Thursday morning, the Crestview Hills, Ky.-based builder and developer “cut a deal” to purchase 36 distressed finished lots in three communities in Columbus, Ohio, from another builder there, according to Fischer’s president and COO Bob Hawksley. He also tells BUILDER that Fischer is in the due diligence stage on two other, bigger land deals in Indianapolis, each with more than 200 lots.
This activity comes only a week or so after Fischer became the sole developer of Shaker Run, a 424-acre community in Turtlecreek Township near Lebanon, Ky. Fischer reportedly spent $10.5 million to buy out its joint-venture partner in this development, Cincinnati-based Robert C. Rhein Interests. The two companies had purchased this land five years ago.
“Our partner needed to get separated from this subdivision, and the bank wasn’t happy, so we were able to [buy out Rhein and] purchase the note from the outside lender at a substantial discount that enabled us to lower our basis,” he explains. “We were already in the subdivision, so we felt this was the right position and the right play for us.” Fischer financed this acquisition through its bank line facility, says Hawksley, who adds that the company also has cash reserves it can draw on for future deals.
Shaker Run is zoned for up to 1,200 housing units. The community already has more than 150 residents, says Hawksley. Fischer and The Drees Co. are currently building there, with Fischer offering its Masterpiece series of homes on 80-foot lots with side entrances; a second line of single-family homes on 65-foot lots with front entrances; as well as patio homes and condominiums, the latter priced between $100,000 and $160,000 per unit. In the community’s newest phase, Fischer intends to expand its product mix at Shaker Run by bringing in a new builder, its subsidiary Maple Street Homes, which he says is likely to offer its Parkside Collection of house plans on 50- to 65-foot lots. These homes target first-time move-up buyers, says Hawksley.
Fischer closed nearly 700 homes in 2009, and expects to boost that total to “at least” 1,000 this year, says Hawksley, who also projects that his company’s revenue will expand by 28%.
John Caulfield is senior editor for BUILDER magazine.