With the help of a round of private equity funding, new development phases at a massive Chesterfield County residential community are ready to begin.
Construction will soon be underway on new homes at two upcoming neighborhoods in Fox Creek, a 400-acre residential and mixed-use development near Hull Street Road headed by TerraForge Communities.
TerraForge closed a deal this summer with a Miami-based real estate investor Rialto Capital Management to pump money into the project.
It’s the second time TerraForge and its president, David Cloak, have brought in private equity money as an alternative to traditional bank lending to push along the 1,500-home Fox Creek community.
“These large master-planned communities are difficult for conventional banks to finance today, and it’s as a result of new banking regulations put in place in the ongoing recovery from the housing crash,” said Cloak. “The private equity funding is really a replacement to that in many instances because of the sheer size of the dollars it takes to develop one of these communities.”
Local private equity fund Markel | Eagle Partners spurred the project along in 2011 with a $2 million investment in Fox Creek’s first phase. Cloak would not say how much Rialto had committed.
“That’s part of our partnership’s confidentiality agreement, but it’s a very sizable capital investment,” he said.
Fox Creek, which sits north of Hull Street Road and east of Otterdale Road, has about 400 residents in its first section called the Estates. Rialto is buying into the second and third phases of the project, a pair of communities dubbed Wynwood and Greenwich Walk.
Wynwood will add about 585 homes to Fox Creek. That includes townhouses and single-family homes. Townhomes will start at $275,000, and the detached homes will run from the high $300,000s to the low $500,000s.
“We’ll have anything from (townhomes) to alley-loaded properties similar to what you would find in the Fan and larger, executive-type homes,” he said.
HHHunt, Toll Brothers and Stanley Martin will build the homes at Wynwood. Toll Brothers has a model open and will be moving in its first residents in the next month or two. TerraForge is still developing sites at Wynwood and will have two more sets of 70 lots ready for builders in the next two months.
Greenwich Walk, the third phase at Fox Creek, will have homes by HHHunt, Ryan Homes and a third builder Cloak would not disclose. He said those units will start in the high $300,000s. TerraForge will begin site development at Greenwich Walk in August.
That section will target homebuyers 55 and older, Cloak said.
“Greenwich Walk is addressing a population segment in that part of the county that is really under-addressed at this point,” he said. “There’s a very steady demand for that kind of product.”
TerraForge bought the Fox Creek land in 2004 and sold the first lots in 2006. Since then Gemcraft Homes, Orleans, Ryan Homes and Toll Brothers have all bought lots. Cloak did not have a precise figure for the total cost of the sprawling development, but said there would be several hundred million dollars in Fox Creek by the time it is finished.
Fox Creek is one of two massive communities TerraForge is working on in Chesterfield County. Its Watermark development recently lured a grocery chain as an anchor for the 400-acre mixed-use project’s first retail phase.