Sun Terra principal Richard Jerman told GrowthSpotter his investors paid $24.25 million on Wednesday for the massive project to satisfy the growing demand for housing in the St. Cloud/Narcoossee market.
"We feel like the market is starting to come into its time," Jerman said. "It's been around for a while, but it hasn't had the kind of success we think it could have. Now is the right time."
Harmony was originally approved as a DRI in 1992 and was entitled for up to 7,200 single-family and multifamily homes, as well as a mix of commercial, office and light industrial uses. The community includes two private lakes and features its own golf course and town center.
Starwood rescinded the DRI in 2016.
The green-certified community even has a pedestrian tunnel under U.S. 192 linking the neighborhood to Harmony High School, and to a new middle school that will open in 2019.
Sun Terra's acquisition includes the golf course, town center and more than 5,800 home entitlements across multiple phases, of which 500 are in Harmony Main -- the focus of current development. More than half of those residential lots are under contract to CalAtlantic, which launched an active adult community there in 2016.
Jerman said Sun Terra plans to kick the Harmony West expansion into high gear with construction starting in the next six months. Starwood initiated the permitting for Harmony West last year and already has approved plans for Phase 1.
"We see an immediate opportunity in Harmony West," he said. "It will contain about 1,600 units and a small amount of commercial. There's an approved plan, but we have the opportunity to do something different."
Jerman believes Harmony West can help satisfy demand from home buyers that have been priced out of the Narcoossee corridor.
"There is a desire for more affordable housing, and we think we can provide that in Harmony West," he said. "We're not talking about starter homes. But you used to be able to find a single-family home on the Narcoossee corridor in the $225,000 to $250,000 range. It's all escalated now into the $300,000s. We're a little farther out, so we can meet that price point."
In addition to the CalAtlantic project, Harmony Main offered homes by Lennar, Meritage, Richmond American Homes, D.R. Horton and Regatta.
"Harmony Main is an established community," Jerman said. "We have visited with most of the significant builders in the marketplace and said what do you want to see in Harmony West? We have multiple LOIs."
The Harmony master plan also includes Harmony Central, which is adjacent to Harmony Main and has 283 lots. Following that, the developer will launch Harmony East, which is entitled for more than 3,500 units.
The Harmony deal is Sun Terra's largest in 2017. The land banking specialist, with backing from New York private equity firm JEN Partners, paid $26.7 million last year to buy the former "San Pedro Center" land in south Seminole County from the Catholic Diocese of Orlando. That project was subsequently sold to Meritage.
The Harmony transaction is Osceola County's largest land sale this year, following two big ticket sales earlier this month -- Magic City ($20 million) and the 4H Ranch ($18.5 million).
"It's very unusual to have three land sales of that size in one month," Osceola County Property Appraiser Katrina Scarborough said. "If you take the 4H Ranch out of the equation -- because it's going to continue to be a ranch -- I think the other two are pretty indicative of what's going on in Osceola County. We're one of the fastest growing counties in the nation."