In 2012, Steve Dunn, then president of Indianapolis-based Timberstone and Westport Homes, was looking longingly at opportunities for land buys in the Midwest. However, like many privately held builders, his company lacked cash and lenders willing to fund acquisitions.
Meanwhile, Ryland Homes was craving a bigger presence in North Carolina. The publicly traded builder had cash, but it needed lots. Dunn, whose Timberstone Homes was building in Charlotte and Raleigh, N.C., suggested to Ryland executives that each had what the other desired, and a deal was born.
Ryland Homes bought all operations of Timberstone Homes—the ninth biggest builder in Charlotte—gaining 870 lots and homes, 154 others under contract, plus 17 models.
“This really puts us on the map; it’s a popular place and where a lot of builders want to be,” Drew Mackintosh, vice president of investor relations and communications for Ryland, told BUILDER at the time.
The deal also gave Dunn what he wanted: cash to buy lots and houses where competition from large public builders like Ryland was not as intense as it is in the Raleigh market.
“As a private builder, we have limited availability of capital as opposed to some of the public builders,” said Dunn at the time of the Ryland deal. “We are looking long term, seeing that our ability to compete on land and lots in the Midwest is a better opportunity than in Raleigh [and Charlotte].”
The strategy has proved successful for the company. Westport Homes is expanding
in Columbus, Ohio, and in Fort Wayne, Ind., and Indianapolis, where it has about 25 communities with model homes and another 15 communities where it has lots. While the builder actively is looking for lots in Columbus, it is stocked up in Fort Wayne and Indianapolis for the next two to three years.
Concentrating on the Midwest market also has made it easier for Westport to manage its personnel because the builder didn’t also have to staff a location in farther-away North Carolina.
“Everything has worked out the way we anticipated and wanted it to happen,” Dunn says.