land in Logandale and Mesquite. In Arizona, Shull has plans for 600 units in Wickenburg and another 300 units in Kingman. He said the company also is looking at other areas of Arizona.

"For us and our company it is primarily an affordability factor," Shull said.

When the company started building homes in the early 1990s, it catered to the entry-level buyer with homes ranging in size from 1,200 square feet to 1,800 square feet. Because of land prices, Celebrate Homes now sells a move-up product ranging in size from 2,000 square feet to 3,000 square feet with prices approaching $300,000.

"In these areas we're looking at, we're able to build a more affordable house," Shull said. "That's becoming a little bit of a problem in the state of Nevada."

In Las Vegas, Shull said residential land regularly sells for $400,000 an acre, but in the other markets he is paying $10,000 to $20,000 an acre.

"That is substantially less," he said. "We can build a really nice product (at those land prices) for $150,000 to $200,000; you can't build a house today for under $200,000 in Las Vegas."

Shull hopes to be delivering homes in the outlying marketplaces by 2006.

Marlene Huebert, Realty Executives of Nevada branch manager said local housing prices and the demand for houses is pushing people into other areas.

"Because of the price of land and the lack of inventory we had last year about this time, it drove people into areas where the builder could buy cheaper land and that's what's happening and what they're doing," said Huebert, who has been a real estate agent in Las Vegas for 25 years. "They are going in all directions, Mesquite, Pahrump, Lincoln County."

She said buyers range from people who are willing to commute to Las Vegas, future retirees looking for a home and current retirees.