Land investor Hearthstone has chosen Beazer Homes USA to manage, market, sell, and finish building out 462 lots in six communities in the Atlanta market that had been under the control of McCar Homes.
Beazer and Hearthstone have worked together for years, according to executives at both companies.
"This is a tremendous opportunity for Beazer Homes to expand its presence in our hometown of Atlanta," said Beazer CEO Ian McCarthy. "Beazer Homes and Hearthstone have shared a strong business relationship for many years, involving numerous successful new-home communities across the country. We are pleased to once again partner with Hearthstone in this win-win endeavor that will both bolster our local presence and enable Hearthstone to realize more value on their investment."
"We are very comfortable with their expertise and ability to execute," said Hearthstone president Mark Porath. "They will work through the assets. And, since it's right in their back yard, it was a perfect match for us. We trust these guys implicitly."
It was important that whomever Hearthstone chose to manage the assets could also work well with one of Hearthstone's major investors, CalPERS, the California Public Employees Retirement System, Porath said.
"We know they have our back, and if things don't work out, we can pick up the phone and call Ian [McCarthy] or [CFO] Allan Merrill and say, 'This isn't working out. We have to move heaven and earth to make it go.'"
Despite its long-term business relationship with Beazer, Hearthstone did some checking, even down to talking to the builder's customers, to make sure its reputation in the marketplace is sound. Beazer spent the past few years battling and settling federal investigations into mortgage fraud.
"All of us these days have legacy issues," said Porath. "But we spent a lot of time on the ground making sure that they are accepted in that market."
Hearthstone said it went looking for a new builder in the six communities after McCar fell out of the contract. "They [McCar] are good people, and they are going to be fine," Porath said.
McCar executives could not be immediately reached for comment.
Working through the assets as quickly as possible to get them converted into cash flow is important to Hearthstone, Porath said. So plans for how to do that under Beazer's watch are already in place.
"The plans are in cement, and they are going forward," Porath said. "Everything is going full speed ahead. We need to move product to recapture as much value for CalPERS as possible."
The home sites are for single-family and townhomes priced from the high $100,000s to the high $300,000s. The communities include Westchase Commons and The Lakes at Sugarloaf in Gwinnett County, The Gates at John's Creek in Fulton County, Thorngate and Olde Union Preserve in Forsyth County, and Cobblestone Creek in Cobb County.
Kevin Clark, president of Beazer's Atlanta division, said his team will be meeting with existing homeowners in the six communities over the coming weeks to share plans for the sale and construction of new homes within each community.
"Our goal is to keep the current residents apprised of our plans throughout the process," said Clark. "Empty or undeveloped lots have become a cause for concern for some of these residents, and we want to assure them that Beazer Homes and Hearthstone have a plan and the resources to complete the build-out of their community."
Learn more about markets featured in this article: Atlanta, GA.