Left to right: John Buckley III, COO; Helen E. Dragas, president and CEO; Robert C. Makin, CFO.
Credit: Tina Williams
Any Any business that adheres to the level of discipline that guides The Dragas Cos.
must have an interesting history. Maybe there’s a long-past corporate failure that produced a resolution for increased attention to detail or an owner’s career in the military that translated into an equally tight-run corporate ship. For the Virginia Beach, Va.–based builder, it’s a family history of wartime deprivation and years of scraping to get by.
Founder George Dragas, the son of Greek immigrants, was a young boy when his mother took her children to Greece to visit relatives. While they were there, World War II broke out. The family barely survived the Nazi occupation. Upon returning to the U.S., George learned that his father had died in an accident at work, leaving his mother to work as a seamstress in a factory to raise four children.
“They faced that kind of do-or-die situation,” says George’s daughter Helen Dragas, who cut her teeth in the business at 13 conducting customer service interviews. She now serves as the company’s president and CEO. “It’s that gut level, ‘anything can happen’ mindset.” It instilled in George—and now Helen—extraordinary prudence in an industry in which major decisions often are made without solid data to support them. “My father worked hard to build the company,” Dragas says. “He didn’t want to put himself at risk of losing it.”
Risk aversion may seem like a contradiction for a builder, but it’s part of an ultra-conservative financial philosophy that has guided The Dragas Cos. since it opened in 1968. It has virtually no debt—generally, less than 10 percent of equity. The company experienced a 686 percent increase in revenue between 2001 and 2007. In addition, Dragas produced the highest number of closings in its 40-year history in 2007; both closings and revenue were more than double that of the 2004 peak market year.
America’s Best Builder judge Vernon McKown, president of Norman, Okla.–based Ideal Homes and a 2007 America’s Best Builder winner, is clearly awestruck by the company’s fiscal and operational chops.
“Their company embodies a well-run machine,” McKown says. “Every piece complements the other. It all culminates in the final results. … Here, I find a new hero in Virginia Beach.”
Having minimal debt gives the company flexibility that most home builders only dream of achieving. It means the builder isn’t hampered by the operating constraints imposed by lenders, such as restrictions on starts or the reappraisal of land.
“It does allow us to survive the really tough cycles this industry goes through unfailingly over time,” Dragas says. “We may not have the highest return on equity, but we will be here to have returns through thick and thin. There’s a personal side to it as well. I think we have always slept better at night having a pretty clean balance sheet.”