Phillippe Lord wasn’t sure he wanted to work for a home builder again when Meritage Homes executives asked him to come on board to find strategically located land for the company.
It was 2008, and the new-home construction market was imploding. Three years earlier Lord escaped Centex before it began to melt down, and he had a seemingly safer job at Acacia Capital, which sold lots to home builders—including Meritage.
But the flames were captivating.
The Scottsdale, Ariz.–based Meritage was rare among the large publicly held home builders with little land on its books when the recession started. It actually needed to buy land in some markets to keep operations going. And, with land bankers and developers going out of business, Meritage’s conduits to new land purchases were disappearing. “Here was a builder jumping into this,” says Lord, 39. “I decided to give it a go.”
Another factor in taking the job as vice president of Meritage’s strategic operations and research department was that he would answer to Steven Davis, the company’s chief operations officer. With that direct tie, Lord felt his land-buying suggestions were more likely to be successful.
At Meritage, Lord created a super computer system capable of sorting through data and spitting out information that could better target and guide land buying and product decisions based on fact rather than instinct. Lord calls the system a “360 approach” because it gathers detailed data points on supply and demand. And the data is specific to a particular address, not just a neighborhood.
“One side of the street versus the other matters,” he says. “If you can compile a number of data points that are all pointing in one direction then there is a pretty good chance that is the direction to go.”
“In 2008, 2009, every acquisition was important,” Lord says. “Making mistakes was not really acceptable.”
The system has worked well, says CEO Steven Hilton. It allowed Meritage to buy good land cheaply in 2009, and to amass a land portfolio over time that is paying off today. “We underwrite land and pricing of product based on facts and not gut intuition,” Hilton says. “That was a big change from where we were pre-downturn.”
Lord was promoted about nine months ago to regional president of Meritage’s western division where he supervises five presidents, three veterans, and two younger hires.
“He’s done a fantastic job for us, exceeded our expectations,” Hilton says of Lord. “He’s a real up-and-coming executive in our organization.”