Lakewood Homes is suffering along with most other builders in Chicago, whose housing market is off 65 percent this year. “Business is awful,” says Buz Hoffman, Lakewood’s CEO.
But unlike other builders that decimated their workforces, Lakewood has kept its management team fairly intact during the downturn. And the company is now offering their collective expertise to struggling builders, lenders, and investors through a new division, Lakewood Real Estate Solutions, which it launched last week.
Hoffman tells BUILDER that he got the idea while walking through different subdivisions in Chicagoland that were unfinished and, in some cases, in disarray. “We noticed how lousy they looked,” he says, pointing out that a run-down or incomplete subdivision, in the public’s perception, inevitably will be a black eye for the entire market’s housing industry.
He says that the new division could provide operational, financial, construction, design, land-use planning, and marketing support to smaller builders that have downsized but have not been through a prolonged housing recession before. He expects to receive calls from banks that might use Lakewood Homes as a contractor or project manager to complete unfinished homes or communities, or fix up unsold houses that have lapsed into disrepair. Hoffman even envisions the new division providing consultation to auction houses.
When asked why builders or banks would seek help from a builder that’s in the same boat they are — Lakewood expects its closings and sales this year to be considerably below 2007 totals, which themselves were off — Hoffman states that he does not expect any of his company’s competitors to be calling upon Lakewood’s new division for assistance. However, he also argues that his company’s long-established reputation as a Chicago-area builder that has won awards for its customer service will be attractive to some companies in trouble with no answers of their own.
This week, Lakewood Homes finalized the brochures for the "real estate solutions" business, which Lakewood is sending out to “a couple hundred” companies. The builder also plans to promote the division on its Web site. “If we can help out our competitors, it ends up being good for the entire industry that a home building is prospering and selling homes in these difficult economic condition,” he says.
John Caulfield is a senior editor at BUILDER magazine.
Learn more about markets featured in this article: Chicago, IL.