Although many home building companies find success in operating in several U.S. markets and metropolitan areas, there’s something to be said about a local business thriving in its home market for 30 years.
Price Hightower, CEO of Birmingham, Alabama–based Tower Homes, started his company when he was just 27 years old. Thirty years later, the commercial banker in him is still keeping a tight budget, continually investing in his team, and exploring new industry trends like build-to-rent (BTR). Learn more about Tower Homes and how Hightower has positioned the company for success in Birmingham.
What’s the history of Tower Homes?
I started Tower Homes in Birmingham 30 years ago when I was 27 years old and with a shoestring budget and a big vision. As my experience and capital grew, the company transitioned from flipping homes to new construction, then to land development and production building.
What markets did the company start in, and which does it serve now?
We develop communities and build homes in the greater Birmingham MSA.
What sets Tower Homes apart from other builders in the area?
There are several very good local building companies in our market—and I am friends with all of them. A key to the success of Tower Homes is the large number of people who have helped us along the way. Industry peers, community leaders, the Builder 20 program, and mentors have poured into me and members of our leadership team. It amazes me how much most people will help you if you simply ask.
Previously in my career, I was a commercial banker. And I think that experience still influences the decisions we make at Tower Homes today. So we are probably a little more financially conservative than our industry peers, and we are much more focused on recurring revenue, in the form of BTR, than most builders.
How many closings did the company record in 2022? How will the 2023 closings compare?
In 2022, Tower Homes built 220 homes, about half of which we kept in our rental portfolio. This year we will build another 120 homes for our BTR portfolio and sell about 75% of what we sold last year.
Can you elaborate on the recent C-suite changes?
Several years ago, we created a leadership team so decisions could be made as a group instead of by one or two people. The best thing I have ever built is not a home, it is our team. The leadership team and our employees are first-class, highly motivated people. I am proud to be associated with each of them.
Clint Johnston is our new president, and he embodies all of our company's core values. He is a great man, and he will do great things as he leads our company to its next chapter. He leads a C-suite with top-notch talent in construction, land development, and accounting. My job as CEO is to uncover new opportunities for Clint and his team and then to get out of the team's way!
What industry challenges have you encountered the most this year in your area? How are you addressing them?
Rates and lot availability, which is the same answer most builders would give. Because we are vertically integrated in BTR (we develop the lots, build the homes, have in-house property management, and are the long-term hold investor), the interest rates really impact our recurring revenue. Fortunately, the banker in me has kept significant equity in our portfolio so we are not highly leveraged. But the rate impact is significant.
Like most builders, we have to self-develop most of our lots. Land prices are high, entitlement is hard, regulations are tight, sitework costs are rising, and the carrying costs are double what they were two years ago. Those factors create strong headwinds. But at Tower Homes, we have a history of navigating challenging times, and we will do the same next year.
What are the company’s goals moving forward?
More and better! It is my role to find more opportunities, which might include more local projects, more BTR communities, more property management opportunities, and perhaps new markets. But, ultimately, Tower Homes exists to "build a better life" for its customers, vendors, employees, and those who are helped by our corporate tithing program. We have a 30-year history of improving lives, and our next chapter will include more of that same story.
