J.F. Shea Unit Plans to Acquire UDC Homes of Ariz.

Expanding its presence in Southern California and Arizona, the home-building division of Walnut-based J.F. Shea Co. said Friday that it has agreed to acquire UDC Homes, the largest home builder in Phoenix and a major developer of housing for seniors.

Privately owned Shea--one of the largest home builders in the region--plans to acquire Tempe, Ariz.-based UDC in an all-cash deal, but did not disclose the purchase price. UDC, which owns lots for nearly 1,600 new homes in Southern California, was being sold by DMB Associates of Phoenix and Boston-based AEW Capital Management.

“We look forward to joining forces with UDC, further strengthening our home- building and land development team,” said Les Thomas, president of Shea Homes Southern California.

“The UDC acquisition gives them the opportunity to expand even further into Southern California and also to have a much stronger presence in Arizona,” said Michael Meyer, managing partner of the Orange County office of E&Y; Kenneth Leventhal Real Estate Group. “That gives them great coverage of the Pacific Southwest.”

UDC’s Southern California presence includes Ventura, Riverside, and San Bernardino counties as well as northern Los Angeles County. Shea was also attracted by UDC’s developments for seniors around San Jose and Arizona, Thomas said.

“It’s a market that we have been looking at for several years,” Thomas said of the senior housing communities. “This allows us immediate entry.”

Shea is already a major builder in Orange County. Last year, the company purchased Mission Viejo Co. and its 900 acres of undeveloped land in Mission Viejo and Aliso Viejo. The sale also included Mission Viejo Co.’s 4,500-acre Highlands Ranch, a master-planned community south of Denver.

“Shea came through the tough [recessionary] times very strong, and they have been pursuing a brilliant strategy of expanding strategically into Colorado and Orange County,” Meyer said. “They been able to go into these [new markets] and create more value than was previously there through intelligent planning, development and marketing.”

DMP Associates, a real estate developer, purchased UDC in 1995 after UDC had filed for bankruptcy. UDC built approximately 2,000 homes in the Phoenix area last year. UDC’s staff and operations would be merged into Shea’s home-building division.

Shea--whose parent company is involved in numerous large commercial building projects--completed more than 3,000 homes last year and generated more than $1 billion in home-building revenue.