Investment Firm Buys Pointe West from Centex

Galveston County Daily News, April 3, 2008
by Laura Elder

GALVESTON — Confirming rumors circulating for weeks, a Dallas real estate investment firm said Wednesday it purchased five resort properties from Centex Corp., including the Pointe West development on almost 1,000 acres of the island’s western tip.

Macfarlan Capital Partners said Pointe West, along with two second-home properties near Austin and those in Tuckasegee, N.C., and Lincoln, N.H., would become part of the TerraMesa Resorts brand.

Centex Hospitality, which consists of 135 employees overseeing the company’s resort operations, was included in the acquisition.

Macfarlan declined to divulge the purchase price of the properties it acquired from Centex Destination Properties, a Centex Corp. subsidiary.

Altogether, Macfarlan purchased 3,900 acres — 1,900 of which are suitable for development.

The Pointe West property consists of 948 acres, 300 of which are developable, a Macfarlan spokesman said. TerraMesa will spend about $180 million to complete resorts and improve amenities, officials said.

In Galveston, some of that money will be spent finishing infrastructure and continuing land development, Macfarlan officials said.

While real estate agents continue to sell at Pointe West, Centex Destination Properties in July said it had “adjusted” the pace of its island development to accommodate a slower housing market.

A lull in construction at Pointe West generated much rumor and speculation. Announced five years ago, Pointe West was among the biggest real estate projects ever proposed in Galveston.

Centex had said it planned to develop a walkable community with single- and multifamily residences from beach to bay at San Luis Pass, on the last 3.5 miles of the island’s West End. Centex said at the time only 300 acres would be developed, the rest would be left as green space.

The pool, club and restaurant already are open at the resort, which includes some condominiums and single-family homes. Neither Centex nor Macfarlan would disclose the exact number of units.

TerraMesa Resorts, a subsidiary of Macfarlan Capital Partners, specializes in vacation destination properties.

Homeowners this week began receiving letters from Centex informing them of the Pointe West sale.

Centex said it would continue providing warranties for their homes.

Last year was a particularly tough one for Centex and most other major homebuilders.

For the third quarter of fiscal year 2008, which ended Dec. 31, Centex reported revenues $1.91 billion and a net loss of nearly $975 million, or $7.94 per diluted share.

Wednesday’s announcement by Macfarlan was the second large property sale this week for Centex, which has made no secret it is working to generate cash.

Centex Corp. said Tuesday it sold 8,500 lots in 11 states to a joint venture led by Dallas-based RSF Partners Inc. Centex received $161 million in cash but included an expected tax refund of about $294 million, bringing the deal’s total value to $455 million, the company said.

Macfarlan Capital Partners has completed more than $1 billion in real estate investments.

Along with Pointe West, this week’s acquisition includes: The Hollows on Lake Travis and The Waters at Horseshoe Bay Resort on Lake Lyndon B. Johnson, near Austin; Bear Lake Reserve in Tuckasegee, N.C.; and South Peak Resort on Loon Mountain in Lincoln, N.H.

Macfarlan previously acquired “V” at Lake Las Vegas in Nevada from Centex, which also is a TerraMesa Resorts property.