Lennar takes niche housing route
A lack of developable land in Miami-Dade County and a post-recession economy is forcing home builders such as Lennar to take a niche approach.
That includes newly designed homes for parents living with their adult children; acquiring foreclosed or financially distressed lands; and demolishing existing buildings to create space for new housing, according to Frank Fernandez, director of sales and marketing for Miami-based Lennar Homes.
“Either you adapt or you die,” Mr. Fernandez said in an interview last week with Miami Today about the current realities of homebuilding in Miami-Dade.
An example of that is Landmark at Doral, where Lennar is hosting a grand opening this week. In 2011, several companies associated with the aborted project filed for Chapter 11 bankruptcy protection after AmTrust Bank sought to foreclose on the property. Lennar bought the Landmark site in 2012 for a reported $44.65 million.
Now billed as Doral’s newest “Cosmo-Chic” community, Landmark is planned to have 800 two- and three-floor townhomes, with rooftop terraces among other features. The two-floor units are priced roughly from $441,000 to $541,000 and the three-floor units are priced roughly from $560,000 to $605,000, Mr. Fernandez said.
“It’s an extremely modern design,” he added.
Some of the units at Landmark are part of Lennar’s “Next Gen” line – homes designed for a growing segment of the post-recession economy: parents living with their adult children.
“These are older parents with children who have graduated from school, who may not have a job and are not yet independent,” Mr. Fernandez said.
“Next Gen” units have two separate, but attached living areas – one for the parents and one for the children – each with its own entrance, bedroom, bathroom and living area; and, in some cases, each with its own kitchen and garage.
Lennar also is developing “Next Gen” homes in other locations around Miami-Dade.
“It’s taking off big time,” he said.
Lennar – one of the nation’s largest homebuilders – typically delivers communities from 500 to 700 homes up to those with 4,000 to 5,000 homes. However, those larger projects are virtually impossible in densely developed Miami-Dade and Broward counties.
“There’s a tremendous scarcity of land,” said Mr. Fernandez, who has been with the company 26 years.
For Lennar’s Southeast Florida division, which covers the tri-county area, the most available land is in Palm Beach County.
“We’ve made some land purchases there in recent years,” he added.
In Miami-Dade, Lennar often looks for smaller tracts to develop – some for as few as 40 to 60 homes. And the company tries to offer a product that may be lacking in the areas surrounding those locales.
Doral has been one of the company’s focal points in Miami-Dade, where upscale “higher margin” developments play a large role in the company’s business plan. In addition to Landmark, Lennar has been developing Grand Bay, a master planned community platted for 2,000-plus homes of different types.
According to Mr. Fernandez, single-family homes at Grand Bay on 40-foot wide lots are priced roughly between $481,000 and $561,000 and those on 50-foot wide lots are priced roughly between $542,000 and $720,000.
Townhouses at Grand Bay are priced roughly between $359,000 and $386,000, while condos there are between $260,000 and $311,000.
Earlier Lennar projects in Doral include Doral Isles, Sonoma Townhomes at Doral and Doral Landings.
In Kendall, the company has been developing Kendall Square, a master-planned community of more than 1,000 homes west of Kendall Drive and “about as far as you can go west” within the county’s development boundary, Mr. Fernandez said.
“It’s a traditional neighborhood development,” he added. “It has garages in the back of homes… It feels like an old town.”
Elsewhere, Lennar has been developing Civil Palms: more than 1,000 units of single-family homes and townhouses in South Dade.
In Homestead, Lennar is developing two master planned communities – Oasis and Vineyards – with 1,100 to 1,200 homes each, Mr. Fernandez said.
A big issue for land availability has been the so-far-unsuccessful push to expand Miami-Dade’s development boundary to the west – opposed by environmentalists and others concerned about protecting the Everglades.
While Lennar supports efforts to expand the boundary, Mr. Fernandez said he knows of no particular proposal by the company to do so.
“It’s the next frontier,” he added. “I think it will eventually happen.”
Meanwhile, Lennar and other builders are forced to operate within current land constraints. Since housing markets collapsed a few years ago, Lennar has been on the lookout for land that’s been foreclosed upon, often to be had at discounts.
Yet even that is becoming more challenging, Mr. Fernandez said, now that land prices are on the rise and more developers are looking to get back into the market.
Lennar also looks for “fill-ins,” he said, where already developed land can be bought at the right price and existing buildings can be demolished to make way for new homes.
“If we run out of land,” he added, “we can knock down something and build something up.”