SunCor Development Co. is moving quickly to dispose of its home building and golf course operations, as well as its master-planned communities.
The Tempe-based company, a wholly owned subsidiary of
An 8-K document must be filed by publicly traded companies to report any major changes affecting shareholders.
“Boiled down to its essence, SunCor has decided to double down on its commercial Phoenix assets and sell its master-planned communities and homebuilding and golf course operations in four states,” said Steve Betts, president and CEO of SunCor. “We’re moving all of SunCor’s resources into commercial and mixed-use infill projects here in
Betts characterized the move as “a strategic decision, not a reactionary plan.”
But Dale Belt, managing director of Phoenix-based Sierra Consulting Group, which handles corporate reorganizations, bankruptcies, mergers and acquisitions, said he reads the 8-K differently.
“What’s really telling is that SunCor got a one-year extension on its revolving loan by its senior lender. They are the ones who are calling the shots,” Belt said. “I doubt whether this is SunCor’s idea.”
Belt said the 8-K also said Pinnacle West is not bailing out SunCor, which has $175 million in debt — $108 million to the unidentified “principal loan facility,” and the remainder to “other SunCor credit facilities.”
“Pinnacle West has money to pump into (SunCor), but they obviously don’t want to do that,” Belt said.
Pinnacle West also is the holding company for
Pinnacle West spokesman Alan Bunnell confirmed the holding company will not be bailing SunCor out, but said it won’t be selling the company, either. The assets that will be retained “will provide potential future upside with minimal ongoing capital requirements and costs,” he said.
Those assets include 2,000 acres in the
Bunnell added, “We expect (SunCor) to meet its obligations as a stand-alone company.”
One thing is certain: SunCor is motivated to dispose of about $400 million of its $470 million in stated assets. The company has hired some real estate brokers and is interviewing others to sell the unwanted properties, which have been written down in value “to really price them for attractive buyers, even in this down market,” according to Betts.
SunCor’s homebuilding and master-planned communities are in or near Goodyear;
“The master-planned communities are located in markets that have predominantly worked through their housing overhang,” Betts said.
Barclays Capital, an international investment banker, is SunCor’s financial adviser on the disposition of the homebuilding operations.
“We think most likely the buyer will be an investor looking to buy the entire division,” Betts said.
He hopes most of the transactions can be completed by the end of the year and that the sales largely will cover the company’s $175 million in outstanding debt.
The golf courses for sale are in
“We’ve had lots of interest in individual courses by different investors. We may pursue selling them individually or package some of them,” Betts said.
SunCor also plans to sell 62 luxury condos still for sale at its Bridgeview building, the most recent condos built at
Once the selected assets are sold, SunCor will be dramatically smaller.
The company has about 125 full-time employees, plus 325 at its golf courses, Betts said. He expects many of those employees to go with the buyers of the various assets, ultimately leaving about 20 with SunCor.
SunCor sold both of the office buildings it developed at Hayden Ferry. Tower I sold in 2005 for $53 million to CH Realty, an investment fund for Crow Holdings of Dallas. Tower II sold in 2008 for $93 million to New York-based Sumitomo Corp. of
SunCor retained ownership of the parking garage. It also obtained a building permit to begin a third office tower at the northeast corner of Rio Salado Parkway and Mill Avenue, but Betts said it likely will be a year to 18 months before that project breaks ground.
As for building the remaining condo towers that were to be constructed east of Bridgeview, “we may or may not build additional condo towers,” he said. “We may switch to office towers.”
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SunCor Development Co.: www.suncoraz.com