Robert Lewis believes a core competency of the Lewis Group of Companies is its ability to work through highly complicated deals.
The company put its competency to work as it meticulously put together a transaction to buy about 800 residential lots in Damonte Ranch, Pioneer Meadows in Sparks and Dayton.
The deal, one of the region's biggest sales of residential property since the downturn began, may be the first of a number of transactions as the land market begins to stir.
Real estate brokers who specialize in sales of land for residential development says property owners many of them banks who took back land in foreclosures are cutting prices to levels that investors find attractive.
The Lewis Group transaction required more than a year of patient work as the seller, LandSource Holding Company LLC, reorganizes under Chapter 11 protection in bankruptcy court in Delaware.
LandSource held about $2 billion in property across the United States when it filed for Chapter 11 protection in mid-2008.
And after devoting months to laying the groundwork for the transaction, The Lewis Group needed to move quickly to assemble the all-cash offer that topped two competitive bids for the properties.
The price wasn't disclosed.
The acquisition includes 34 finished lots in Pioneer Meadows, 102 fully improved and about 100 unimproved lots in Dayton and approximately 575 lots on about 100 acres in Damonte Ranch. The company was among the original developers of Damonte Ranch.
Robert Lewis, president of the Nevada division of the Lewis Group, said the company's financial projections on the acquisition assume that it may not be able to sell lots to homebuilders until 2011.
But once the market recovers, the company believes the properties are well-positioned in ready-to-develop areas.
"We feel good about the northern Nevada markets," Lewis said. "Eventually, the market is going to recover."
And Gigi Chisel, a vice president with Lewis Operating Corp. in Sparks, noted that the residential construction business isn't completely stalled even today.
"There are still homebuilders out there who are still building houses," she said.
Lewis said the privately held Lewis Group continues to scout for other acquisitions in northern Nevada and elsewhere. He said the company has the liquidity, financial relationships and in-house expertise to move aggressively when opportunities surface.
The Lewis Group buys land, moves it through the regulatory process and develops the utilities and other infrastructure that allow homebuilders to begin construction.
The company is best known in the region as a homebuilder, but it got out of the construction business after selling its Lewis Homes operation to KB Home in 1999. Since then, it has focused on land development along with multi-family office and retail projects such as the 508,000-square-foot Damonte Ranch Town Center anchored by RC Willey.
Mark Krueger, a senior vice president with the commercial real estate company Grubb & Ellis|NCG, said the 800-lot acquisition by the Lewis Group is particularly significant because the market for residential land has been stalled for so long.
But he said more transactions are in the pipeline.
"We finally have seen banks and some appraisers who understand where the market is," Krueger said.
Brokers said earlier this year that sellers of residential land set unrealistically high selling prices, often because they were unwilling to swallow a big loss after prices collapsed.
They're more realistic today, said Aaron West-Guillen, a land specialist with NAI Alliance.
"We're telling those guys, 'We're sorry, but this going to hurt,'" he said.
Potential buyers of residential land remain fearful that a further slump in home prices could erode the value of land even more.
To protect themselves, buyers are moving only when they see what West-Guillen called "a smoking deal."
