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Commercial Real Estate
Business Observer Friday, Apr. 26, 2019 3 years ago

Master-planned community has eye on more growth, opportunities ahead

Lakewood Ranch, in Manatee and Sarasota counties, is expanding by increasing its land area.
by: Grier Ferguson Sarasota-Manatee Editor

It’s going to happen.

That’s a key tenet of Rex Jensen’s philosophy on growth. And he knows a thing or two about the topic. He’s the president and CEO of Schroeder-Manatee Ranch Inc., the parent company of Lakewood Ranch, a 31,000-acre master-planned community with 36,000 residents and dozens of businesses in Manatee and Sarasota counties.

“The overarching aspect of growth is that I don’t give a damn if you don’t want it, it’s going to happen,” Jensen says. “The question is, ‘what form?’”

That’s what people should be asking, he says: do people want folks to live in a community like Lakewood Ranch or live in an area he characterizes as not so well planned, already too crowded without good infrastructure in place?

“We’re the leader, and we’re going to continue to lead. I’m not going to look back over my shoulder at someone who’s trying to catch up and probably never will.” — Rex Jensen, president and CEO, Schroeder-Manatee Ranch

Unless Lakewood Ranch finds ways to continue to grow, the area will default to non-Lakewood Ranch forms of growth. “I don’t think that’s a better choice,” Jensen says. “I think we also owe it to our shareholders to extend our brand to other areas if we can do so under the right terms.”

Already one of the fastest-growing master-planned communities in the country — John Burns Real Estate Consulting and RCLCO Real Estate Advisors both named it No. 2 nationwide in 2018 sales — Lakewood Ranch isn’t finished growing yet. It’s embarking on several new initiatives to increase its area and density, in addition to its brand. 

Lakewood Ranch’s success in attracting new residents, Jensen says, is tied to the fact that it’s not just a community filled with houses. “Part of the quality is the lifestyle,” he says. “When you buy a home here, you’re not just buying a house. You’re buying into a very active, engaging lifestyle.”

Some real estate developments are “projects,” not “communities,” he adds. “They don’t have schools, they don’t have churches, they don’t have parks inside them, they don’t have employment opportunities, and to me, that’s the difference between a square and cube.” 

The success led SMR to expand Lakewood Ranch’s geographical area, recently closing on four square miles of new property that will further its agricultural operations. The company’s agricultural efforts include a fill dirt excavation operation being moved to the new site and sod operations that will also move there. Jensen says there could also be some cattle interests. "We’re not just real estate investors," says Jensen.

The new land also serves a key strategic purpose. “That gives us a place to put those operations for a few years while we think about what the future for that property is for the longer term,” Jensen says. “Right now we’re in the process of planting 600 acres of sod fields.” Over time, it may increase the size of the fields.

And sod becomes a tool of vertical integration, since those who buy land from SMR need sod for road rights of way, developed lots, parks and more. “Even though a particular property isn’t ready to develop yet, it still feeds into activities created by the development process,” Jensen says. 

Lakewood Ranch, meanwhile, is also expanding to include 450 acres prolific area builder Neal Communities recently purchased off Fruitville Road. The site — just south of Lakewood Ranch Golf and Country Club and connected to SMR-owned land —  is entitled for up to 900 residential units and a town center. Neal Communities paid $21.55 million for the site. 

Adding the land is a win for SMR, which charges any builder that sells a home in Lakewood Ranch a marketing fee per home. It's a win for Neal Communities, too.

“As I often say, ‘Lakewood Ranch is the center of the universe,'" writes Pat Neal, founder and chairman of Neal Communities, in an email response to questions. "By that I mean that Lakewood Ranch is the most highly desired location for new housing in Sarasota and Manatee counties (and for miles around).”

There’s also a sales price benefit. “Homes at Lakewood Ranch sell for 15% more than homes not in Lakewood Ranch,” Neal adds. “That is because it is a popular, desirable and sought-after community.”

Along with adding new land, the master-planned community is growing by increasing its density, too. It’s developing a new village called Waterside, expected to have more than 5,000 homes when finished. Within Waterside, Waterside Place will include commercial, retail and office space. 

Amid the growth, Jensen isn’t fearful of competition. Instead he looks inward, with an eye on improvement. “What I’m about is to try to continue to enhance what we do, which is lifestyle, lifestyle, lifestyle,” he says. “We’re the leader, and we’re going to continue to lead. I’m not going to look back over my shoulder at someone who’s trying to catch up and probably never will.”

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