[Papa_lecki]

With the talk of Spanish Springs, it got me thinking, where do you think the Developer generates more income?

Commercial Real Estate Landlord or
Home Developer?

[Bill14564]

Originally Posted by Papa_lecki

With the talk of Spanish Springs, it got me thinking, where do you think the Developer generates more income?

Commercial Real Estate Landlord or
Home Developer?

Interesting question.

As a Home Developer he earns profit on approximately 250 sales each month. I have to believe the profit on a single home sale is significantly more than the lease for a single commercial property. Could he own enough commercial property (some multiple of 250 units) to overcome that difference?

[pauld315]

Originally Posted by Bill14564

Interesting question.

As a Home Developer he earns profit on approximately 250 sales each month. I have to believe the profit on a single home sale is significantly more than the lease for a single commercial property. Could he own enough commercial property (some multiple of 250 units) to overcome that difference?

Last I saw, they own over 7 million square feet of commercial property. Commercial property leases are their biggest source of revenue by far.

[Bill14564]

Originally Posted by pauld315

Last I saw, they own over 7 million square feet of commercial property. Commercial property leases are their biggest source of revenue by far.

So some WAGs on numbers:

Commercial: 7,000,000sqft * $30/sqftyr = $200M/yr
Development: 3,000homes/yr * $400,000/home * 15%profit = $180M/yr

Using those guesses, commercial wins but certainly not "by far."

[gego3650]

no facts just guessing

[Bill14564]

Originally Posted by gego3650

no facts just guessing

Yeah, I thought about asking them to show me their books but didn't think I would get very far.

Lacking that, the only information is the number of new homes as reported by Sumter County in their annual budget letter, the number of square feet of commercial space as reported by the Villages in their advertising material, a high average of retail space rent across the country, and a high average of developer profit on new home sales.

[BrianL99]

Originally Posted by pauld315

Last I saw, they own over 7 million square feet of commercial property. Commercial property leases are their biggest source of revenue by far.

Just a wild guess, but if the Developer sells 3000 homes per year and owns 7,000,000 of commercial space, I'd say his single family home sales generate double the profit of his commercial space. $300M vs $150M.

[CoachKandSportsguy]

Originally Posted by Bill14564

So some WAGs on numbers:

Commercial: 7,000,000sqft * $30/sqftyr = $200M/yr
Development: 3,000homes/yr * $400,000/home * 15%profit = $180M/yr

Using those guesses, commercial wins but certainly not "by far."

Agree, and potentially the dev 15% is a bit low, being in a monopoly market.
I would use 20% because of the monopolistic backdrop. .

good finance estimates though

[Kenswing]

If you add the actual businesses that Developer owns to the commercial side I think it might tilt it in that direction. Don’t forget, the Developer owns Villages Health, Citizens First Bank, the golf cart stores, the title company, the Championship golf courses and clubhouse restaurants. They still own the majority of the amenities below 44. I’m sure they have a lot more stuff that I haven’t mentioned. One thing for sure is that the residential feeds the commercial.

[BrianL99]

Originally Posted by CoachKandSportsguy

Agree, and potentially the dev 15% is a bit low, being in a monopoly market.
I would use 20% because of the monopolistic backdrop. .

good finance estimates though

Home estimates are low, IMO.

The Developer is earning a "developers profit", a "builders profit" and a "sales commission". More likely, closer to 20%-23% in total ... perhaps higher.

For Commercial Space, I used a blended rate of $23/sq. ft. net. I could be off on that.

[Normal]

Originally Posted by Papa_lecki

With the talk of Spanish Springs, it got me thinking, where do you think the Developer generates more income?

Commercial Real Estate Landlord or
Home Developer?

It’s the bank.

[Altavia]

Originally Posted by CoachKandSportsguy

Agree, and potentially the dev 15% is a bit low, being in a monopoly market.
I would use 20% because of the monopolistic backdrop. .

good finance estimates though

Especially since profit on view lots will be considerably higher.

[justjim]

Originally Posted by Bill14564

So some WAGs on numbers:

Commercial: 7,000,000sqft * $30/sqftyr = $200M/yr
Development: 3,000homes/yr * $400,000/home * 15%profit = $180M/yr

Using those guesses, commercial wins but certainly not "by far."

As reported by Forbes, the Developers are Billionaires but most would say they earned it! Frankly, only they know where the “most” profit comes from. Anything else is anybody’s guess.

[Topspinmo]

Originally Posted by gego3650

no facts just guessing

My guess is sales, diverting costs, and control amenities/impact frees.

[PersonOfInterest]

Trail Fees and Amenity Fees.