IN MID-SEPTEMBER, two very newsworthy developments surfaced. One was Emaar, John Laing Homes' parent company, had created a new company known as EJL Homes to scoop up some of John Laing's assets as part of its Chapter 7 liquidation. The other was that Tony Mon, former CEO of the now-bankrupt TOUSA, and three former division presidents from Beazer Homes were launching a new multi-market home building company called Citizens Homes.
The irony was that not only did these two developments break as the BIG BUILDER staff was completing the final stitches on this feature, which profiles executives from eight newly minted home building enterprises, but also that they were flip side to two of the stories included in the package. Funny how one common event can send two people off in completely different directions, but doing very similar things.
Who would have ever thought that Emaar's billion-dollar deal to acquire John Laing would end in a complete disintegration of the company and its management team, with Emaar's Robert Booth building a new company out of the John Laing wreckage and former John Laing CEO Larry Webb starting a separate company from scratch? Or that roughly 18 months after TOUSA filed for bankruptcy, Mon would be back in the home building business at precisely the same time that Lonnie Fedrick, who originally seeded the TOUSA brand with the sale of his Newmark Homes Corp., would be using the TOUSA failure as a platform to restore the Newmark name?
But this is home building, where disaster and opportunity can mean the same thing.
The scores of home building companies that have gone under and the acres and acres of land that have gone back to the banks through foreclosure mean there's a lot of available dirt to be had for a steal. While for some who've managed to remain intact through the downturn, it's an occasion to refill their lot pipelines with less expensive land; for others, it's a chance to start something new, completely unburdened by old baggage.
These pioneers in the brave new world of home building post housing bubble burst have got passion for what they do, excitement about the future, and faith in their abilities to succeed. Their enthusiasm is contagious, even if the hurdles are tangible.
There's uncertainty as to whether the new-home demand that's been building over the past handful of months will be sustainable into next year. There's fear that home prices may take another leg down if foreclosures keep up pace. And with the credit markets locked up tight, getting both seed money and access to working capital has started and ended at the same place: equity.
But even so, seemingly every day there are new home building enterprises cropping up like crocuses in the snow, the first signs of spring after a long winter. They emerge from the wreckage of failed companies, they develop as bolt-ons to existing companies, and they sprout as organic start-ups. Whatever their roots and whatever their fate, they are, in their infancy, home building's next generation.
Learn more about markets featured in this article: Los Angeles, CA.