News Article | 7/27/2007

Hillwood buys into Waxahachie residential

Real estate development firm Hillwood has acquired 1,200 acres in Waxahachie and plans to add as many as 2,900 new residential lots there.

The Fort Worth developer bought the land in a neighborhood called Saddlebrook Estates from Bedford-based Centurion American Development Group, which has already developed 200 lots in the 2,000-acre project’s first phase. Financial terms of the transaction weren’t disclosed.

Hillwood’s stake is located east of Interstate 35E and north of U.S. 287. Waxahachie is roughly 30 miles south of Dallas off I-35E.

“Waxahachie is a promising emerging market that will continue to expand over the next few years,” said Brian Carlock, vice president for Hillwood Residential. He said Saddlebrook Estates is the first residential development of its kind in the area.

Michael Scott, Waxahachie’s assistant city manager, said the city approved its first-ever public improvement district for the community after Centurion presented its plans about two years ago. The district, an additional tax on property owners within Saddlebrook, will help Centurion add $26.9 million worth of amenities including upgraded thoroughfares, median landscaping, 6-foot sidewalks, recreation facilities and parks.

The assessment, Scott said, is on a graduated scale based on the size of the homeowner’s lot.

“A lot of tract builders or volume builders have come to Waxahachie and built their typical products in the community,” Scott said. “This project exceeds what volume builders typically build. This community will raise the bar.”

Carlock said both developers agreed to zoning standards that exceed those set out in city zoning and subdivision ordinances. The higher standards call for a variety of lot sizes, amenities and specific building requirements.

The 4,000 lots Centurion and Hillwood plan to develop will range in size from 6,600 square feet to 12,500 square feet. New homes will range in price from $150,000 to $300,000.

Plans for Saddlebrook Estates also include four swim clubs, 275 acres of parks, playgrounds, hike-and-bike trails, on-site schools, about 36 acres of commercial and retail space fronting U.S. 287, and 18 acres of condo or apartment projects.

Buying and waiting

Hillwood is not in any hurry to develop its portion. Carlock says the developer will wait a year or longer to let the market mature.

“At that point, we can hit the ground running and develop with a high velocity and momentum,” he said.

Ted Wilson, a principal with Dallas-based Residential Strategies Inc., said Waxahachie has had about 300 housing starts and closings per year.

“It’s a competitive market down there, a move-out market,” he said. “A lot of the value buyers still have opportunities in Glenn Heights and Red Oak, but Waxahachie has been an emerging market over the last two or three years.”

Wilson also said, however, that Hillwood and Centurion American will need to work hard on their marketing efforts to draw buyers down to U.S. 287, and they’ll need significant amenities to compete with communities to the northwest.

Waxahachie’s population is expected to increase by 15% over the next four years. The city is a county seat and the largest city in Ellis County, which is the second-fastest growing county with more than 100,000 residents in North Texas, behind Collin County.