A New Home For Newhall Land

After almost 35 years, the Newhall Land and Farming Company is packing up its Valencia Boulevard headquarters and moving.

Today, the longtime local developer, which built Valencia, is setting up shop in its new offices off Tourney Road.

At about 24,000 square feet, the new third-floor offices at 25124 Springfield Court are about half the size of the 47,000-square-foot building designed by architect Gin Wong in the early 1970s.

On Wednesday, the long, skylit atrium of the two-story Civic Center-area building was a jungle of moving boxes, file cabinets and decorative plants.

“This is a great building,” said Newhall Land spokeswoman Marlee Lauffer, who’s been with the company about 20 years. “But it’s not as efficient as it could be for our business.”

Indeed, while the Valencia Boulevard building was once abuzz with about 150 people, Lauffer said in recent years only about 45 employees have worked out of the building.

The building is owned by LNR, a spinoff of Lennar Corp., which bought Newhall Land in 2004. Lauffer said she is unsure what LNR plans to do with the building.

LNR officials could not be reached Thursday.

The building is designed with a central, front-to-back atrium with offices on either side. Lauffer said, by design, the building could be re-purposed to serve several businesses, rather than only one tenant.

In recent years, there was discussion about tying the Newhall Land building into an expanded Civic Center complex, Santa Clarita city spokeswoman Gail Ortiz said. Those conversations, however, remained at the staff level.

“It never crystallized past that,” she said Thursday. “The funding mechanism that would be required … really isn’t there.”

The building is next to the county-owned Santa Clarita Valley Civic Center, home to the SCV Sheriff’s Station – which officials have said is in dire need of expansion – the Valencia Library and the Santa Clarita Superior Court.

Built in 1974, the Newhall Land building survived the 1994 Northridge Earthquake; Lauffer said structural retro-fitting had been performed shortly before the quake struck.

She said the 6.8 magnitude temblor inflicted no structural damage.

Lauffer said the past several months have been busy with packing, going through “miles of files” and scanning myriad old documents and brochures.

“The scanners have been working overtime,” she said.

While it’s bittersweet to move out of the building in which she’s worked for two decades, Lauffer said she’s excited about the company’s move into a fresh facility.

Newhall Land is making its move less than a year after its owner emerged from reorganization after filing for Chapter 11 bankruptcy protection.

LandSource – owner of Newhall Land – filed for Chapter 11 protection in June 2008. At the time, the company received debtor-in-possession financing of $1.185 billion from a group of lenders led by Barclay’s Bank.

LandSource emerged from reorganization last summer as Newhall Land Development, with Lennar Corp. as a 15-percent owner.

With the Valencia-sized Newhall Ranch community yet to be built, Newhall Land has plenty of work to do in the coming 15 to 20 years, Lauffer said, and added: “We have a real bright future.”

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Lennar Posts Profit, CEO Upbeat

Lennar Corp.’s stock rose more than 15 percent Thursday after the CEO said he sees a trend in rising prices and anticipates the homebuilder will be profitable this year.

“Prices are no longer free-falling downward and in fact in many instances, are actually starting to stabilize and even recover,” CEO Stuart Miller said. “I feel comfortable today saying that this is a trend and not an anomaly.”

Lennar is the only builder in Valencia’s West Creek, West Hills and River Village developments, Newhall Land spokeswoman Marlee Lauffer said.

“It’s good to see that they’re optimistic about the market in 2010,” she said Thursday.

Lennar is a 15-percent owner in the partnership that owns Newhall Land Development — formerly the Newhall Land and Farming Co. — and has built homes in the Valencia tracts planned by the developer.

Lennar is presently the only builder operating in Valencia, which is in the final stage of its roughly 30-year buildout process.

Lauffer expects Lennar will be a key builder in the development of Newhall Ranch, a Valencia-sized community planned west of Interstate 5.

Miller added that he expects the company, which has operations in 17 states, will ramp up hiring as it begins to build new home developments this year. That’s a clear signal Lennar is betting the real estate recovery, while shaky, will hold.

The remarks followed Lennar’s report that new home orders rose for the first time in more than three years in its fourth quarter. The company also posted its first profit since 2007, thanks largely to a tax adjustment. The builder, however, warned it expects to post a loss in the first quarter.

Miller said the housing market continued to move toward stabilization during the three months ended Nov. 30. Orders of new homes rose 3 percent to 2,652, the first annual increase since the beginning of 2006.

The surge in new orders comes as first-time homebuyers raced to take advantage of an $8,000 tax credit that had been set to expire at the end of November. That deadline never came, however, as Congress extended the incentive through April and threw in another $6,500 tax credit for repeat homebuyers.

Shares in the Miami-based builder were up $2.09 at $15.79 in afternoon trading.

Investors are closely watching major homebuilders like Lennar because their performance is key to the housing market’s recovery, which has been dampened by job losses and tough lending criteria for many would-be buyers.

Sales of new homes plunged 11 percent from October to November to the lowest level since the spring. At the same time, the number of people preparing to buy a home in November fell sharply.

The big question now for Lennar and the rest of the sector is what happens when the buyer incentives go away a month into the traditional spring homebuying season.

“For all these builders, including Lennar, we’re trying to see how sustainable these order trends are going to be … after the tax credit expires,” said John Tomlinson, a senior analyst with Majestic Research. “That’s definitely a concern now.”

Miller noted the tax credit is helping whittle down the glut of unsold, foreclosed homes that compete with new homes. He expects the housing market will “see some stability” even after the government incentive ends.

“We’ll have to wait and see,” Miller said. “There’s nothing certain about what I’m saying.”

Lennar said it earned $35.6 million, or 19 cents per share, in the quarter ended Nov. 30. It had a loss of $811 million, or $5.12 a share, a year earlier.

The tax gain reported in the fourth quarter came from a change in federal accounting rules that allowed the company to reverse previous writedowns of deferred tax assets.

Without the tax benefit, Lennar would have lost $284.9 million, or $1.15 a share. The tax benefit was offset by charges totaling 89 cents a share related to adjustments in the value of land and other write-offs.

Revenue fell 29 percent to $913.7 million, because of a 22 percent drop in the number of completed home sales. The average sales price of a home dropped 9 percent annually to $238,000 .

Analysts polled by Thomson Reuters were expecting a loss of 48 cents a share, on average, on $863 million in revenue.

The number of buyers who canceled their contracts dropped to 20 percent from 32 percent a year ago.

For the full fiscal year, Lennar posted a loss of $417.1 million, or $2.45 a share, compared with a loss of $1.1 billion, or $7 a share, in 2008. Revenue fell 32 percent to $3.1 billion.

Orders for new homes in 2009 dropped 14 percent to 11,510. The cancellation rate improved from 26 percent to 18 percent.

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