Developer's belly up is heads up for rest of us

    A real estate agent friend sent me a note about Grey Rock, a community near Lake Lure in North Carolina.  Grey Rock closed its operations last week after three years.  Only three homes have been built at Grey Rock, one of them a House & Garden TV Dream Home.  Grey Rock's developer, Land Resource, also closed six other of its sales offices and laid off a total of 70 employees.
    Although not a golf community -- it is just down the road from Queens Gap, another fledgling community with a Jack Nicklaus Signature course under

Grey Rock had sold more than 400 lots in just three years.

construction -- Grey Rock's bad fortunes are a good reminder of the importance of homework and calling on professionals who know these local areas and the idiosyncrasies of building there. 

    Grey Rock looked promising from its earliest days of operation, and scoring the HGTV Dream Home was a big coup that added luster to its marketing efforts.  It had an experienced developer behind it in Land Resource, which has been in operation since 1997 and whose CEO had experience in the luxury resort business.  Grey Rock sold more than 400 lots in its first few years, not bad in the softening market, but it ran into problems with its infrastructure.  Some of its road construction caused significant soil erosion issues, and Land Resource was fined by the state enviros and then sued by some of its own landowners whose home sites were soiled with extra soil. 

    The pressure from inside and out, plus the eroding market, apparently did the company in.  As in most of these deals, the early investors - many of them pure play speculators -- are the losers when a developer goes belly up.  But we should feel less sorry for them than for the 25 employees at Grey Rock who won't find landing another job easy in the remote Lake Lure area.
    Land Resource's web site is not functioning except for its home page.  Its statement of purpose on the home page ends with the line, "A great eye for beauty combines with a thorough knowledge of property infrastructure to create communities that are wonderfully distinctive and built to endure."  For the sake of those owning property at Grey Rock, we hope the community does endure.  But it will almost certainly be under new ownership.


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