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Lehman Brothers Said to Seek Partner on Real Estate Development Projects

Lehman Brothers Holdings Inc. (LEHMQ) sent requests to at least six homebuilders and developers seeking partners for 75 real estate projects in 19 states, according to executives at three companies who reviewed the solicitations. Homebuilders PulteGroup Inc., Standard Pacific Corp. (SPF) and Toll Brothers Inc. (TOL), along with developers DMB Associates Inc., FivePoint Communities Inc. and Newland Communities received proposals, said the executives, who asked not to be named because of a confidentiality agreement. The requests, which came from Alvarez & Marsal Inc., Lehman’s bankruptcy restructuring firm, didn’t detail the property portfolio, they said. Chief Executive Officer Bryan Marsal said in December that Lehman is seeking to bring “strategic projects involving some very high-quality assets” to market in 2011 as property values rise. The company’s holdings include residential and master- planned communities valued at about $2 billion, down from as much as $8 billion before the real estate crash, said Tony Avila, CEO of Avila Advisors, a homebuilding consulting firm in San Francisco. “It’s big,” Avila, who hasn’t seen the solicitation, said in a telephone interview today from London. Kimberly Macleod, a spokeswoman for Lehman in New York, declined to comment. Lehman listed total real estate assets of $23 billion the day before its Sept. 15, 2008, bankruptcy, the largest in U.S. history. They had a market value of about $14 billion nine months later, according to court papers. ‘Operational Expertise’ The Lehman “portfolio has obviously been on the radar screen of the real estate community since late 2008,” said Richard Gollis, principal at Concord Group, a real estate advisory firm in Newport Beach, California. “In our view, it will only move forward with long-term capital combined with specific operational expertise in entitlement and development.”

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