Question-and-Answer Session
Operator
(Operator Instructions) We will go first to Alan Ratner with Zelman & Associates.
Alan Ratner - Zelman & Associates
Ken, a quick question on the land spend and what some of your comments about that -- I was a little bit surprised to see the letter of intent number so large there, $300 million. And I know in the past you’ve kind of indicated that you thought the real land opportunities was more of a 2010 event, coming from the distressed side and just looking at that number, it seems like maybe that might have come a little bit earlier than you were originally expecting, so I was wondering, was there anything that changed in the quarter, either from the bank’s willingness to bring attractive lots to the market, or are these primarily lots sitting on the developers books? Any color that you can give surrounding what is the composition of those lots, who owns them, what pricing looks like, would be very helpful.
Kenneth Lind Campbell
I wouldn’t get too scared of the number because what you need to get -- what’s the ratio of letter of intent to sales is pretty small. The -- so I mean, it’s an indication that there’s lots of stuff to look at but it’s not a very good indication about -- of how much do you think we are actually going to spend. So the first part of it, I used to say I thought 2010 was when the opportunity is. I still think it’s 2010. So I don’t really think we are -- we will buy much in the next couple of months. I think we will buy some but maybe a little more than we did in the quarter that just finished, or maybe not. So I still think it’s 2010. I think this is just a precursor.
In terms of who is selling, a lot of our purchases have been from banks, so banks are the new land bankers. I think maybe -- no, there’s been a couple from developers or whatever but almost -- a lot of it is from banks. I think that the banks are definitely starting to at least stick their toe in the water with the let’s see if we can sell this sucker. I think that part of what is happening is the initial sales of some of the banks turned out not to be disasters for the banks, that the prices that were bid and the number of bidders and things like that were reasonable and so that is bringing a little more out of the woodwork. You know, the banks had the ability to hold the assets for some period of time, and they didn’t want to do the fire sale thing that they did the last time because they saw a lot of people making money off of them by flipping properties in short periods of time, so I think that that’s encouraged some of the owners of these assets that well, maybe it’s a reasonable time to sell after all.
- To read the full transcript on Seeking Alpha, click here »
