Walton’s recent Evans buy the latest in a half-dozen big deals

The Front Range might not have heard of Walton Global Holdings Inc. but it’s about to.

Though with weather and how its land buys are currently configured, it could be a while.

Walton buys real estate and manages the land until it signs a builder — often just one — for the houses. Its boilerplate bio says it has 98,000 acres “under ownership, management and administration” in North America.

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Walton’s website shows it holds nine parcels in Colorado comprising 2,900 acres. Biggest is the roughly 1,250 acres at Banning Lewis Ranch near Colorado Springs. Two others are south of Denver in Douglas and Elbert counties, each about the same size and totaling 650 acres.

Six future developments on land held by Walton are in Weld and Larimer:

Altamira and Peakview in Weld, totaling about 275 acres.

Lee Farms, Lincoln Avenue, Mountain View and Taft Ridge in Larimer, with 700 acres among them.

Each of the half-dozen are roughly 100 to 200 acres.

The Weld County Assessor’s website also shows dozens of parcels under the name Silver Peaks but this isn’t listed on the Walton website.

Based on city planning websites and conversations with planners and Walton senior executives, projects are up to about a year away from starting.

Slow Roads

Many developments were interrupted by the pandemic.

Walton bought Loveland’s Lee Farms in January 2020, two months before the national shutdown began. City planner Troy Bliss said prior owner Denver-based True Life Cos. did a metro district on Lee Farms and changed its zoning to drop its commercial component and build townhomes, duplexes and detached single-family houses.

Then they sold it to Walton.

Bliss said finalizing a project “could be done administratively for minor changes” but changing density or reintroducing commercial “it’d have to go through the full process.”

The western portion of the parcel, which is in northwest Loveland, also needs a pump station before it can be developed, he said.

Bliss said no official filings have been made. This doesn’t preclude talks with developers or builders, and Jen Ruby, Walton’s senior vice president of land in Arizona and Colorado, said development actions on Lee Farms have begun.

Meanwhile Walton bought only one of the Weld projects, Peakview, in August. It buys its dirt via Walton Colorado LLC, secretary of state filings show. Solstice Holdings LLC in Fort Collins, an affiliate of New York City’s ROI Land Investments, sold the acreage between 37th Street and 65th Avenue.

Evans economic development manager Allison Moeding said the land was shepherded through planning and approval under the name Solstice.

Walton executive vice president for land Barry Dluzen said the company will go with Peakview. He said, “the first phase is platted and ready to go; entitlements are done.” Builder negotiations are in process and then “we’ll get started on development.”

Altamira in Lochbuie is also platted, Walton’s website said.

Mountain View in Berthoud isn’t listed under the town’s current projects moving through planning. Curt Freese, community development director for Berthoud, said via email that “nothing has been submitted or approved” on Mountain View, “nor has it been annexed.”

The town has talked with Walton twice over the past year. The site has “significant infrastructure issues … so this will take some time even if they do plan on submitting something.”

Build, Rent

Walton’s Ruby said a Taft Ridge timeline is “significantly later” than Lee Farms — “it hasn’t even been annexed yet” — and for Lincoln Avenue, Walton is talking with a builder.

She expects some movement in early- to mid-2022 but emphasized that nothing has been decided.

Several projects, she said, are undergoing market studies to see what kinds of housing they should get, and consequently what kind of builder is going to be best for it.

One option is a burgeoning national trend called “build-to-rent” in which single-family detached homes meant to be leased are built as if they were conventional for-sale residential.

Real estate data company CoreLogic Inc. in Irvine, California, said this month that single-family housing rents hit a nearly 17-year high in July, rising 8.5% year-over-year. Higher-priced products increased faster compared with the low-end of the market, online real estate trade journal GlobeSt.com said in September. Detached rental rent growth was twice that of attached rentals.

The demographic is trending toward Gen Z. More than 40% of the age cohort want to live in a detached suburban single-family home when they graduate — not the hip pedestrian downtowns of older siblings.

This also gets them out of expensive areas, where they’d be renters by necessity, into cheaper markets as renters-by-choice, GlobeSt.com said.

Near Walton’s Scottsdale headquarters, Phoenix was the strongest of 20 metro areas for this trend, a U.S. rental index said.

Walton executive vice president Paul Megler, a company point man on build-to-rent, said, “we’re trying to get the most efficient use from land and be the most fiduciary for our investors.”

He said a hundred acres would be a ballpark number for a portion of a development to be build-to-rent.

“We want to be in the next tranche of development,” Jen Ruby told the Denver Business Journal in June. “We want to be where everybody’s going, not necessarily where everybody is.

Lee Farms will not get build-to-rent, Ruby said; Taft Ridge and Lincoln Avenue might. Dluzen added the Berthoud project, Mountain View, to the potentials list.

“We’re working on a number of [such] deals,” Dluzen said.

Momentum, Money

“Our competency is finding land builders want and we hold that for them,” Dluzen said.

Walton manages and administers $3.4 billion in assets on behalf of global investors in 71 countries. It was previously based in Canada, where CEO Bill Doherty is from, and has offices in Dubai, Hong Kong, Singapore, Taiwan, Japan, and two in China.

The old-school term for the buying and holding land for investors is “land bank” but, noting the changing nature of the term, Ruby said Walton isn’t old-school. It also does rather more than buy-and-hold.

Builders and developers don’t, for instance, necessarily have to buy an entire project at once.

“It’s an efficient use of capital,” Dluzen said.

Couple the preservation of capital on land-buying with a metro district’s benefits on infrastructure finance and developers and builders could begin projects with far less upfront investment. Future future work gets funded by cash-flow from land and home sales.

Ruby cited other elements Walton is willing to take on: seller financing, deferred payments, a third of the cash upfront until they begin to build and sell, and so on.

These decisions are project-by-project, she said, and can be done in part because the foreign investors are patient.

Walton is active mostly in Sunbelt states and often retains an ownership slice of a development. Debt is rarely involved — again, because of its investors.