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St. Joe (JOE) to Develop New Homes in Watersound Origins

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Recently, The St. Joe Company (JOE - Free Report) , through its subsidiary —The Watersound Company, LLC — entered into a deal with Kolter Acquisitions LLC to develop new homes in the Watersound Origins Community. Kolter Acquisitions LLC is a subsidiary of Kolter Homes, LLC.  The deal consists of a long-term contractual agreement, per which Watersound will construct finished lots for Kolter.

The finished lots are slated to be developed in a number of phases. Construction will likely commence in 2019, while homes are expected to be made available for sale in 2020. The development shall also include a new community clubhouse, along with sport courts and a pool.

Notably, this is Kolter’s second big development in the Watersound Origins Community and will comprise around 466 single-family detached homes.

St. Joe intends to diversify its product offerings and capitalize on the rising demand for homes in the Watersound Community. For this, St. Joe plans to partner with Kolter in the future as well.

At present, the above-mentioned community has around 240 complete homes, 27 homes under construction and 51 homesites. In addition, 360 homesites are under development in its Stillwater neighbourhood, bookings for which are expected to begin soon.

Lately, St. Joe also entered into a lease agreement with Sacred Heart Health System for development of a healthcare facility in Watersound Origins Community. This is part of the company’s strategy to develop the Watersound Origins and Breakfast Point Communities to generate long-term dependable revenues. However, the company’s business concentration in Northwest Florida and competitive pressure remain concerns.

St. Joe’s shares have gained 0.8% in the past six months compared with the industry’s gain of 0.7%, during the same period.


 

St. Joe currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

A few better-ranked stocks from the Real Estate space include NorthStar Realty Europe Corp. (NRE - Free Report) , City Office REIT, Inc. (CIO - Free Report) and Clipper Realty Inc. (CLPR - Free Report) . While NorthStar Realty flaunts a Zacks Rank of 1, City Office REIT and Clipper Realty carry a Zacks Rank of 2 (Buy).

NorthStar Realty’s Zacks Consensus Estimate for 2018 funds from operations (FFO) per share has been revised 5.5% upward over the past 30 days. Its shares have rallied 35.1% in the past six months.

City Office REIT’s FFO per share estimates for 2018 inched up 1.8% over the past 30 days. Its shares have appreciated 22.8% over the past six months.

Clipper Realty’s FFO per share estimates for the current year moved 7% north in the past 30 days. Its shares have gained 34% in six months’ time.

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