Birmingham, Alabama, USA downtown skyline.
Adobe Stock / SeanPavonePhoto Birmingham, Alabama, USA downtown skyline.

Birmingham, Alabama–based Prominence Homes has experienced steady growth since its humble beginnings in 2011. In the company’s first year, it built three homes. In 2023, the company jumped 70 spots from No. 147 on the 2023 Next 100 list to No. 77 on the 2024 Builder 100 list.

Prominence Homes closed 712 homes in 2023 compared with 336 homes in 2022. Mike McMullen, CEO of Prominence Homes, says the company has been “95% focused” on the rental market since its founding. In addition to Prominence Homes, McMullen and business partners Misty Glass and Scott Underwood operate single-family residential management company America’s Rental Managers and title and closing company Titlecore.

In 2023, McMullen says the builder once again started marketing its product to the primary buyer market in addition to investor sales, efforts which gave Prominence Homes “a nice upward trajectory in 2023 from 2022.”

“One of the reasons that we had such a spike from 2022 to 2023 is we made a conscious effort and the three owners of the construction company chose to build more houses and retain more of the houses for ourselves,” McMullen told BUILDER. “Because what we see in the market, especially in the build-for-rent world, is inflation is not going away or going down. Rents are going up steadily.”

McMullen says Prominence Homes also utilized rate buydowns and incentives in 2023 to help move more product.

“In building, you’re either a custom [or] semi-custom, super profit-driven company with high margins or you run a lower-to-mid-margin volume,” McMullen says. “We are more of a lower-to-mid-margin volume builder. One of the things we’ve done well over the last few years, we’ve identified who we are, what we do, and how we do it the most efficient way.”

McMullen says Prominence Homes is a “very relational company,” working 90% by referral on its sales. The company is averaging a capture rate of leads of approximately 11.5%, besting industry averages. He attributes the higher capture rate to the way Prominence Homes trains its agents to sell and focus on relationships.

“Of our executive team and our construction team, all of the top executives have been with us for nine-plus years. There’s a lot of longevity and understanding of our business—understanding what we do well and what we don’t do well,” McMullen says. “It’s like an oil well, where you go deep and narrow. That’s kind of what we’ve done, instead of a broad shotgun approach, by knowing what we’re good at and continuing to do that over and over.”

Operational in five markets, Prominence Homes has communities in the Alabama markets of Baldwin County, Birmingham, Huntsville, and Tuscaloosa as well as Central Florida between Orlando and Tampa.

“We’re actually downsizing the Huntsville market and upsizing the Central Florida market. Our margins are better in Central Florida, the demand is greater, and we see Huntsville as an oversaturated market in the build industry,” he notes.

McMullen says scaling operations in Florida will be a “heavy focus” in the next two years, focusing on the better margins in the region. Prominence Homes aims to target a range between 400 and 500 closings in Central Florida, up from around 100 homes currently. Conversely, the company plans to scale down operations in Huntsville to about 50 units from 125 homes currently.

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