Aetna to Sell Remainder of Homes Division
In a move that will bring it a step closer to getting out of the residential real estate development business in California, Aetna Life and Casualty Co. has agreed to sell the remaining assets of its Irvine-based Ponderosa Homes for an undisclosed amount.
The sale, to a private group headed by Ponderosa’s president, comes just two months after Aetna, of Hartford, Conn., sold the northern division of Ponderosa to a group of its executives.
Ponderosa, a leading California home developer, had sales of more than $263 million in 1984--of which $160 million came from its Southern California operation.
James S. Dailey & Co., a real estate development firm created specifically for this transaction and headed by Ponderosa President James Dailey, will acquire Ponderosa’s 163 employees and its Irvine offices as part of the deal. Before joining Ponderosa in 1983, Dailey held senior positions in real estate development and finance at Aetna.
Dailey also reached agreement with Aetna to manage and oversee completion of Ponderosa’s present Southern California projects and to dispose of undeveloped properties in the state. The Southern California operation, which will continue to be called Ponderosa Homes has approximately 4,000 residential units under construction in Orange, Los Angeles, San Diego and San Bernardino counties.
The Northern California operation had 90 employees and approximately 1,000 single-family homes in various stages of construction at the time it was sold. According to John Jefsen, vice president and general counsel for Ponderosa Homes, “Aetna will be divesting itself of its interest in residential and home building, and while doing so, the people who have worked for Ponderosa or Aetna will now have the opportunity to continue doing what they have been doing . . . for their own benefit.”
Alfred Gobar, a Brea-based real estate consultant, said that while Ponderosa has been successful, Aetna’s motive for shedding the company could have been a desire to improve the value of the giant insurance firm’s stock. Having a home builder among its operations could cause a company’s ratio of price to earnings to fluctuate significantly because of the ups and downs of the home building industry, he said.