Flush with capital after being acquired by Emaar Properties of Dubai for more than a billion dollars last year, Newport Beach, Calif. builder John Laing Homes is moving into Phoenix.
Previously active only in California and Colorado, John Laing is launching start- up operations in the Phoenix market and has appointed David Walls as division president. Walls was formerly division president for Monterey Homes, a move-up and attached-product division of Meritage Homes in Phoenix.
Though sales have slowed substantially for builders in the region and existing inventory levels are near an 11-month supply, long-term thinking is behind Laing's decision to move into Phoenix, said Walls. "The rationale is that, even though housing is down, the overall economy is one of the strongest in the country. And there is no reason to expect that it won't continue to be strong in the future."
The glut of inventory suffocating established Phoenix builders has created a land-buying opportunity for newcomers. "The big publics are still holding back as far as acquisition while they are trying to clean up their balance sheets," said Walls. "And most of the existing private builders that are there, they have the same issues, so there is a little lull. I think there is a three- to six-month window for someone that is well capitalized to come in and have a good buying opportunity."
To date, the company has not secured any land positions but is evaluating a variety of packages that would support the delivery of approximately 500 units in the year 2010. According to Walls, the product mix will include mostly move-up homes. "There is also the potential of some higher-end stuff if those opportunities are available, as well as some well-located, infill-attached projects," he said.
Laing is not the only builder to recently enter the Phoenix marketplace. Sources confirm Orleans Homebuilders of Bensalem, Pa. as well as Mattamy Homes of Canada have recently acquired lot positions and are currently building model homes in Gilbert and in Pinal County. See Ground Control in the May 8 issue of BIG BUILDER for the complete story.
Learn more about markets featured in this article: Phoenix, AZ.