- December 9, 2024
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In 2008, just as the financial crisis was in full bloom, Minto Group made a bold move: It opened an office in Tampa with a plan to expand on Florida's West Coast.
It wouldn't be until two years later, in 2010, that Minto and other builders would finally see some stabilization after the real estate collapse.
But Minto had a head start on competitors.
By 2010, the privately held Canadian residential developer and homebuilder had secured lots and land in the retirement mecca of Sun City Center and Perico Island in Bradenton (now called Harbour Isle). And Minto started building homes in three of the region's most desirable communities: Fishhawk Ranch east of Tampa, Lakewood Ranch in Sarasota and TwinEagles in Naples.
Earlier this year, Minto closed on its biggest deal on the Gulf Coast: the $68 million acquisition of Sabal Bay, 2,416 acres off U.S. 41 in Naples from Collier Enterprises. The company plans to build 1,600 homes there and has renamed the project The Isles of Collier Preserve.
“We're seeing a lot of demand throughout Florida,” says Michael Belmont, president of Minto Communities Florida. He says the homebuilder and developer has been able to increase the prices of new homes it sells by 8% to 20%, though some of that has been offset by increases in labor and materials expenses. “It's part of what happens when the economy recovers,” says Belmont, who previously led Florida's homebuilding operations for Centex and Meritage.
Minto, which has been building on the east coast of Florida for the last 35 years, has 120 employees, and Belmont expects that to grow to 140 by the end of the year. The company is scouting additional land from Tampa to Naples. “We have a significant piece under contract,” Belmont says, with enough room for 800 homes, although he declined to be more specific.
Belmont declines to cite revenues for the company controlled by the Greenberg family of Canada. But he expects the company will sell 700 homes in Florida this year with an average price of about $350,000. Sales growth last year was in excess of 30%, he says.
“They've got Florida down,” says Lesley Deutsch, senior vice president with John Burns Real Estate Consulting, who has advised Minto on various acquisitions.
“Their main strength is the uniqueness of their product,” says Deutsch, who notes that Minto carefully evaluates each community based on demand only in that market. “They do their homework and they build to what the market is looking for,” she says.
Target: Florida's Gulf Coast
Minto was not immune from the real estate crash that began in 2007, but its executives saw the bubble forming. “In 2004 and 2005 we stopped buying land,” says Belmont.
Instead of slashing prices, Minto built smaller homes and priced them to the new, lower market. “We weren't going to chase the market down,” Belmont says, noting home values in tony Palm Beach fell 30%.
Belmont declines to cite the exact impact of the bust, but the pain still lingers. “It was tough,” he says. “We had a significant reduction in staff. We did what we had to.”
But those who work with Minto say the company was busy creating new designs to keep business coming and didn't abandon any of the projects it started. “They kept all their trade partners alive,” says Don Hearing, a partner in Jupiter-based Cotleur & Hearing, a landscape architecture, land planning and environmental consulting firm.
“They're always encouraging their professionals to be innovative and collaborate and be creative,” says Hearing. “They expect performance, but they're a very loyal company.”
Until it opened an office in Tampa in 2008, Minto's efforts have been focused on the east coast of Florida. But the company likes to control the development where it builds, and there's more land available on the west coast. “The east coast, by geography, is running out of land,” says Belmont.
Belmont says the company has had a good relationship with lenders such as Toronto-Dominion (known as TD Bank), Wells Fargo and Bank of America, even through the downturn. After all, the company has built more than 70,000 homes in its 55-year history. Those relationships, he says, have allowed Minto the ability to finance land acquisitions during the downturn, albeit with what Belmont says is “significant equity” by the company.
At Sun City Center near Tampa, Minto was able to buy the retirement community's last 1,000 lots for less than $10 million in 2010. That helped Minto offer new homes at Sun City for $100 per square foot profitably, a big advantage over competitors. Minto expects to sell 130 homes there this year priced from $160,000 to $230,000, Belmont says.
The first sign of an improving market was when foreclosures started to fall back and more people were visiting the company's sales centers. “We started to see the traffic coming back in 2010,” Belmont says.
The real estate market has improved to the point that people are mobile again. “A lot of folks are now able to sell their homes and they can invest in new construction,” Belmont says, noting that 40% of the company's customers pay in cash.
More land in the pipeline
An improving real estate market, particularly in Collier County, made the acquisition of Sabal Bay appealing. Minto paid $68 million for 2,416 acres in Naples where it plans to build 1,600 homes.
Half of the development, now called Isles of Collier Preserve, will be preserved natural habitat. A sales center will open in November and homes will be priced starting between the high $300,000s and $700,000. “It's a significant asset for us,” says Belmont.
Minto is scouting more land in the geographic triangle that stretches from Orlando to Tampa and Naples. “We have a well-positioned pipeline of land,” says Belmont, who estimates Minto now controls about seven to eight years' worth of lots based on the current sales pace.
But the challenge now is that land prices have surged 30% to 40%, in part because publicly traded homebuilders have been on a buying spree lately. “I don't know that home prices can increase at the same rate,” worries Belmont.
What's more, labor and materials costs have risen. Belmont says it's harder to find labor on the west coast of Florida, in part because subcontractors have been reluctant to hire. “I think the trades want to know this is sustainable,” Belmont says.
Still, the demographics and standard of living will continue to drive migration to Florida. “Florida is still very affordable,” says Belmont.