Russian immigrant A.P. Orleans started Orleans Homebuilders in 1918 and eked the operation through the Great Depression. A long-time builder in the Philadelphia area, Orleans moved into Florida in the 1970s. In the past six years, it's entered North Carolina, South Carolina, New York, Illinois, and Virginia and is now the 38th largest home builder in the country. CEO and president Jeffrey Orleans, A.P.'s grandson, is the third generation to lead the company. He spoke with senior editor Judi Hasson about Orleans' plans and prospects.
BB: Do you think the “worst is behind us” as you said in one of your recent conference calls?
JO: The worst is behind us in most markets. Miami Beach, Las Vegas, and Arizona aren't the same as Philadelphia. California is different than the East Coast. The worst is definitely behind us in suburban Pennsylvania and New Jersey. In 1981, I wasn't so confident. In 1982, interest rates were 22 percent. I look at this as more like a cold, but this too will go away.
JO: We start homes every fall. Typically, people want to move in the spring or summer for the next school year. We have inventory that needs to be built. We are starting up in Arizona [in the Phoenix area], which is probably not the best time to start. We spent a couple of years looking to buy a company [but] ended up buying 260 lots. We're putting our toes in the water. We didn't buy companies marked up. Right now, it's time to sit back, wait, and use up the inventory that we have.
BB: You consolidated your Florida operation. Planning to stay in Florida?
JO: Absolutely. There is no question in my mind that Florida is going to continue to grow. We got ourselves in a little trouble because we were building for investors. What we are going to do is make sure our focus is not on investor-type markets.
BB: What's your favorite Orleans community and why?
JO: Lambertville, N.J. We designed the product from scratch. It fits there. We spent a lot of personal time making sure that community was what we wanted it to be.
BB: What gives you the drive to keep going and working despite tough times?
JO: A lot of things are different about our company. I like what I'm doing. Most of the big builders that are public don't own the same percentage that I do—62 percent of the company—so I have a much longer horizon than if I was a CEO looking to make money from stock. I'm not selling when it's up and when it's down.
BB: You are very active in philanthropic efforts in Philadelphia—the orchestra, the police foundation. Can you tell me why?
JO: I can't live my lifestyle until I give back.
BB: Your grandfather founded the company in 1918, and you are the third generation to lead the company. Tell me about your grandfather and your father and the legacy they left to you?
JO: My grandfather was sent to a school in Philadelphia called Dr. Brown's where you could get a medical license. Fortunately for me, the sight of blood made him queasy. He started building in the 1920s: He kept paying the banks, and the banks actually put him in business. My father became a captain and Air Force pilot, highly decorated in World War II. In the 1950s, the company prospered when soldiers came home from war. We had a family business. At one point we had cousins, aunts, uncles in the business. My grandfather worked until he was 93. He was my tutor and mentor. Every day, we would talk. ‘This is how you do this; this is how you screw this up,' he would say. On my 30th birthday, he told me, ‘So far, so good.' I think he would be thrilled that we've done as well as we have.