In March, Boca Raton, Fla.-based Centerline Homes celebrated its 15-year anniversary, and, according to founder and president Craig Perry, the privately held company had its best year yet in 2007 with $230 million in revenue. Unlike most, Perry shunned the go-and-grow mentality of recent years. In March, he spoke with senior editor Lisa Marquis Jackson and news editor Sarah Yaussi about today's opportunities and challenges.
BB: Centerline has been in business for 15 years. What did you do before that?
CP: I was the controller for another home builder during the formative years when the company was really growing. Today it's a very substantial company, but when I started, there were about 12 people there. When that's the case, you are doing a little bit of everything. I helped set up construction and purchasing departments, and I got involved with the banks and investors. On the side, I had started a cellular telephone company, and eventually, I had to leave home building and go run that because it got big quickly. I ended up selling it off to a public phone company. Then I had a little bit of capital to get back into this business.
BB: What's your strategy?
CP: The only way you can really grow the business is to go to a market, become the dominant player, and then you go to the next. You have a good business practice. I don't know if it's scalable, but certainly no one has done it well. We have been the same size, in the 500-plus range, for the last five years. We did 809 once, and that was ridiculous, but that was 2005. We did 507 [in '07] and 535 the year before. We'll do 400 this year because we just don't have any communities. We are really running out of land.
BB: It's a good time to be in that position.
CP: It's a great time–the whole thing works really well. You can restructure deals, do takedowns again, and set things up so it's good for both parties. You don't have to squeeze a guy for every nickel. Business is supposed to be about win-win relationships.
BB: So are you content to stay at 500 homes a year forever?
CP: Yes, we are at that threshold where we aren't small and we aren't big. But our balance sheet is clean, banks like us, and we talk the right language. We haven't had any difficulties. We are on top of the marketing aspect of it. We constantly shop the competition, we know exactly what is going on, and we buy our products right so we can make a profit.
BB: How did you manage through the tough times when the mortgage market fell apart?
CP: I took my CFO and said, "You are now the head of the mortgage group. You need to hold the banks' and customers' hands. We need to figure out where the products are." We had a tough time, but we got through it.
BB: If you aren't under oppressive financial pressures, what is your biggest challenge?
CP: How do you motivate and keep retooling so you can move through your product? That's probably our biggest issue. The way we look at it is that you can buy your way into it. You can buy your way into sales by buying land at a better price and being able to offer a better price. You market to the guy next door, because usually it's a public company and they're going to undercut. So you market to them and know they are losing money on every house they are selling, and we're making money.
BB: How do you decompress outside of the office?
CP: I have three kids that are 14, 12, and 10, so my life revolves around what they do. Literally, five days a week I am either at the soccer field or some event. It's family time and work. But we do like to travel a lot. We ski a couple of times every year.
BB: So are you sticking with skis, or do you snowboard?
CP: The kids snowboard. I skateboarded as a kid so I get the concept. But you fall down a lot more, and it hurts a lot more, so I prefer the skis. At this point in my life, I'm just trying not to hurt myself.