Ask anyone at Shea Homes how tough it was to make a buck in 2010.
The Walnut, Calif.–based company was once again one of the 10 largest for-profit, privately owned builders in closings that year, according to our annual BUILDER 100 ranking. (See chart below.) But those closings were down slightly from 2009 and Shea’s revenue was flat, despite J.D. Power & Associates recently rating Shea the industry’s No. 1 builder for customer satisfaction.
No one could argue that Shea was simply waiting for the recession to recede, either. In June, it acquired a bankrupt Levitt & Son community in Florida for $5.3 million from Bank of America, which includes 345 developed homesites and undeveloped lots with the potential for another 390 homesites. In the first phase of the $2 billion Civita project in San Diego, Shea is building two subdivisions of 200 condos, townhouses, and attached homes. And the builder continued to expand its popular Spaces house design concept, which features room flexibility, to other markets.
Moves made in late 2009 benefited two private builders, Ashton Woods USA and Woodside Homes. Georgia-based Ashton Woods USA converted $125 million of its public debt to private debt, which appears to have given this company breathing room to grow. The company has since expanded its operations into Raleigh, N.C., and Austin, Texas. Ken Balogh, a former Centex executive who was Ashton Woods’ COO, was promoted to CEO after Tom Krobot, who had held that post since 1995, retired on Dec. 31, 2010.
North Salt Lake City, Utah–based Woodside came out of bankruptcy in November 2009 and soon afterward began jumping on distressed land opportunities. Its strategy, says CEO Joel Shine, has been to “go where there’s a little less competition” from builders or existing homes, with an emphasis on being near job centers. As of November 2010, Woodside’s biggest deal since coming out of Chapter 11 was in Temecula, Calif., where this builder/developer placed in escrow $7.2 million to buy 210 finished and unfinished condominium lots. The company also acquired lots in Las Vegas; Mesa, Ariz.; and Roy, Utah.
Many private builders are hoping that 2011 presents their companies with a more robust business climate. Arizona-based Taylor Morrison, at the top of the list, is looking to return to profitability after its British parent, Taylor Wimpey plc, sold Taylor Morrison and Canada’s Monarch Homes in April of this year to an investment consortium for nearly $1 billion.
Texas-based David Weekley Homes, which incurred double-digit dips in revenue and closings last year, looked East for growth—to Indianapolis, to be precise, where last month it entered that market by acquiring The Estridge Cos., which only weeks earlier had discontinued its home building operations because it couldn’t get financing to continue. Paul Estridge will become president of Weekley’s Indianapolis division, which is already selling homes and is expected to restart construction next month.
2010 Gross Revenue
The Villages of Lake Sumter
David Weekley Homes
The Related Group
The Drees Co.
John Caulfield is senior editor for Builder magazine.