LNR LEADER TOUTS NEWHALL LAND AS ONE OF 2003'S KEY ACQUISITIONS.

Byline: Nicholas Grudin Staff Writer

LNR Property Corp., which has a $500 million stake in the coming Newhall Ranch project, released a first-quarter earnings report citing its position in the Los Angeles County housing market as reason for optimism.

The Miami-based real estate investment firm - which partnered with development giant Lennar Corp. to buy Valencia's The Newhall Land and Farming Company last year - on Wednesday reported net earnings of $28.5 million in the first quarter, or $0.94 per share.

For the same period in 2003, the company reported $34.8 million, or $1.06 per share.

LNR officials said the company's first-quarter performance is strong, and that several recent investments - including the proposed 21,000-home Newhall Ranch project due to start construction in 2006 - have made the past year an unequivocal success.

``Already this year, we have purchased or identified over $800 million of new investments, including the recent closing of the Newhall Land and Farming acquisition with our longtime partner, Lennar Corp.,'' said company CEO Jeffrey P. Krasnoff.

``(Newhall Land) allows us to combine our commercial real estate skills with Lennar's residential expertise and appetite for homesites in one of the country's most land supply-constrained markets. This one transaction alone should add substantial earnings and cash flows for our company for many years to come.''

LNR and Lennar purchased Newhall Land last July for $1 billion. The deal marked the end of an era in Santa Clarita: Newhall Land developed Valencia and essentially built the city.

Despite protests by environmental groups, the acquisition has been ratified and the LNR-Lennar partnership is now in control of Newhall Land's crown-jewel project, Newhall Ranch, one of the largest subdivisions in the history of the West.

Experts agree the Newhall Ranch investment is promising due to the region's short housing supply and fierce real estate market.

``The bottom line is that Los Angeles County is land-constrained and it's only when you get out to Santa Clarita that you find land availability,'' said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. ``This area is very, very well positioned along I-5, with Metrolink, and very close to the Bob Hope Airport. And it has an attractive business base already.''

``It took an outsider to come in and see the true value of Newhall Land,'' Kyser added.

The Newhall Ranch entitlement process was stalled for a decade due to environmental concerns, and activists continue to fight the development, but government agencies have approved the project.

Nicholas Grudin, [phone]

nicholas.grudin(at)dailynews.com

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2 photos

Photo:

(1 -- color -- ran in SAC edition only) The Newhall Land and Farming Company, building these homes near Valencia High, was purchased in 2003 by LNR Property Corp. of Florida.

(2 -- color -- ran in SAC edition only) Newhall Land - purchased last year by LNR Property and Lennar Corp. - continues to build houses in the Santa Clarita Valley, including these homes near Valencia High.

David R. Crane/Staff Photographer