Petrus Partners Filling Up on Residential Lots

By Brian K. Miller

GOODYEAR, AZ – Petrus Partners Ltd., heretofore an investor in office and industrial properties, has snapped up 163 finished residential lots in the Canyon Trails master planned community here for $3.91 million. Petrus, the New York City-based parent of Crown West Realty, has accumulated 1,380 lots in recent months.

Petrus president Frank Walter tells theme in Petrus investments is “good properties at less than replacement cost.” The goal in this case is a 25% return on a three-to-five year hold, he says. Prices for lots have gone up in the past 90 days, he says, as homebuilders have become active buyers.

The lots in Canyon Trails, all 6,900 square feet and located in the Travis Park subdivision, were acquired in association with Voyager Investment Properties LLC of Scottsdale, AZ. The seller was Brown Family Communities of Tempe, AZ in conjunction with MCA Financial Group, Ltd. of Phoenix as receiver.

Petrus reportedly closed the transaction within three days of winning the auction, which was ordered by the Superior Court of Arizona. Tom Tait, Jr. of Land Group Real Estate LLC acted as the seller’s broker while Patrick Whelan of Land Advisors Capital LLC advised Petrus.

Continental Homes, now part of D.R. Horton, Inc. began developing Canyon Trails in 2000-2001, according to Petrus. Since then approximately 70% of the 2,000-acre project has been built out. Leading up to its receivership last fall, Brown Family Communities sold 23 homes in Travis Park at an average price of $275,000, according to Petrus.

Prior to Canyon Trails, Petrus acquired lots in three other Phoenix developments, Watson Estates, Estrella Mountain and Arroyo Seco North. The lots are being acquired with a fund Petrus closed earlier this year, Walter says, adding that Petrus will continue to purchase residential lots in the region that it believes will meet its investment goals. Approximately two-thirds of the firm’s investment capital is from retired partners of Goldman, Sachs & Co.