Austin’s Forestar Group selling assets in $232 million deal


Less than a year after it made a bid to take over Austin-based Forestar Group, Connecticut-based investment firm Starwood Capital Group is now buying a chunk of assets from the Austin real estate development company.

Starwood Capital Group said Thursday that is teaming with an affiliate of Land Strategies Management to purchase 20 community development projects from Forestar Group. The deal is valued at $232 million, Forestar Group said in a filing with the U.S. Securities and Exchange Commission.

The 20 projects consist of about 750 lots that are either already developed or under development, along with nd more than 4,000 undeveloped lots, 730 unentitled acres and an interest in another multifamily operating property, Forestar Group said in a news release.

“We are excited about this transaction with Starwood that generates significant cash flow,” Donald J. Tomnitz, executive chairman of the Forestar board, said in a written statement. “Divesting these legacy projects will help streamline our business and provide capital for future growth. We plan to invest this capital primarily into new land development projects to improve returns and enhance value for our shareholders.”

The asset sale comes less than a year after Starwood initiated a takeover bid for Forestar Group. That bid failed when Dallas-based D.R. Horton Inc. issued a competing offer, and eventually outbid Starwood.

Forestar Group shareholders approved the D.R. Horton offer in October, agreeing to accept $17.75 per share in a deal worth about $560 million. Before the transaction, Forestar Group said it would remain a public company to retain access to public capital markets and secure funds for new land deals and other transactions. It also said it would continue to run its residential and mixed-use real estate development operations from Austin.

Forestar Group was spun off from the former Temple-Inland Inc. in 2007. Through the years Forestar Group has operated in real estate, oil and gas and other natural resources. It currently operates as a residential and mixed-use real estate development company.



Reader Comments ...


Next Up in Business

Top Local Business Stories of the Week
Top Local Business Stories of the Week

INDEED EXPANDS Indeed plans to expand in Austin, add up to 3,000 jobs: Internet job search company Indeed said las week that it is launching a new wave of growth that could add as many as 3,000 new jobs in Austin over the next several years. Indeed, which currently has 1,600 employees in Austin, has been one of Central Texas’ fastest-growing...
Early in 2018, sales tougher to come by for Austin-area auto dealers

After several strong years, some headwinds are starting to appear for Austin-area auto dealers. Following a national trend, local sales of new vehicles declined in the first four months of 2018, bearing out market forecasts that projected a dip following several record-setting years. Sales of new vehicles in Central Texas decreased by 4.4 percent for...
Austin jobless rate falls to 2.8% as tech, hospitality sectors boom
Austin jobless rate falls to 2.8% as tech, hospitality sectors boom

Austin’s strong technology sector and the status of the city as an entertainment destination continued to power the local economy in April, with the monthly unemployment rate slipping below 3 percent as thousands of new workers moved into the region over the past year. The trend is the latest evidence of a booming job-creation engine locally...
EXCLUSIVE: Austin businessmen give $5 million to Waller Creek project
EXCLUSIVE: Austin businessmen give $5 million to Waller Creek project

Two Austin businessmen have teamed up to donate $5 million to the Waller Creek revitalization project. World Class Holdings founder and CEO Nate Paul and Vista Equity Partners co-founder and President Brian Sheth are now challenging others to step forward and do the same. The money, along with other contributions to the Waller Creek Conservancy, will...
Austin’s High Brew Coffee lands $20 million to continue growth
Austin’s High Brew Coffee lands $20 million to continue growth

Austin beverage maker High Brew Coffee has landed a $20 million round of funding to continue the fast-growing company’s expansion, High Brew executives said Friday. High Brew will put the new funding toward brand growth, marketing and retail and distributor partners, the company said. The funding round comes from multiple investors, but was led...
More Stories