By Iris Richmond. Under the name Richmond American Homes, M.D.C. Holdings is doing something it hasn't done in more than a decade: expand into a new market. Not only that, it's a start-up operation. The Denver-based home builder is moving into Texas, specifically into the big builder-dominated Dallas market.
"Last fall we decided to make the move but felt it was best to hold off until we saw the economy recover," says CFO Paris G. Reece. The company plans to enter a second market later this year though he declines to name it.
Key to entering Dallas, Reece says, was finding the right person to head the operation. That person is John R. Smith, former president of Morrison Homes' Dallas division. His track record--securing a spot for Morrison in eleven communities in 30 months--caught Richmond's eye, and Smith officially joined the company in February. "We haven't done this for a while, so we absolutely had to have the right person," says Reece.
Richmond, the country's 10th-largest builder, enters a market filled with stiff competition, including Lennar, Pulte, and D.R. Horton. "You're playing in the big leagues when you produce in Dallas," says Smith. "There's room only for a quality, well-run organization."
Acquiring finished lots ranks high on the division's list of priorities, but Smith says some development will likely be done as well. Home prices will range from $120,000 to $220,000, a familiar segment for the builder. Consistent with its strategy elsewhere, Richmond aims to become one of Dallas' top five builders. How it will capture market share--and from whom--has yet to be worked out, says Smith.
BIG BUILDER Magazine, April 2002