When Pulte Homes' Del Webb division broke ground just south of Atlanta in July for Sun City Peachtree, it was a symbolic event in more ways than one. Not only was it just the second Sun City to move forward since the two industry giants merged five years ago, but it also signaled the beginning of a building spree that could make more than 100 of the Del Webb–branded active adult communities pop up throughout the country during the next decade.
The thrust to accelerate community openings stems from a decline in sales despite steady demand. As existing Del Webb communities, such as Sun City Lincoln in California and Sun City Grand in Arizona, have matured and reached close out, the number of homes available to buyers has waned. With new Del Webb communities coming online, the Bloomfield Hills, Mich.–based company anticipates the division's sales pace to accelerate.
Some of the 23 new Del Webb communities planned to come online during the next 18 months will anchor virgin markets for the brand. They will be showing up in places like Manchester Township, N.J., and Yorkville, Ill., places not normally considered meccas for the baby boom generation. But then, “Not everyone wants to move to the Sunbelt,” says David Schreiner, vice president of active adult business development for Pulte. “Some want a three or four-season markets, while others still want to retire in place, wherever that may be.”
However, the market softening is pulling closings for the year off what was projected in early 2006. At an annual investor conference in February, the company foresaw closings growing 31 percent year-over-year, reaching the 19,000-unit mark. But even with a falloff in closings, active adult remains a growth area for Pulte.
Executive vice president and COO Steve Petruska said in a second quarter earning call, “There are a number of bright spots in our business, including the very successful openings of the new Del Webb communities outside of Atlanta; Raleigh, N.C.; San Antonio; and two communities outside of Phoenix. The Del Webb brand is not immune to the broader mark issues, but the demographic marches on.”
Active adult deliveries accounted for 39 percent of Pulte's business last year, up from 33 percent from 2004. Del Webb currently operates in 17 states, but plans to be in 20 by the end of this year, says spokesperson Caryn Klebba, adding that “we expect to have the brand in all  states in which we operate in the next five to 10 years.”
In the immediate future, the communities that Pulte will open under the Del Webb mantel in the next year or two will have a slightly different DNA. Most will be smaller, more intimate “By Del Webb” communities, but four—including Sun City Peachtree—are the builder's signature full-scale communities, the kind that has made Del Webb a household name.