Forestar Group

Forestar Group Inc. is a United States real estate company focused primarily on acquiring entitled land and developing finished residential lots for sale to homebuilders. Based in Arlington, Texas, the company operates through a single real estate segment and concentrates on single-family residential communities. Its customers include local, regional, and national homebuilders, while its operating model emphasizes geographically diversified investments, phased development, relatively short project durations, and efficient asset turns. The company's corporate history reaches back to 1955, when Lumbermen's Investment Corporation was incorporated. Its activities developed over time around land ownership, residential and commercial real estate, and related resource assets, with a particularly strong historical presence in Texas. In 2006, the business adopted the Forestar (USA) Real Estate Group name, and in 2007 Temple-Inland distributed all outstanding Forestar common shares to Temple-Inland shareholders, establishing Forestar as an independent publicly traded company. Forestar's land-development process generally begins with market research, due diligence, land acquisition, and the securing of development rights, commonly called entitlements. Once a site has an acceptable development plan and lot count, Forestar undertakes infrastructure and site work to create finished lots that can be sold to builders. The company also uses lot banking and may hold undeveloped land or finished lots for relatively short periods with the intention of selling them. This model allows Forestar to participate in housing-market growth without operating primarily as a vertical homebuilder. The company has maintained long-running real estate ventures with other developers. In 1991, it and Cousins Properties formed Temco Associates, LLC to develop residential sites in Georgia. In 2002, the companies formed CL Realty, L.L.C. for residential and mixed-use development in Texas and the southeastern United States. Forestar opened an Atlanta-area office in 2001 to oversee land with long-term development potential, supporting its expansion beyond its Texas base. Forestar also briefly broadened its activities beyond real estate. In 2012, it acquired CREDO Petroleum, an oil and gas exploration, development, and production company with interests covering more than 135,000 net mineral acres. The transaction reflected the company's historical connection to land and natural-resource assets, although its principal identity and operating focus became residential lot development. A major change came in October 2017, when Forestar became a majority-owned subsidiary of D.R. Horton, one of the largest homebuilders in the United States. Immediately after the merger, D.R. Horton held approximately 75 percent of Forestar's outstanding common stock; the reference material reports ownership of approximately 65 percent at December 31, 2020. The companies entered into a stockholders' agreement, a master supply agreement, and a shared services agreement. The relationship gives D.R. Horton access to a large land-development platform while Forestar continues selling lots to a broader set of homebuilders. By the twelve-month period ending December 31, 2020, Forestar reported operations in 51 markets across 21 states and delivery of 11,518 residential lots. Its strategic positioning is that of a national, production-oriented land developer operating in the fragmented U.S. lot-development industry. Rather than focusing on a single local market, Forestar seeks scale through geographic diversification, disciplined land acquisition, phased projects, and repeat transactions with homebuilders. Its public-company structure and D.R. Horton relationship distinguish it from private regional developers, while its focus on finished lots distinguishes it from builders that primarily construct and sell completed homes.

Forestar Group's origins are traced to Lumbermen's Investment Corporation, incorporated in 1955. The business developed a long history in land ownership and real estate development, especially in Texas, while also participating in residential, commercial, and resource-related activities. Its later identity was shaped by the separation of Forestar from Temple-Inland and by the company's transition toward a focused residential lot-development model. In 1991, Forestar and Cousins Properties Incorporated established Temco Associates, LLC to develop residential sites in Paulding County, Georgia. The companies later formed CL Realty, L.L.C. in 2002, extending their development activities into Texas and the southeastern United States through residential and mixed-use projects. Forestar opened an office in the Atlanta area in 2001 to manage nearby land and evaluate its longer-term development potential. These activities reflected a strategy of acquiring and holding land with the prospect of future entitlement and development. The company changed its name in 2006 to Forestar (USA) Real Estate Group Inc. At that time, Temple-Inland reported Forestar Real Estate Group as a separate business segment. On December 28, 2007, Temple-Inland distributed all issued and outstanding Forestar common shares to its shareholders. The distribution made Forestar an independent public company and created a separate platform for its real estate operations. Forestar expanded into oil and gas in September 2012 by acquiring CREDO Petroleum, an exploration, development, and production company with leasehold interests in more than 135,000 net mineral acres. The transaction added a natural-resources business to the company's real estate activities. Over time, however, residential land development became the central operating identity of the company. Forestar's operating model centers on acquiring property after due diligence and after obtaining, or assessing the feasibility of obtaining, the entitlements required for development. It then prepares land for homebuilding by installing infrastructure and creating finished lots. Most projects involve single-family residential communities. Finished lots are sold mainly to homebuilders, including local, regional, and national companies. Forestar also undertakes lot banking and may hold undeveloped land or completed lots for short-term resale. In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. D.R. Horton owned approximately 75 percent of Forestar's outstanding common stock immediately after the transaction, while the reference material reports approximately 65 percent ownership as of December 31, 2020. The companies entered into a stockholders' agreement, a master supply agreement, and a shared services agreement. The transaction connected Forestar's land-acquisition and development platform with the largest-volume U.S. homebuilder described in the reference material. Following the transaction, Forestar continued to operate as a separately traded public company while functioning within D.R. Horton's majority-owned corporate structure. Its strategy emphasized market expansion, geographic diversification, phased projects, and efficient capital deployment. For the twelve-month period ended December 31, 2020, Forestar reported activity in 51 markets across 21 states and delivery of 11,518 residential lots. The company's historical development is therefore best understood as a progression from a diversified land and real estate enterprise to a national residential lot developer aligned with a major homebuilding group.

• 2020

  National platform reaches 51 markets

  [1]Forestar Groupen.wikipedia.org

  Forestar reports operations in 51 markets across 21 states and delivery of 11,518 residential lots during the twelve months ended December 31.

• 2017

  D.R. Horton becomes majority owner

  [1]Forestar Groupen.wikipedia.org

  Forestar becomes a majority-owned subsidiary of D.R. Horton following a merger-related transaction.

• 2012

  CREDO Petroleum is acquired

  [1]Forestar Groupen.wikipedia.org

  Forestar acquires CREDO Petroleum, adding oil and gas exploration, development, and production interests to its portfolio.

• 2007

  Forestar becomes an independent public company

  [1]Forestar Groupen.wikipedia.org

  Temple-Inland distributes all issued and outstanding Forestar common shares to its shareholders on December 28, creating an independent listed company.

• 2006

  Company adopts the Forestar name

  [1]Forestar Groupen.wikipedia.org

  Lumbermen's Investment Corporation changes its name to Forestar (USA) Real Estate Group Inc.

• 2002

  CL Realty is formed

  [1]Forestar Groupen.wikipedia.org

  Forestar and Cousins Properties form CL Realty, L.L.C. for residential and mixed-use development in Texas and the southeastern United States.

• 2001

  Atlanta-area office opens

  [1]Forestar Groupen.wikipedia.org

  Forestar opens an office in the Atlanta area to manage nearby land and assess its long-term real estate development potential.

• 1991

  Temco Associates is formed

  [1]Forestar Groupen.wikipedia.org

  Forestar and Cousins Properties establish Temco Associates, LLC to develop residential sites in Paulding County, Georgia.

• 1955

  Lumbermen's Investment Corporation is incorporated

  [1]Forestar Groupen.wikipedia.org

  The corporate lineage of Forestar Group begins with the incorporation of Lumbermen's Investment Corporation.

A geographically diversified U.S. residential land developer focused on acquiring entitled property, converting it into finished lots, and selling those lots to homebuilders. Forestar emphasizes short-duration, phased projects, capital efficiency, and asset turns rather than direct construction of most completed homes.

• Residential land development

  Finished residential lots

  Forestar's principal offering is the finished residential lot: land that has been acquired, entitled, and prepared for construction by a homebuilder. The company generally sells these lots to local, regional, and national builders rather than constructing most completed homes itself. Projects are often organized as phased single-family communities, allowing capital to be deployed and recycled as lots are delivered.

• Land acquisition and entitlement

  Entitled residential land

  Forestar acquires land after due diligence and focuses on property with development rights, or entitlements, that support an acceptable number of future residential lots. Entitled land forms the basis of the company's development pipeline and helps reduce the uncertainty associated with acquiring wholly unplanned property.

• Real estate finance and development

  Lot banking

  The company makes short-term investments in finished lots through lot-banking arrangements. These transactions are intended to support homebuilding activity while allowing Forestar to earn returns from land development and disposition without maintaining every lot as a long-term asset.

• Residential community development

  Single-family residential communities

  Most Forestar projects are single-family residential communities. The company typically acquires and develops sites in phases, coordinates infrastructure and lot delivery, and sells the resulting lots to builders that construct homes for individual buyers.

• 2017

  Join D.R. Horton's majority-owned structureM&A

  Background

  Forestar was operating as a public real estate company with a growing residential land-development platform. D.R. Horton sought a strategic relationship with the company and became its majority owner in October 2017.

  Action taken

  Forestar entered the merger-related ownership arrangement, under which D.R. Horton initially owned approximately 75 percent of Forestar's outstanding common stock. The parties also signed a stockholders' agreement, a master supply agreement, and a shared services agreement.

  Aftermath

  Forestar continued as a separately traded company while operating as a majority-owned subsidiary of D.R. Horton. The relationship aligned Forestar's land-development activities with D.R. Horton's homebuilding network.

  Source

• 2012

  Acquire CREDO PetroleumM&A

  Background

  Forestar historically held interests in land and natural resources in addition to its real estate activities.

  Action taken

  The company acquired CREDO Petroleum, an oil and gas exploration, development, and production business with leasehold interests in more than 135,000 net mineral acres.

  Aftermath

  The acquisition expanded Forestar's resource-related activities, although residential lot development remained the company's principal operating focus in the later reference period.

  Source

1. 1Forestar Groupen.wikipedia.org
2. 2Forestar Group official websiteforestar.com