Bidding War Erupts Over 274-Acre Land in West Valley, Sells for $63M.
On October 17, 2024, the Arizona State Land Department witnessed a packed house for a high-stakes auction over a prime 274-acre parcel in Peoria, near 83rd Avenue and Happy Valley Road. What started with a modest $46.275 million bid rapidly escalated into a fierce contest, as three major homebuilders contended for the land.
The final hammer fell on $63 million, with PulteGroup Inc. and Tri Pointe Homes emerging victorious after an intense bidding war. This strategic land acquisition positions these builders to develop homes in one of Peoria’s rapidly growing areas.
The Players in the Auction Showdown.
PulteGroup Inc. (NYSE: PHM) and Tri Pointe Homes Inc. (NYSE: TPH) united forces to outbid competitors for the West Valley land, which has been dubbed “Aloravita South” in filings with the Arizona State Land Department. Their primary competition came from a joint venture of homebuilding giants Shea Homes and D.R. Horton Inc. (NYSE: DHI), the original applicants for the auction.
Adding to the intensity, a third group consisting of Lennar Corp, Taylor Morrison Home Corp., and Ashton Woods Homes aggressively participated in the bidding process, pushing the price higher by increments of $1 million. The minimum bid increase required was just $100,000, but this battle was anything but restrained.
A Surging Market Drives Bidding Frenzy.
Unlike a previous 2020 auction, where Shea Homes secured a 415-acre parcel nearby for $46.77 million as the sole bidder, this latest auction saw multiple homebuilders vying for land. The reason? A dwindling supply of finished lots across Phoenix’s metro area, leading to heightened interest in any available land.
Shea Homes had developed its original Aloravita project on the 415 acres it won in 2020, which included plans for 800 homes. That parcel is situated near 75th Avenue and Jomax Road, making the newly acquired 274 acres a key piece of land for future developments in the area.
How the Bidding Played Out.
The bidding war escalated swiftly. Lennar and its partners repeatedly raised their bids by $1 million increments, driving up the price. It wasn’t until Shea Homes’ Jon Fisher stepped aside after the bid reached $62.5 million that D.R. Horton’s Patrick Brown entered the race, placing a final bid of $62.9 million.
Ultimately, the $63 million bid from PulteGroup’s Greg Abrams ended the back-and-forth. Abrams, the vice president of land for PulteGroup, celebrated the win alongside Tri Pointe’s Arizona division leaders, securing the land that will play a crucial role in future residential development.
Aloravita’s Growing Presence.
This acquisition is the latest in a string of successful developments for both PulteGroup and Tri Pointe Homes. Michelle Gregorec, Arizona division president for PulteGroup, emphasized that while the two companies have teamed up before in state land auctions, they hadn’t won one in three years.
James Attwood, the Arizona division president for Tri Pointe Homes, expressed excitement over expanding the company’s presence in the booming Peoria submarket. Tri Pointe has already established a reputation in the area with successful developments like the Meadows communities in Camino A Lago.
“State land auctions are crucial,” Attwood said, “as some of the most desirable land in the Phoenix metro is available only through these auctions. Aloravita is a prime example.”
The Future of Peoria’s Development.
This recent purchase isn’t the only large-scale project on PulteGroup’s radar. The company is also planning a major 6,355-acre master-planned community south of the Taiwan Semiconductor Manufacturing Co.’s (TSMC) massive $65 billion plant in north Phoenix. This project, still pending an auction date, will provide homes for the thousands of workers TSMC is expected to employ.
Bidding wars like this one are becoming increasingly common in Arizona. Back in November 2020, a state land auction for 2,783 acres in the East Valley saw similar excitement, with the winning bid jumping from $68 million to a staggering $245.5 million.
Another frenzied auction took place in June 2021 when Blandford Homes won 328 bids to secure 175.5 million acres in another state land deal. It’s clear that as land availability shrinks and demand for homes continues to grow, competition among homebuilders will only intensify.
Why This Auction Matters for Phoenix Real Estate.
The $63 million bidding war for this 274-acre parcel underscores the critical role of land auctions in Arizona’s real estate market, particularly as available land in the Phoenix metro area becomes scarce. The West Valley, and Peoria in particular, are experiencing rapid growth, but the supply of finished lots is shrinking. This has intensified competition among homebuilders, with state land auctions becoming the key battleground for securing land.
Additionally, the location of this parcel near major employment hubs, such as the $65 billion Taiwan Semiconductor Manufacturing Co. (TSMC) plant in north Phoenix, adds to its strategic value. The influx of thousands of workers to the region will drive housing demand, and securing land close to these job centers is crucial for builders like PulteGroup and Tri Pointe Homes to stay competitive.
Finally, the acquisition has broader implications for housing affordability. With land prices on the rise, the ability to build more homes in desirable areas like Peoria could help ease some pressure on the housing market, offering more options to homebuyers and potentially stabilizing prices in the region.
