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One of Las Vegas’ biggest homebuilders is getting even larger

Lennar Corp., one of the biggest homebuilders in Las Vegas and the country, is getting even larger.

The Miami-based builder is buying CalAtlantic Group, a Virginia builder born of a separate merger just two years ago.

Lennar’s $9.3 billion buyout, which includes the assumption of $3.6 billion in debt, is expected to close in the first quarter of 2018, according to Monday’s announcement.

Their combination, they said, will create the largest homebuilder in the country.

Las Vegas’ homebuilding industry is dominated by out-of-state, publicly traded companies, with Lennar and CalAtlantic among the top sellers in town. But what does one big fish gobbling up another mean for house prices? And how will it affect other builders in the valley?

(Las Vegas Review-Journal)

Given that the deal is less than a week old and at least two months from being finalized, it’s too early to tell exactly what impact it might have in Southern Nevada, a region that accounts for a fraction of both builders’ total sales.

For those worried that the loss of a big competitor will lead to higher prices, it’s worth noting that builders are already fetching record prices in Las Vegas this year amid rising demand, increased construction costs and a shrunken inventory of homes for sale.

Home Builders Research founder Dennis Smith said he’s not expecting much change in prices as a result of the buyout. Locally, CalAtlantic tends to build on smaller lots, he said, letting Lennar “expand their presence in the more-affordable part of the marketplace.”

He wasn’t sure how much the deal would affect other builders. At the very least, as he noted, it means there’s “one less builder in town.”

As of Monday, Lennar had closed almost 700 new-home sales in Clark County this year, third-best locally. CalAtlantic was sixth with about 440, according to Smith’s data.

Las Vegas builder Larry Canarelli, founder of American West Homes, said he doesn’t think the merger by itself will push up house prices. Still, he figures he’s better off with one less competitor, even if the one that bought it is bigger than before.

CalAtlantic, formed through the 2015 merger of The Ryland Group and Standard Pacific Corp., delivered about 14,230 homes last year. Lennar, however, delivered around 26,560 in the 12 months ending Nov. 30, 2016.

“You couldn’t be much stronger than Lennar already was,” Canarelli said.

Rising Prices

Las Vegas home prices were among the fastest-rising in the nation in August, a report said this week.

According to the S&P CoreLogic Case-Shiller Indices, local home prices were up 8.6 percent year-over-year, second-fastest among 20 metro areas listed in the report.

Seattle led the pack at 13.2 percent. Nationally, prices were up 6.1 percent.

“Home price increases appear to be unstoppable,” David Blitzer, index committee chairman at S&P Dow Jones Indices, said in a statement Tuesday.

But the rise “poses questions of why prices are climbing and whether they will continue to outpace most of the economy,” he added.

Low mortgage rates and the improved economy are “supporting” prices, he said. But prices “will not rise forever,” and measures of affordability “are beginning to slide, indicating that the pool of buyers is shrinking.”

AC firm gets new HQ

Goettl Air Conditioning owner Ken Goodrich recently announced that he bought a new headquarters for his heating and air-conditioning services firm.

Goodrich acquired a 53,000-square-foot industrial building at 6521 W. Post Road in the southwest valley. The $6.6 million purchase closed Sept. 28, property records show.

The building will undergo nearly $2.6 million worth of renovations and tenant improvements, according to the news release.

Goettl is currently based at 8311 W. Sunset Road, about 2 miles away, and plans to open the new headquarters in January.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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