Newhall Ranch owner FivePoint raises $320M in IPO

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Shares in Five Point Holdings, LLC, owner of Newhall Ranch and other large planned communities in coastal California, began trading May 10 on the New York Stock Exchange.

On May 15, the company said the IPO was closed and raised about $320 million, after deducting underwriting discounts and commissions and before offering expenses. In addition, FivePoint received $100 million from a private placement to Lennar Corp., which owns 40 percent of FivePoint’s stock.

On May 9, the Aliso Viejo-based developer, better known as FivePoint, said it would issue 21 million shares of common stock in an initial public offering at an opening price of $14 per share. The share price was below the $18-$20 the company had set as a target in a preliminary filing with the Securities and Exchange Commission.

Emile Haddad, the company’s CEO and chairman, and other company executives rang the NYSE’s opening bell at the start of trading May 10.

Citigroup, J.P. Morgan, RBC Capital Markets and Wells Fargo Securities are the lead underwriters of the initial public offering. Deutsche Bank Securities, Evercore ISI, Zelman Partners LLC, and JMP Securities are also underwriting the offering.

FivePoint owns Newhall Land, which developed Valencia over the last half century. Newhall Ranch sits on 15,000 acres near the intersection of state route 128 and I-5. If approved by the state of California and Los Angeles County and fully built out, it could contain 12,000 homes and 11.5 million square feet of commercial and industrial space.

The project would also include seven new public schools, four fire stations, 11 neighborhood and community parks, and a public library. All told, the community is estimated to generate $388 million in annual property tax revenue and $410 million in annual income taxes.

Construction of Newhall Ranch is expected take 20 years once the first shovel hits the ground. Approval of the $12.7 billion dollar project by the state of California and Los Angeles County are still not final.

In addition to Newhall Ranch, FivePoint owns Great Park Neighborhoods in Irvine and The San Francisco Shipyard/Candlestick Point in San Francisco. The communities are planned to include approximately 40,000 residential homes and approximately 21 million square feet of commercial space, plus infrastructure.

 

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