WCI Communities always was a force to be reckoned with, according to Keith Bass.
As Bass climbed the ranks in the competitive Florida market with Taylor Woodrow and the Ryland Group, the 25-year veteran respected WCI's prowess in both the move-up and tower markets.
But when the market turned, Bass' once-strong competitor almost disappeared. With its debt reaching nearly 70% of its capital in 2008, WCI filed for bankruptcy with no plan in place. Yet, over the next few years, after David Fry replaced Jerry Starkey at the helm, WCI emerged from bankruptcy, shedding $2 billion of debt and taking on $450 million in loans from its secured creditors.
Bass, president of Ryland Homes' South regional division at the time, joined WCI's board of directors in March 2012. He took over for John Peshkin, a former coworker at Taylor Woodrow. Peshkin essentially nominated Bass for the position because of his deep knowledge of the Florida market.
Once the board of directors confirmed the appointment, Bass began to play a strong role in settling WCI's outstanding debt. Fry had sold off enough assets to pay a majority of it, but over $100 million remained. In mid-2012, WCI turned to its investors for a new term loan and offered shareholders a common stock offering, securing enough capital to pay off the debt and start growing the company.
At the end of 2012, Bass was named CEO, and WCI closed with roughly $80 million in cash. With the firm finally on solid ground, Bass had one goal in mind: to grow the company back to the strong competitor he always knew it as.
The way he saw it, WCI had two options: sell the company or go public.
"We knew that if the opportunities were there to grow, we knew if we could find land opportunities and if we performed, the IPO was a potential option," Bass says. "By the end of January, we were able to find some opportunities that completely matched with what WCI and the brand stood for."
Following on the heels of other home builders like Taylor Morrison Homes, TRI Pointe Group, and William Lyon Homes in 2013, WCI announced its IPO that June, earning $91 million. Shares sold for $15 apiece—lower than the $21 to $23 per share the company had wanted, but, in hindsight, Bass is grateful the company was even able to launch its IPO. Shortly after WCI came out, the markets essentially closed to new public home builders.
"We felt like a bit of Indiana Jones sliding in underneath the gate there," Bass recalls. "I think we were kind of the last ones at the time."
A Clear Strategy
After studying WCI from afar for years, Bass had a clear-cut vision for the builder's brand: high-end product for move-up and luxury buyers in Florida.
"For me, that was very important—making sure that everybody understood what we are and what we can do and what we're going to do, and certainly what we're not," he says.
At its core, WCI is a Florida builder, though it had previously ventured up the East Coast all the way to Massachusetts. (WCI sold its properties outside of Florida during the restructuring.) With the amount of pent-up demand for active adult and luxury second homes and move-ups in Florida over the past few years, the Sunshine State's a good place to be.
"Employment growth is better here, population growth is better here, so I'm not intending to go out of the state anytime soon until we really have got all of the opportunities in Florida covered," Bass says.
Part of Bass' vision is for WCI to squeeze out every last drop of profit in Florida. He decentralized the offices in Bonita Springs and set up branch offices across the state. In November 2013, David Ivin became president of WCI's North region, and Paul Erhardt was tapped as president of the South region in an effort to focus on each particular market rather than the state as a whole.