Oakwood Homes is busy rebuilding momentum in Banning Lewis Ranch.
The Denver-based company bought the 2,600-acre housing development in northeast Colorado Springs from Key Bank in May. Key Bank was one of 28 creditors listed as beneficiaries of a bankruptcy auction in June 2011. The bank loaned the former owners, California-based Banning Lewis Management Company, $65 million.
“The biggest thing Oakwood brings is a local presence,” said Oakwood Regional President Mike Tinlin. “We have our finger on the pulse of the market, and we know what buyers in Colorado are asking for.”
The changes so far are subtle but noteworthy. Oakwood signed new contracts with builders and widened the development’s offerings and price range.
Builders were selling homes to buyers in the $250,000 price range, but Oakwood now is offering entry-level houses in the $180,000 to $230,000 range and larger homes that cost about $500,000.
“We have communities where people buy multiple homes,” said Oakwood CEO Pat Hamill. “The family grows, the kids move out, people downsize. But they stay in the community.”
Oakwood was drawn to Banning Lewis because it’s the same kind of master-planned community thatit’s developing at Green Valley Ranch east of Denver.
Master-planned communities offer amenity packages, neighborhood schools and a self-contained community that, Hamill said, tends to hold its value.
Banning Lewis is built around a “ranch house” with a swimming pool, kids splash park, workout facility and kitchen. It also has an extensive trail system, Tinlin said.
Most of the facility, however, is set up as a sales center.
Tinlin said Oakwood will start construction on the center after the Parade of Homes Aug. 3-19, planning to make it more of an amenity with a larger workout room, demonstration kitchen and community areas rather than a sales center.
Banning Lewis is a Parade of Homes hub site and is hosting the VIP kickoff party for the Colorado Springs Housing and Builders Association’s annual event.
Oakwood is concentrating on building out Village 1, Tinlin said. It will likely contain about 1,000 homes when it’s finished. It’s just the first of seven planned villages and a town center filled with retail and commercial development.
“It would be a great problem to have if we could burn through the rest of those lots by this time next year,” Tinlin said.
Hamill said he fully expects to run out of lots in Village 1 by next summer.
During 2011, 96 homes sold in the development for a total of about 350 since the neighborhood broke ground in 2006. Those 96 home sales were pretty impressive, given that the development was tied up in bankruptcy, Tinlin said.
“Realtors weren’t quite sure how to talk about the property when they didn’t know what was going to happen to it,” Tinlin said.
Oakwood seeks to improve marketing options to the project simply by taking it out of the real estate-owned realm.
“We’ve been reaching out to Realtors to let them know we’re here, we’re an established Colorado company and we believe in quality,” Tinlin said.
While Key Bank ended up with the 2,600 acres already plotted for residential development after the bankruptcy auction in June 2011, Ultra Petroleum bought the remaining 18,000 acres for $20 million at the bankruptcy auction with plans to pursue drilling rights on it if and when city lifts a moratorium on the practice.
That sale made headlines throughout the second half of 2011.
Hamill said Oakwood considered a name change for the housing development, but homeowners were opposed.
“Ultimately, the Banning Lewis Ranch brand will most likely be the community itself,” Hamill said. “I’m not sure we’ll hear much more about the other operation because I don’t think they’ll be marketing to retail customers.”
While there is still work to do on Village 1, Oakwood is looking ahead to the next phase of development in Village 2.
“We don’t want to be playing catch-up with the market,” Tinlin said.
Village 2 is where the developer can really look to make its mark. All of the Village 1 lots were already developed and ready to sell. But they were designed by a California developer for denser development than most Colorado neighborhoods.
Tinlin said he isn’t sure whether the lot sizes will be larger in Village 2, but he said Oakwood will pay attention to market demand and that larger lot sizes might be added to the agenda.