Every once in a while, a volume home builder develops a process to produce more home for the money at less cost per square foot.
That doesn't happen too often. But when it does, you see a builder who can do it repeatedly go places. This is exactly the case for Atlanta's current No. 1 private home builder in the market, Smith Douglas, which this week announced it's got dirt and plans new operations in Birmingham, Ala., and Raleigh, N.C., and has near-term designs on being one of the Southeast's major regional powerhouses before it's done carrying out its manifest destiny strategy.
"We're building a durable private entry-level home building regional power, along the lines of a Highland Homes, a great family-run company that's one of Texas's most important home builders, and Shea Homes," says Charles Schetter, who just re-united with Smith Douglas founder and owner Tom Bradbury as chief executive of the fast-growing enterprise.
Bradbury's move to grow sparked a reunion with Schetter--who in 2003 led an acquisitions team from KB Home that acquired another company Bradbury built from scratch 28 years earlier, Colony Homes, which operated then in Atlanta, Charlotte, and Raleigh. Heading up Colony's Raleigh unit at the time of the acquisition was Greg Bennet, who also rejoins the Smith Douglas team as chief operating officer.
Not surprisingly, one of the appeals of Colony Homes to KB apart from its land asset footprint was its process, which then ceo Bruce Karatz described as an "efficient operating systems [that] mirror[s] our own."
That's what Smith Douglas has going for it today, which allow it to thrive in the Atlanta "10-to-2" vector with 25 or so current communities, 1,400 or so controlled (on option) lots, and homes ranging from the low-$100s to the mid-and upper $200s.
"We build our most popular model at $33 per square foot, but when you go through our homes, you look at the quality and wouldn't believe it could be that," says Schetter. "Our scheduling and efficiency system is like no other I've seen," he says.
This past Spring BUILDER noted that Smith Douglas was one of its fastest-growing companies of in its BUILDER 100 rankings.
And Schetter has seen a few. He spent 27 years as a McKinsey & Company consultant, and on one of his latter assignments there he met Karatz, who invited him on board as a business development, acquisitions, and land development rainmaker.
Schetter has found that the Smith Douglas process and former Colony people go hand in hand, so part of his recruitment efforts of the moment involve calling up some of those Colony Homes talents of yesteryear to invite them to work their magic for another go at growth.
Industry like Ivy Zelman have been calling out the crying need and great opportunity for builders who can meet the need for affordable entry-level homes.
It looks like Smith Douglas is ramping up to answer the call; Schetter says more market expansion announcements will be coming in the months ahead.
A "re-Colonization" of sorts.