The Villages is betting big on the municipal bond market to keep its housing boom alive.
The sprawling 57,000-acre retirement empire in central Florida is selling nearly $130 million in high-yield municipal bonds to fund a 2,800-home district, Bloomberg reported. The sale, handled by Jefferies and Morgan Stanley, will bankroll infrastructure for the next phase of The Villages’ long-term buildout, such as roads, bridges, irrigation and 36 new golf holes.
The project is part of a 20-year plan that could swell the community’s population by 60 percent to roughly 260,000 residents by 2045.
The deal comes with notable risk. The bonds are unrated and fall into two of the municipal market’s most volatile sectors: senior housing and real estate. Offering documents warn of potential pitfalls from hurricanes to liquidity shortages. Yet analysts say the project has strong fundamentals with permits secured and steady demand from the retiree pipeline.
Founded in the 1980s by developer H. Gary Morse and still run by his family, The Villages has evolved from pasture and wetlands into a full-fledged city for the 55-and-up set. The master-planned community includes some 60 golf courses, 3,000 social clubs and its own media ecosystem. Rules ban everything from window air conditioning units to political yard signs, though dueling golf cart parades are an election season staple.
Forthcoming homes are expected to average about $400,000, according to bond documents; the community’s broader inventory ranges from $200,000 villas to million-dollar estates. The bonds will be backed by property assessments levied on the new lots, a structure familiar to muni investors who’ve financed past phases of the development.
The Villages has tapped bond buyers before: A separate entity issued $260 million in taxable debt earlier this year, backed by amenity fees and recreation revenues. Those bonds, rated AA-, priced at a 5.2 percent yield.
While the new issue lacks a rating, investors like Lord Abbett’s Daniel Solender expect demand to hold.
— Holden Walter-Warner
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