Minto's Market

Executive Summary
Company. Minto Communities Industry. Development Key. Baby boomers continue to drive the housing market on the Gulf Coast.

Some days, it seems Michael Belmont lives in his GMC Yukon on Interstate 75.

Belmont is the president of Minto Communities, a Florida homebuilder with a Canadian parent that has built homes on the east coast of Florida for nearly four decades.

But in a stroke of good timing, Minto opened an office in Tampa in 2008 and made some shrewd acquisitions at the bottom of the market. It snapped up discounted land in Sun City Center in south Hillsborough County and Perico Island in Bradenton, now called Harbour Isle on Anna Maria Sound.

Belmont didn't stop there. He continued south down I-75, buying lots at Lakewood Ranch, Bonita Isles in Bonita Springs and TwinEagles in Naples. Then, in 2013, Minto closed on its biggest deal on the Gulf Coast: the $68 million acquisition of Sabal Bay, 2,416 acres off U.S. 41 in Naples from Collier Enterprises. Renamed The Isles of Collier Preserve, the development is close to selling 200 homes a year there for an average price of more than $680,000.

Now, Minto is making an even bigger investment in Southwest Florida. Once permitting is completed, the company plans to buy enough land from Collier Enterprises in eastern Collier County to build 10,000 lots and 2 million square feet of commercial space, enough to fill nearly 35 football fields. Initially, the plan is to develop a 4,000-home, age-restricted community with a golf course, parks and a town center with shops in an area once called Big Cypress.

“With the demographics and the amount of people moving to Florida, it's one of the best opportunities,” says Belmont. “We're very invested in Florida.”

Minto's Florida operations have rebounded smartly from the recession. The company sold 720 homes last year with total sales of $350 million, up 10% from 2014. “We expect to see the same pace for the next several years,” Belmont says.

Looking ahead, Belmont says Minto owns or controls 15,000 lots. “That sets us up for continuing development and homebuilding,” he says.

Collier push
The Florida homebuilder, whose parent, Minto Group, is privately controlled by the Greenberg family of Canada, had the wherewithal to acquire land during the recession thanks to longtime relationships with banks that financed its developments.

For example, Minto bought lots during the downturn in the retirement Mecca of Sun City Center in South Hillsborough where it has been selling 120 homes a year. Now, there are only 170 homes left to sell there. “Sun City was a great community for us,” Belmont says.

But Minto didn't spare expenses when it acquired the land that is now the Isles of Collier Preserve for $68 million, where it is building 1,600 homes on 2,400 acres. The move sealed Minto's role as a significant development force on the Gulf Coast.

Minto's success at the Isles was immediate. It opened the community for sale in February 2014 and sold 124 homes that year. In 2015, it sold 186 homes there. Belmont says the company has been able to raise prices there about 8% to 12% since opening, and prices have averaged $680,000.

In fact, the Isles of Collier Preserve has proven to be more successful than some expected. In just two years, it ranked fourth among all communities in Southwest Florida with 171 annual housing starts, according to market tracker Metrostudy.

“The conventional wisdom a couple years ago was they wouldn't be able to achieve the kind of velocity at these kinds of prices,” says Ross McIntosh, a longtime land broker in Collier County. “That's a testimony to their planning and execution.”

Bigger plans
But Minto has bigger plans for Collier County. Together with Collier Enterprises, Minto is in the permitting phase of Rural Lands West, a 10,000-lot community with 2 million square feet of commercial space next to Golden Gate Estates at Oil Well Road. Formerly called the Town of Big Cypress in eastern Collier County, the first homes there could be ready by 2018.

Minto's timing is good. “Growth is heading out to the east,” says Russell Weyer, president of Real Estate Econometrics in Naples. “They're all heading toward Ave Maria and there's a lot of land there. By the time they get it permitted and getting stuff in the ground, the growth will start to get there.”

Weyer estimates 6,000 people a year move to Collier County, which has a population of about 350,000 people and has enough room for 900,000 people if those areas east of Interstate 75 get built. “We're just one-third of the way there,” he says.

The new town of Ave Maria near Immokalee has established eastern Collier County as a desirable place to live. “Ave Maria has blazed the trail and validated the whole idea of living east,” says McIntosh.

In fact, Ave Maria is now the top-selling community in Southwest Florida, according to the latest counts by market tracker Metrostudy. Ave Maria had 316 annual housing starts and 280 move-ins, the firm says.

Interestingly, Minto will start its Rural Lands West project with a 4,000-home age-restricted community. “It's a market demographic we're very comfortable with,” says Belmont.

As The Villages in Central Florida has proved, retirees will move to rural areas if necessities such as health care and shops are present, says McIntosh. “In my opinion, people will not choose to live on Oil Well Road if they can afford to live closer in,” McIntosh says. “That will change once Oil Well Road becomes its own place.”

The big driver, of course, is the baby boom generation that's retiring in record numbers because they can sell their homes up north and move to Florida. “The baby boom bubble has arrived,” McIntosh says. “We've been talking about it forever, and now it's here.”

Positive outlook
Belmont says the favorable economic conditions and the wave of retiring baby boomers mean the real estate cycle in Florida isn't nearing the end. “I think we're still in the mid-innings of the game,” he says.

Belmont says the home buying winter season started off slowly, partly because of warmer weather in northern states. But he says sales have picked up again in recent months.

Many buyers pay cash for their homes and the buyers aren't speculators. Those who finance home purchases have to meet more stringent criteria, which also may keep builders from overbuilding.

Although the company owns or controls 15,000 lots in Florida, Minto has diversified throughout the state. Besides projects in Southwest Florida, Minto is planning an age-restricted golf community of 3,400 homes in Daytona Beach and another 4,500-home community in western Palm Beach County called Westlake. “We don't try to overextend and we've been in good markets,” Belmont says.

For now, Minto is well positioned with its land bank. Belmont sounds cautious about the current prices of land for future development. “Land has gotten a little expensive and maybe not in the right areas,” he says.

While the national economy may be slowing, Florida continues to be a desirable destination. Belmont says he's generally not worried about the possibility of overbuilding. “We're not sensing it in any of our markets right now,” he says.