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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.
Why Walton is bullish on the Fredericksburg area
Walton International Group thinks the Fredericksburg-area home-building market will improve over the next several years, and it’s betting big on the belief.
The Arizona-based real estate investment group has spent about $37 million over the past few years buying close to 1,750 acres along State Route 3 in Stafford County and in the area near the Spotsylvania Regional Medical Center.
After booming for many years, the Fredericksburg-area home-building market began slowing in 2005 and ground close to a halt within a few years amid a severe recession, credit crunch and oversupply of houses. Of late there have been some signs of improvement as the existing inventory of available houses dwindles and prices stabilize, but conditions remain tough for builders.
Walton executives think the severe drop-off in home construction over the past several years has laid the groundwork for an improved market in the years to come, particularly for regions such as Fredericksburg that have solid labor markets and projected population growth.
“We believe in the long-term fundamentals of the region and want to be a part of it,” Walton President Rob Leinbach said Monday.
Leinbach said Walton researches communities for years before making investments, studying data on jobs, building permits, available lots and population growth. It then looks for large tracts of land in suburban areas outside major population centers.
Walton also has investments around Charlotte, Atlanta, Austin, Dallas, Phoenix and Los Angeles. It owns land in other localities outside Washington, including in Charles and Prince George’s counties in Maryland.
Walton recently submitted plans for a Spotsylvania housing development just south of Lee’s Parke off U.S. 1 called Heritage Woods that could include as many as 1,060 homes on 378 acres. Last month it bought another 179 acres north of Massaponax Church Road and just east of the Lancaster Gate subdivision.
John Vick, who is Walton’s president for the Washington-area market, noted that both pieces of land are in an area of Spotsylvania that has been designated for growth. Walton also owns about 1,190 acres in southern Stafford along the north side of State Route 3 near the Little Falls Run wastewater treatment plant.
The company has not submitted any plans on the Stafford land or the property it bought last month in Spotsylvania. It started with Heritage Woods out of a belief that the development was relatively straightforward and poised for growth.
Walton typically sells shares of the land it buys to a network of retail investors all over the world. The company oversees the process of getting its land holdings rezoned and entitled, performs the site work and then sells the lots to individual builders.
Leinbach noted that the process of readying raw land for development takes many years. He said the company is now positioning its land to be ready for new homes should the expected housing rebound occur in the next few years.
He also said the company will continue to look for attractive land holdings in all the areas it has targeted for investment.