Sacrifice and countercyclical decisions are paying off for Boulder Creek Builders, a Colorado builder specializing in patio homes and townhouses. This year, as sales fluctuate dramatically for many builders, Boulder Creek expects its closings to more than double to 78 units and its revenue to rise by nearly 60% to $19 million. David Sinkey, one of Boulder Creek’s four owners, whose father started the business as Cliff & Associates in the mid-1970s, attributes his company’s recent success to the willingness of its partners to resist the temptation to spend profligately on land or themselves, and to focus instead on repositioning the business for recovery.
That effort dates back to early 2008, when market conditions were eroding, and most local builders were retrenching. “There was a complete void in marketing among our competitors,” says Sinkey. That’s when he and his partners decided the time was right for rebranding.
At the time, the company operated as Cessna & Associates, and it was struggling with “name confusion” among its customers, recalls Lance Jackson, a Denver-area marketing consultant who has worked with such builders as Richmond American, Del Webb, and Shea Homes. Jackson says Boulder Creek’s owners could also see that its communities lacked “continuity” and may have been succeeding “in spite of themselves.”
Jackson says Boulder Creek’s team “is tremendous at being able to see beyond the here and now.” He came up with a marketing strategy, which the company introduced in June 2008, that presented Boulder Creek Builders as a facilitator of its buyers’ lifestyles. He created a marketing tagline “Life First, Homes Second To None,” and a brand for the builder’s communities, Boulder Creek Life and Home, which he devised based on psychographic segmentations of each neighborhood and their prospective customers.
Through their homeowner associations, these Boulder Creek communities—whose houses range from $125,000 to more than $1 million—offer a menu of maintenance and repair services that include lawn care and handyman fixups. The communities are clustered for walkability and are Energy Star-rated for efficiency. The goal is for each community to “support an idealized lifestyle,” says Jackson. And the systems and templates he developed allow Boulder Creek to render its brand with each new community and cross-sell among them.
This new marketing tactic “has raised our brand awareness by tenfold,” says Sinkey.
In December 2008, Boulder Creek made another bold investment “right in the middle of the downturn,” says Sinkey, when it brought its salesforce in house (it had previously relied primarily on real estate agents). It hired Paul Gortzig, a former vice president of sales and marketing with Capital Pacific Homes, as its sales and marketing manager, and let him bring in his own sales team. “I had to explain to my partners why we should be making that kind of change at that time, and I said that we had a chance to shine” when other builders were moving away from sales training. The following June, the builder also launched an outreach campaign to the real estate community. Its “We Love Realtors” program included sending Tiffany-boxed cupcakes to every real estate agent near its six communities. “We’ve probably sent out $12,000 to $15,000 worth of cupcakes in the last 12 months, and I can’t even quantify the type of impact this has had,” says Sinkey. The builder has also conducted roundtables for its real estate agents and salespeople, who are out in the field more to learn about the competition and their customers.
Many of those customers are looking for smaller houses, which Boulder Creek has been building “for quite a while,” says Sinkey. Its products range from 1,250 to 1,800 square feet with small yards. And Boulder Creek has even trademarked its “wee-Cottage,” an 800- to 1,200-square-foot series that David Gregg, a co-owner who is the company’s director of community development, devised. He took a townhouse product and transformed it into a small detached home, “but with condo-style ownership and priced like a unit in a fourplex,” explains Sinkey.
Boulder Creek put up its first wee-Cottages at Blue Vista, a 200-homesite community in Longmont, Colo., where it has been building in partnership with the charitable nonprofit developer, Thistle Community Housing, which focuses on affordable and rental housing. Thistle allowed Boulder Creek to build the cottages, which are priced affordably on 104 lots at between $130,000 and $150,000. The other 96 lots are market-rate, and the cottages on them sell for between $180,000 and $200,000.
Boulder Creek Builders is about to close out at two of its active communities, but is under contract for a dozen others with a total of about 750 lots. Sinkey expects five or six of these communities, with between 450 and 500 lots, to actually come to fruition. (Boulder Creek just purchased a new office building in Louisville, Colo., which is near a community it hopes to start a year from now.) The company currently controls about 180 lots.
Sinkey observes that the Colorado housing market has been rebounding “for the past six months” and projects that Boulder Creek’s closings would increase to between 115 and 125 in 2011, and eventually 150 to 250 annually. But getting much bigger than that probably isn’t in the cards for a while. “The ownership is not interested in closing 500 homes a year,” he says.
John Caulfield is a senior editor for BUILDER magazine.