Thursday

Prop G: 10,000 New Homes for Hunters Point


Lennar and the Unions Make a Deal

Lennar strikes a deal with the SF Labor Council to build 10,000 new homes at Hunters Point Shipyard. This is a huge development encompassing 721 acres of land that would build out homes, shopping as well as industrial and commercial space. Heres some of the highlights:

1. More homes for family's than originally planned. The average size will be 2.5 bedrooms.
2. 35 million set aside for job training programs for the resident s of the neighborhood
3. The San Francisco Labor Council agrees to to support Prop G on the June 3 ballot public support for the project
4. A new 49ners stadium, if we can convince them to stay.
5. Affordable housing: 25% of the homes would be classified as affordable.
5a. 1600 units for very low income families
5b. 1600 homes for purchase for people making between 80-160% of the areas median income.

Their is some doubt in my mind to Lennars ability to commit at a time when home builders are the walking wounded. As home prices have tanked we have seen more and more supply come onto the market. This has hurt all the builders and just recently Lennar credit ratings have slipped.
S&P's expectation that it ( Lennar) will "face ongoing earnings pressure due to worsening operating conditions, particularly in its important California and Florida markets." S&P's outlook is still negative.
Lennar is Junk Status

In November, S&P dropped Lennar by two notches to "BB+," the highest junk rating, from "BBB." In October, Moody's also dropped Lennar's debt ratings to junk status. We dont expect Lennar to disappear but the city is signing paper with a very sick pup.


Thanks for Reading
Howard Bell
www.yourpropertypath.com
A web site of over 450 articles related to real estate focused primarily on property management.

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