Brothers Bill and Milburn Poston were working in the real estate business in Atlanta in the early 1970s when they decided to switch gears and develop land. But prior to launching their venture, the subject of what they would do with their finished lots came up and another decision was made: They’d build homes.
In fact, that’s all Bill and Milburn did when they launched Traton Homes in 1971, building five homes that first year. They didn’t actually develop any land until the 1980s. Although it’s still a relatively small operation 46 years later, Traton Homes made a big impact in the Atlanta area, where it’s completed nearly 10,000 single-
family homes and townhomes. The company ranks No. 182 on the most recent Builder 100 list with 179 closings in 2016, and it plans to deliver 165 homes in 2017.
“We started in 1971 and never stopped building,” says Milburn.
The secret to its longevity? Executives credit the company’s conservative approach to deal making as a major factor.
“From a management point of view, our company’s hallmark is its relative conservatism,” says Bill. “Our risk tolerance level ensured we carefully managed our growth, which allowed us to navigate through the tough times.”
Clif Poston, executive vice president, says Traton has never tried to grow too quickly and prefers a “methodical” approach when it comes to deal making.
“When the times were good we didn’t fly as high as some people did,” he says, adding that when the latest downturn hit, Traton wasn’t overextended with respect to land positions. “We were not stretched out on lots of low-profit deals and lots of things that were out of our wheelhouse. We were able to keep things on the road and not go under during the downturn, which is something we’re very proud of.”
There were competitors before the housing boom, he notes, who executed as many deals for which they could get financing, “at the sake of quality sometimes.”
That’s not Traton’s way of operating, even though it complicates the decision-making process, says Chris Poston, Clif’s brother and senior vice president in charge of the company’s land planning and development initiatives. The complexity stems from the “scrutiny” placed on every possible deal.
“Over the course of our history we’ve probably done a few of those deals that we said, ‘This deal might grow into being a success. It’s thin right now, but over time this is a great up-and-coming area,’” Chris says. “What we try to do now is we only take what we believe are A+ deals, and that’s hard to find.”
In Atlanta, that philosophy can make it difficult to compete with public builders that can use larger capital stacks to take greater risks when it comes to land positions, Chris says. Traton also tries to set itself apart with its devotion to exceptional customer service, quality craftsmanship, and the value it offers buyers.
Family Affair
Traton Homes is family-run, and its moniker stems from the combination of two names: Tracy, Milburn’s eldest daughter, and Clifton, who joined the company full-time in 1994. He and Chris, who came aboard in 1998, are Bill’s sons.
“It’s comforting to come to work knowing the people around you have got your back,” says Clif. “It can be challenging sometimes because you’ve got family politics that mixes with business, but overall it’s great because we have different ideas about things but we always seem to be able to get it back together to make big decisions.”
One of those decisions that will take effect later this year is to leave the Charlotte market three years after entering. “We decided to pull back and focus on what got us here, which is Atlanta,” says Clif, adding that it’s hard to manage a division from afar as a smaller builder.
During its time in Charlotte, Traton has
delivered about 40 homes and plans to complete two projects in Union County, N.C., before shutting down its operation for good. Charlotte was Traton’s first expansion outside Georgia.
Atlanta Focus
Traton is fortunate that Hurricane Irma didn’t derail its plans to open three townhome communities in Cobb County, Ga., this year. North Square, a 90-unit community less than a mile from Traton’s office in Marietta, will have its first units ready to close in December. North Square will offer a two-story product, just over 2,000 square feet, with a starting price in the high $280s. About a week after opening for sales in August, two units went under contract.
The community is nearby Wellstar Kennestone Hospital, which soon plans to break ground on a massive $160 million emergency department expansion. The hospital project, Clif says, is expected to be a boon for Traton and North Square.
In the middle of a historic district north of Atlanta, The Registry at Marietta Square will include 12 townhomes, which will start in the mid-to-high $400s. According to Clif, these will be the first new homes built in the district in decades, and the interest list already includes over 60 people. Sales will begin in the fall.
The first lots at the Woodland Parc development were set to be finished in September, after BUILDER went to press. The 48-unit community in Smyrna, Ga., is near SunTrust Park, the new Atlanta Braves stadium that opened in the spring. Traton will offer 36 three-story and 12 two-story townhomes at the site. The company had the land under contract around the same time the Braves announced their new stadium and mixed-use development project in 2013.
These days, Traton develops roughly 85% of the land on which it builds, up from about 50% prior to the downturn. This way gives the company more control but requires more
financing to execute, Chris says. “But we have found financial vehicles that leave us in that conservative state of not having a lot of skin in the game,” he says. “So we’re able to get deals done with nonrecourse debt, or very minimal recourse debt.”
By taking the conservative approach, Traton aims to continue to never stop building.
