Disney Sells Some Magic Real Estate

The Magic Kingdom just got a little smaller.

Walt Disney World is selling off parcels of excess land on the fringes of its complex, allowing developers to pursue their own magic… Central Florida real estate style.

According to the Orlando Sentinel, Disney recently sold 53 acres on Sherberth Road, just south of Disney’s Animal Kingdom, to a real estate developer who will build hundreds of vacation homes and condo units. Another 47 acres on Reams Road, north of the Kingdom, were sold to a home builder, while 30 acres is also up for sale on U.S. Highway 192. As soon as the company re-evaluates its vast Orlando-area real estate holdings, a lot more land may hit the market. The company is currently evaluating all its assets.

Disney owns 27,000 acres in Orange and Osceola counties, most purchased in the 1960s when founder Walt Disney stealthily assembled his holdings before the public learned of his plans to build Disney World. Much of the acreage comprises the area of, and around, Disney’s theme parks, water parks, golf courses, shopping and hotel and time-share resorts between U.S. 192, State Road 429, Reams Road and Interstate 4.

“With such significant land holdings in Central Florida, our strategy is to manage and develop land resources in ways that promote and enhance and complement our core businesses,” Disney spokeswoman Andrea Finger said.

Disney is not talking about the 30-acre tract on U.S. 192, except to say it is in contract. The latest deals are different from those at Celebration or Little Lake Bryan, both fully-planned communities. The company transferred property in both areas to subsidiaries, which developed the communities and sold off the real estate as they were developed. The latest deals would be governed by Orange or Osceola county planning and zoning codes, but would otherwise be outside Disney’s plans.
Susan Lawrence, president of Real Estate Strategies in Orlando, said Disney is finding a great time to sell. Demand is high, supply is tight, and the Florida housing market has reached its peak.

“Like stock, when the prices are extraordinarily high, you’re going to sell, especially if there’s no long-term strategic use for it,” Lawrence said. “That still leaves them with — what? — 26,000-plus acres?”

Last week Disney asked the Reedy Creek Board of Supervisors to begin steps to drop the 30-acre parcel from the agency’s jurisdiction. Reedy Creek, a government agency set up by the Florida State Legislature, provides fire, utilities, emergency medical aid, and other public services to Disney’s property. When Disney sells land governed by Reedy Creek, the company asks the agency to de-annex the land so that new owners would not share the district’s services and would not have say in Reedy Creek affairs.

“They have gone around and looked at the entire property, the perimeter of the property, and said, OK, does this really fit into future development plans or not? And if it doesn’t, is there a market for it?” asked Reedy Creek Executive Director C. Ray Maxwell, who expects to receive more de-annexation requests from Disney.

Centex Homes bought the 47-acre Reams Road property for $4.8 million, even though the company has not yet decided what to do with it.

Sherberth Development Partners paid $15.4 million for the 53 acres, which will be developed by Resorts Development Group. President Steve Parker said his company got an unexpected chance to buy the Disney property just as it was planning a 40-acre development next door. Knowing how rarely Disney has sold its Central Florida holdings, his investors immediately stepped up to buy it.

“We like to think it was real estate genius, but it was really dumb luck,” Parker said. “They said, ‘We just decided today to start selling some of it.’ We said, ‘OK, we’ll buy it.’”