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Credit: Renaissance Homes
NEW LEASE ON LIFE: Having emerged from bankruptcy on January 1, Oregon-based Renaissance Homes has a clean balance sheet and ambitious plans to close between 140 and 180 houses in the Portland and Seattle markets in 2010.
9. Renaissance Homes, Lake Oswego, Ore.
Few builders have survived bankruptcy. For some reason, though, builders in the Pacific Northwest have managed to get through the Chapter 11 ordeal better than builders in other parts of the country. In November, a bankruptcy court approved Marnella Homes’ reorganization plan. And on Jan. 1, Renaissance Homes finally emerged from 15 months of court protection from its creditors.
While in bankruptcy, Renaissance kept building. In 2009, it closed about 80 homes, which generated $45 million in revenue. The builder also lowered its bank debt from $165 million to only $4 million, according to owner and president Randy Sebastian, whose family pumped nearly $8 million into Renaissance to keep it going under Chapter 11.
Sebastian reduced the size of his average house plan in the Portland, Ore., market by 500 square feet to 3,000 square feet, and its average selling price to the $600s from $800,000. In November, Renaissance opened its first sales office in the Seattle market, where it will build entry-level homes that range from 1,700 to 3,000 square feet and sell for $229,000 to $289,000. Sebastian expects to start his first six homes there this month.
He hopes Renaissance can close between 60 and 80 homes in Portland in 2010, and between 80 and 100 in Seattle. When asked what he’s learned from bankruptcy, Sebastian answers “that leverage can be a killer.” Indeed, his company restructured most of its land deals into LLCs in which investors shoulder more of the debt load.