The sale should elevate Irvine, Calif.-based StanPac above the 10th slot (with 299 closings) in the Austin market and help it pursue the first and second move-up buyer. Streetman’s 162 closings in 2013 placed it 17th in the Austin market, according to Metrostudy. The two-generation builder owned 1.79 percent market share by closings and 2.21 percent market share by revenue.
Together, StanPac and Streetman would have ranked fifth in Austin with 461 closings in 2013. The deal gives StanPac 850 additional homesites and includes approximately 10 current and future communities. Five of those are actively selling.
“They are in similar submarkets and there are some submarkets [Streetman is in] that will allow us to expand our footprint in the Austin market,” says John Bohnen, StanPac’s Austin Division president.
The deal makes sense to Madison Inselmann, regional director of the Austin market for Metrostudy.
“The two builders build in generally the same areas, the super-hot western portion of Cedar Park and Leander in addition to the southwest submarket out toward Dripping Springs, so there is familiarity with the niches and the consumer preferences,” he says. “By acquiring a well-known area builder with a long history in Austin, Standard Pacific reinforces its lot positions in these regions for the future—while significantly increasing its supply of lots available today—as builders around the market continuously await the delivery of new lots in a market that is chewing through them at a rapid pace.”
Bohnen, who will continue to lead the Austin Division, contends the deal was about more than just valuable land position. StanPac has extended offers to all Streetman employees, he says.
“We just felt like their overall strategy was consistent with ours with an emphasis on product and customer service. Overall, that’s what got us most excited,” Bohnen says.
Inselmann sees more of these deals like this coming in the future. “In a rapidly expanding market, all local builders become targets for acquisition. As such, it’s both surprising and not surprising this acquisition occurred,” he says. “It’s just a matter of whether the local leadership is ready to sell and whether the numbers make sense.”
Learn more about markets featured in this article: Austin, TX.