As the recession wound down in 2010, Eric Campbell, co-founder of CamWest Development, saw opportunity—his land-constrained Seattle market was flush with distressed property at rock-bottom prices.
So Campbell, whose company survived the recession focusing on infill construction near Seattle’s employment centers, took the deals to his banks, which said he’d have to put up 50 percent to get financing. For CamWest, that meant leaving land for hungry publics that considered moving into Seattle.
“We decided that if we were going to have to compete with public home builders, we would have to go out and get public money,” recalls Campbell.
He spoke with Ivy Zelman of Zelman and Associates, an adviser to home builders, about taking CamWest public, and she said the firm had to be in more than one market to attract public capital. But Campbell, who has young children, wasn’t keen on having to travel to build in unfamiliar markets.
Zelman introduced CamWest to Toll Brothers, a builder of high-end homes like CamWest. Toll had deep pockets; it saw opportunity in Seattle and was looking for an access point. Toll Brothers’ CEO Doug Yearley visited Campbell, who took him to see a for-sale mountaintop with views of Seattle and the Olympic Peninsula and the potential for million-dollar homes.
In 2011, Toll bought CamWest for a reported $150 million. The merged company changed its name to CamWest, a Toll Brothers Co., taking advantage of CamWest’s local reputation and Toll’s well-branded national one. Campbell stayed on as Toll’s Seattle division president.
Since the deal was consummated, CamWest has bought properties Campbell had identified, including the mountaintop community, Belvedere.
“We are on a great growth pattern. Toll did a great job executing on the land” purchases, he says, and the division added 25 employees in 18 months. Most of CamWest’s management team remains and the culture between the two builders has been a good fit.
“We both have a desire to build great communities, so at the end of the day, you have a fit because of that alignment,” Campbell says.
There were some things Campbell gave up in the deal, such as the ability to make a decision without consult. He’s also had to learn to manage up.
Campbell acknowledges that Toll might decide he’s no longer needed at the company he founded. That’s why, he says, it’s important to strike a deal when you sell that’s big enough to take care of you and your family if you are let go.
Learn more about markets featured in this article: Seattle, WA.