Orange County Register

The man who bailed out Michael Jackson’s Neverland Ranch is now coming to the aid of Orange County homebuilding lengend William Lyon.

Tom Barrack’s Colony Capital and its new Colony Financial — formed to make real estate bets near the bottom of this ugly cycle — will arrange up to $206 million in fresh funding for William Lyon Homes. LA-based Colony Capital has has invested more than $39 billion in over 8,800 assets in its history.

Lyon Homes intends to use the proceeds to “repurchase debt and restructure its balance sheet, as well as for opportunistic land acquisitions and general corporate purposes.” In an era where builders are desperate for cash — the Irvine Co., for example, is self-funding its latest building project at Woodbury in Irvine – the Barrack investment is highly noteworthy.

• Says Colony founder/chairman Barrack: “With more than 50 years of experience in the homebuilding industry, William Lyon Homes has built an envious operating record through multiple housing cycles. We believe in the long-term fundamentals of the industry and are encouraged by the recent improvement in housing fundamentals. General Lyon has built a superb company and a best-in-class management team, which is well-positioned to take advantage of extremely attractive opportunities the industry has not seen for several decades.”
• Says Gen. William Lyon, CEO of Lyon Homes: “Colony`s excellent reputation and long history of success in real estate financing make them the ideal partner.”
• His son, Bill H. Lyon, Lyon Homes president, says the fresh cash provides, “the resources and flexibility to capitalize on opportunities in the marketplace and to continue with our strategic initiatives.”
• Colony CEO Richard Saltzman says: “We are pleased to have the opportunity to execute such a significant high-yielding, quality investment just three weeks after our initial public offering. We are being selective in our asset allocation, focused on building the optimal portfolio for the long term.”

In 2008, Colony bought a $24 million mortgage on late pop star Michael Jackson’s Neverland Ranch just before a foreclosure auction was scheduled for the singer’s remote residence near Santa Barbara. A veteran real estate investor, Barrack gained fame in the real estate world for an early exit from property investments before the real estate crash, saying in one interview: “There’s too much money chasing too few good deals, with too much debt and too few brains.”

Lyon has had some ups and downs of late …

• O.C. builder made money for the first time in 2-1/2 years
• Homebuilder’s condos selling fast in Irvine
• O.C. homebuilder unloads corporate jet

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