Two CIRI Land Development Company (CLDC) subdivisions—Escondido North and Ladera—achieved important milestones in 2019.
Despite Alaska’s recessionary environment, CIRI’s real estate segment brought in net income of $44.5 million in 2018 (the most recent year for which figures are available), due in large part to investments in the Lower 48. Low vacancy rates, coupled with historic low interest rates, fueled strong value appreciation in the company’s multi-family real estate portfolio, allowing it to harvest growth in properties that had reached stabilization.
Real estate remains a cornerstone of the company’s business portfolio, with CIRI continuing to develop residential subdivisions on land holdings located in and around San Antonio. Ranked among the fastest-growing cities in the U.S., San Antonio’s housing market is strong.
Situated 15 miles northeast of downtown San Antonio, Escondido North is a master-planned subdivision with builders providing high-quality homes at entry-level prices. CLDC, a wholly owned CIRI subsidiary, began the first stage of development as an equity partner, delivering lots to homebuilders in 2007. In 2008, the Great Recession hit. As builders began defaulting on lot-purchase contracts, CLDC took control of the development to protect the investment.
The housing market, along with the rest of the U.S. economy, began its years-long recovery in summer 2009. Things started looking up for Escondido North in 2014, when the second-largest homebuilder in the U.S., Lennar Homes, expressed interest in purchasing the existing finished lots, along with unfinished lots in additional future units. A 2015 sale within the development of an elementary-school site proved a great benefit to the project and helped solidify a contract with Lennar Homes for 198 finished lots.
Lennar began construction of a model home and several speculative houses toward the end of 2016, attracting strong initial interest. The homes, which range in price from approximately $178,000 to $212,000, feature large master suites, open kitchens and family rooms. They are within close proximity to two military bases, parks, schools, restaurants and shopping. The remaining raw land was sold to a competing national builder, KB Homes, in 2018.
Fast-forward to 2019 and San Antonio’s housing boom: Lennar gained momentum as it continued constructing high-quality, single-family homes and purchased the remaining finished lots ahead of schedule. After fulfilling its obligations, CLDC transferred control of the homeowner’s association and sold the final parcel within the development—a commercial lot—concluding the company’s interest in the Escondido North subdivision.
After a period of inactivity brought about by the downturn in the U.S. economy, in 2015, CIRI Land Development Company (CLDC) resumed efforts on its 1,100-acre planned community in the rolling hills of western San Antonio. Named for the Spanish word for “hillside,” Ladera boasts wide open spaces and breathtaking vistas. It also features a well-planned, thoughtfully designed community consisting of eight unique neighborhoods, and offers access to nearby employers, schools and attractions. The San Antonio western submarket continues to be the city’s best-performing real-estate market.
In 2017, to accommodate demand for additional housing and provide access to more developable acreage, an additional phase of lots and extension of the main thoroughfare was completed. The sale of an 18-acre tract to the local school district for a future elementary school, the addition of an amenity center and construction of a unit of smaller lots also occurred.
Construction of homes by multiple regional and national homebuilders was strong in 2018 and 2019, with homeowners taking occupancy of the completed homes within the development.
Ladera’s North Ridge and High Point neighborhoods provide homeowners choices for top-quality, affordable homes within an environmentally sensitive 1,100-acre master-planned community. The Lucas Creek Trail links Ladera’s neighborhoods with an extensive network of walking and biking trails. Construction has begun on the Medina Valley Elementary School, with a projected opening of fall 2021.
Given San Antonio’s unprecedented growth trajectory and the size and ambitious scope of Ladera, CIRI expects that construction and regular lot sales will continue for years to come.