Venturing onto ground where few thrifts dare to tread these days, a Florida thrift holding company is entering the real estate development business.
BankAtlantic Bancorp has agreed to buy Oriole Homes Corp., a South Florida real estate developer and one of the largest builders of retirement communities in the state.
While real estate is new to BankAtlantic, it's well-worn territory for BankAtlantic's chairman, Alan B. Levan. He was chairman and chief executive officer of a real estate company before joining BankAtlantic in 1987.
"If someone were to say to me, 'I know a $2 billion thrift that's going into real estate development,' I'd say, 'Don't they realize that everyone that went into it went broke?'" said Samuel J. Beebe, a bank analyst at William R. Hough & Co. "But Levan's been there; his whole background is real estate before he took over BankAtlantic."
The Fort Lauderdale-based holding company, parent to $2.61 billion-asset BankAtlantic, will buy a controlling interest in Oriole for $22.4 million. The deal is expected to close within 60 days.
BankAtlantic officials said the company is trying to diversify and increase its sources of noninterest income.
"We've been on a strategic objective of increasing noninterest income to about 25% of gross revenues over a five-year period," Mr. Levan said. "We've now reached that and have expanded the goal to 35%."
Mr. Levan achieved notoriety in 1991 after an ABC News broadcast portrayed him as underhandedly selling bad real estate securities. After winning a $10 million libel verdict last year against ABC and leading BankAtlantic to record earnings, however, he feels the move into real estate will not revive the controversy. ABC is appealing the verdict.
Adding to BankAtlantic's real estate acumen is vice chairman John E. Abdo, who is also president of Wellington Construction and Realty Inc. Mr. Abdo will assume operating responsibility for Oriole. The home building company constructs lower-priced houses and condominiums for people 55 and older.
Elizabeth A. Summers, first vice president at Ryan, Beck & Co., said the deal was opportunistic on BankAtlantic's part.
"They know the (real estate) market, they know the builders, they know the family that owns this company and have known them for many years," she said. "This means that they were in a position to recognize when the family was in a position to sell out."