Argosy Invests in Placer Vineyards

On May 16, 2013, Argosy Real Estate made a controlling equity investment in Placer Vineyards, a 114-acre parcel planned for residential, commercial, and other uses. The project is located within the Placer Vineyards Specific Plan (“PVSP”), west of Roseville in southwest Placer County, which is a preferred submarket for new home construction in the Sacramento, California MSA. The Sacramento MSA is the 4th largest MSA in California and the 25th largest in the country. The business plan is to advance entitlements to the approved tentative tract map stage prior to selling the Project as entitled but undeveloped residential lots and commercial acreage.

LDK Ventures, an affiliate of the Kelley family and experienced local land developer will serve as operating partner and is a minority co-investor in the project. LDK Ventures boasts a long and successful track record as one of the leading land developers in Sacramento, and is the developer of two of the largest master-planned communities in the market, Stanford Ranch and McClellan Park.

Placer Vineyards is currently zoned for 38 acres of medium-density residential use, yielding an estimated 209 single family lots, and 38 acres zoned for retail, power center and business park development. During the processing of entitlements, LDK Ventures will pursue rezoning of the commercial acreage, along with seven acres currently zoned for religious use, to residential use. If successful, rezoning could yield up to 206 additional residential lots, generating significant upside above underwritten returns.

The PVSP is considered an “A” location by homebuilders, and builder activity continues to accelerate, ensuring a healthy market of potential buyers when the project is brought to market. Competitive supply is expected to be limited during the projected hold period. With land development having nearly ceased over the past five years, the continued recovery in new home sales volume is expected to result in a shortage of buildable land positions available to homebuilders.