A piece of state-owned land in north Phoenix’s popular Desert Ridge area sparked an hour-long bidding war between home builders Wednesday. Winning bidder D.R. Horton Inc. paid $79 million.
The 269-acre parcel, east of 56th Street and north of Deer Valley Drive, was appraised for $54 million. Four builders bid for it.
It's the priciest Arizona state land sale since builders Taylor Morrison Home Corp. and Pulte Homes partnered to pay $100 million for 410 acres in Desert Ridge in March 2016. The partnership was the only bidder for that site.
Builders Lennar, Shea Homes and Blandford Homes were the other three bidders at Wednesday's auction. All had to bring a cashier's check for $16 million to bid.
"Mature assets such as this parcel, when sold, provide opportunities for economic growth for not only the (State Land) Trust beneficiaries but also contribute to economic growth for all Arizonans," State Land Commissioner Lisa Atkins said about the sale.
Proceeds from the sale will go toward K-12 public education.
D.R. Horton, the largest homebuilder in the U.S., hasn't yet announced its plan for the site. The builder has several subdivisions underway across metro Phoenix. Its communities Rancho Cabrillo in Peoria, San Tan Heights in Queen Creek and Via Sorento in Gilbert ranked among the top 10 Valley subdivisions for the most home sales last year.
Nathan & Associates and Land Advisors Organization brokered the state-land deal for D.R. Horton.
Homebuilding has yet to recover from the crash in metro Phoenix. About 18,000 houses went up Valley-wide last year, according to Belfiore Real Estate Consulting. That's the best year since the crash, but that figure equals about one-third of the new houses built during the boom year of 2005.
The Desert Ridge area has been one of the Arizona Land Department's most lucrative sites. During the boom Desert Ridge land brought record prices, but some developers walked away from those deals during the crash.
Land broker Ross Smith with Marcus & Millichap was at the auction representing Shea.
He said the Desert Ridge site drew so many bids because it is "outstanding" but also because the state land agency is offering more favorable terms to buyers.
D.R. Horton was required to put 10 percent down on the parcel it's paying $79 million for and has three years to pay off the balance.
The State Land Department is charged with managing more than 9 million acres across Arizona and selling parcels to the highest bidder to benefit public elementary and high schools.