Deposits and Costs Coincident to Acquisition of Land for Development |
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| Deposits and Costs Coincident to Acquisition of Land for Development | 3- Deposits and Costs Coincident to Acquisition of Land for Development
Deposits and costs coincident to acquisition of land for development are summarized as follows:
Properties currently owned and either improved or under construction
Berkeley Terrace – Bayville, NJ – 70 approved townhome units
The Company has been in title to this property since 2021 and finalized an infrastructure and construction finance facility which closed on 3/31/23. This facility included refinancing the land debt, securing funding for a large portion of the site construction, as well as funding the first building of 10 townhomes. The amount of the facility is $4,670,000.
The Company began infrastructure work on the property in June of 2023, with land clearing completed and the site stabilized for soils erosion control. Sanitary sewer, water and drainage has been installed on the entire property.
All building pads have been compacted and completed.
Base paving has been completed and the entire site has been fully improved.
The Company has entered into an agreement with a national builder to deliver improved building sites for this project. It is in the Company’s opinion that the financial advantages inherent in the sale of a portion of the improved lots in this development outweigh the advantages of building and selling or leasing the entire development.
The Company sold two 10-unit building pad sites in 2024. A national builder began vertical construction of Building 8 began in December of 2023, and Building 1 began in July of 2024.
As of September 30, 2024, 20 improved building pads had closed title to the national builder.
The remaining buildable lots will close during 2025 and Q1 of 2026.
Subsequent event: Building Pad 6, comprised of 8 improved building pads, was sold and closed title on 1/24/25. At that time all underlying debt for this property was retired. 42 improved building pads are scheduled to close in the next 12 months.
Lacey Township, New Jersey, “Lacey Pines”
Dream Homes currently owns a parcel approved for 68 new townhomes in Ocean County NJ, of which 54 are market rate and 14 are affordable housing. The Company acquired this property on June 29, 2021 and is currently in title.
This property has received final approvals, Department of Transportation approval, CAFRA approval, MUA, County, Fire and other outside agency approvals.
Preliminary approval was granted in 2021 and final approval in 2023.
The Company has secured permanent funding to install infrastructure and vertical construction for this project in October of 2023 and retired the previous debt.
Site bonds, escrows and fees have been posted for the property, with clearing having started in the 4th quarter of 2023.
The site improvements and infrastructure work for this development began in March of 2024 and was substantially completed in the 3rd quarter of 2024.
As of 12/31/24, the property has been cleared, top soil removed, earth balance completed, sanitary sewer installed, water mains and laterals installed, on and off-site curb installed and base paving completed.
The Company has entered into an agreement with a national builder to deliver improved building sites for this project. It is in the Company’s opinion that the financial advantages inherent in the sale of a portion of the improved lots in this development outweigh the advantages of building and selling or leasing the entire development.
Subsequent event: Building Pad 1, comprised of 6 improved building pads, was sold and closed title on 1/24/25. 48 improved building pads are scheduled to close in the next 12 months.
Louis Avenue – Bayville, NJ – 17 townhome units
The Company was heard before the Berkeley Township Planning Board on October 3, 2020 and the planning board awarded preliminary approvals for 17 townhome units.
The Company acquired this property on August 4, 2021.
The Company received Final approvals on August 8, 2022.
As of this date the Company is pursuing various options for the development of this property, including Build to Lease, sale of the approved parcel to another builder/developer, or sale of the improved parcel to a national builder.
Autumn Run – Gloucester County – 62 age-restricted manufactured housing units
On December 7, 2018, the Company signed a contract to purchase a property in Gloucester County, NJ, which has since been approved for 62 units of age-restricted manufactured housing. The property currently has final approvals.
The application for a use variance was heard on May 24, 2021 and the variance was approved.
The Company applied for preliminary and final site plan approval and was heard at the April 2023 planning board meeting. Preliminary approval was granted, and the Company submitted for finals in the 4th quarter of 2023. The Company has since received final approvals.
The Company took title to this property in early September of 2023. It is the Company’s intention to develop this property, sell the individual manufactured homes and continue to own and operate the development as a land lease rental property.
Properties under Contract to Purchase and in Development
The Company has signed a contract to obtain approvals, acquire and improve a 96 unit townhome property (of which 80 units are market rate and 16 are Affordable Housing) in Southern Ocean County. This property has been pre-sold on an “as-improved” basis to a national builder.
The initial closing to acquire the property should occur in 2026, with site improvements to begin shortly thereafter. The sale of improved building pads should begin in late 2026 / early 2027.
Summary
These new developments which the Company owns or is in contract to purchase represent significant future earnings in new construction or forward contracts that have been pre-sold. This work will occur over the next 3-4 years and will occur in addition to the custom homes & elevation/renovation division of the business. Management is very positive about these new developments.
Mortgages on Properties Held for Development:
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