The company behind an anticipated residential development that helped extend Penhold's northern boundary is getting out of the town's real estate market.
Melcor Developments says it has already received at least four serious inquiries in the past month, after listing the property with RE/MAX Real Estate Central Alberta.
“We're not selling it because we didn't find the community cooperative or viable,” said Guy Pelletier, vice-president of Melcor's Red Deer Region. “It's more of an internal decision.”
After a review of its assets, which include land and property development, commercial and retail business management and four golf courses, the company decided to sell off Lacombe and Penhold interests while continuing to gain a foothold in the Sylvan Lake marketplace.
“Some were determined to be core assets and some fell outside that category,” he said. “It wasn't that the Penhold market changed. I still believe it's a good market.”
Melcor doesn't anticipate big gains or losses on the property. The company sunk a lot of capital into the land, which is situated just north of the Penhold Regional Multiplex. The parcel that's for sale has been annexed into Penhold from Red Deer County and comes with a first phase subdivision plan, Pelletier noted.
“When we purchased it, it was just a raw piece of land,” he said. “We spent a lot of money on it.”
Unlocking the equity in the property was the key factor involved in deciding to sell, he added.
“That's the nature of the business,” he said. “Sometimes you win, sometimes you don't.”
Pelletier said while the company has to ditch Penhold plans for now, they would be interested in returning someday.
“We've focused on projects in communities we're familiar with,” he said. “It would have been our first opportunity in Penhold.”
The Edmonton-based company's stock closed at $18.49 April 6. The price jumped from below $16 in December 2012 to over $20 in January when Melcor announced the creation of a Real Estate Investment Trust.
