JEN Partners has funded the creation of a small Phoenix homebuilder to target distressed land sales in the region.
The New York-based private equity real estate firm has joined forces with former Engle Homes president Carl Mulac to form the four-man homebuilder as it seeks opportunities to take advantage of distressed residential prices.
Speaking to PERE, JEN founder Reuben Leibowitz said Joseph Carl Homes would focus on smaller projects involving around 20 to 40 infill lots that were in various stages of completion. The four-man homebuilder would then take over and “revive” the development.
“We are trying to do a lite-land homebuilder where we are looking to option, mostly infill, lots in Phoenix where the development has been forced to stop,” Leibowitz, a former Warburg Pincus managing director, said.
Founded in 2005, JEN Partners is focused on residential opportunities in Southern California, Phoenix and Florida, particularly Orlando. Leibowitz said the volume of deals was slowly starting to increase, after banks were reluctant to dispose of distressed assets. JEN is also targeting distressed debt investments, as well as foreclosed land opportunities.
According to a statement, Joseph Carl Homes will initially focus on developing homes ranging from 1,200 square feet to more than 4,000 square feet on lots in the gated community of Arboleda Ranch, near downtown Phoenix.
JEN Partners is in the process of raising its second fund, JEN Residential, and held a first close on $30 million of commitments in November last year. A final close is expected at the end of the year, beginning of 2010.
The predecessor fund, JEN I, invested in the now-bankrupt homebuilder Wall Homes along with Warburg Pincus. According to court filings, Warburg Pincus Private Equity VIII LP and Jen I LP were Wall Homes’ two largest creditors. Warburg Pincus owned almost three-quarters of Wall Homes’ stock, while Jen I owned around 13 percent.