Six months after emerging from Chapter 11 bankruptcy, Salt Lake City-based private home builder Woodside Homes plans to sell off its East Coast home building and land assets, exiting four market arenas in Florida as well as the Washington, D.C., metro market.
The move will involve the sale of about 500 entitled raw lots and 25 finished lots in a half-dozen subdivisions in the D.C. metro market and about 500 finished lots and 200 undeveloped lots spread across 15 prospective residential subdivisions in Daytona, Jacksonville, Tampa, and West Palm Beach, Fla. Woodside has operated in the D.C. metro area and in the Florida markets since 2004.
Woodside CEO Joel Shine confirmed the company has retained brokers to assist in the sale of the land assets, and he expects to complete the sale of the assets by year-end. The decision comes as national home builders' appetite, particularly for finished building lots, continues to be voracious at prices they're betting will both support operational overheads in their current markets and contribute profitability and sales volume in the next six to 12 months.
Woodside will realize a "meaningful cash contribution" from the sale of the land assets, Shine said, but the key reason he gives for the divestiture is a "restructuring around strategic focus" on Woodside's markets in four bread-and-butter states--Arizona, California, Nevada, and Utah.
Woodside, the nation's No. 4 for-profit private home building company, according to BUILDER magazine's Builder 100 list, closed on 1,788 homes in 2009, with revenues of just fewer than $470 million. It emerged from bankruptcy in December 2009, with $315 million in restructured debt, $150 million to $200 million in cash, and the need to stabilize cash flow and eventually recapitalize.
After the sale of the East Coast assets, Woodside will become a more concentrated regional operator, with primary focus on competing in its four critical states, with additional operations in Minnesota and Texas, which Shine said require less oversight. California itself accounts for 42% of Woodside's home building operating revenues, according to court documents from the bankruptcy proceedings compiled during Woodside's 14 months in Chapter 11.