In December, Aliso Viejo, California-based Thomas James Homes made the decision to wind down its Denver operations. After entering the Colorado market in 2021, the builder said it encountered a tougher-than-expected market in Denver. Thomas James Homes plans to sell the remaining available homes in Denver before leaving the state.
The builder offers homes in Southern California, Northern California, the Pacific Northwest, and Arizona. Thomas James Homes is also putting a stronger emphasis on the company’s BUILD offering, which enables homeowners to tear down their current homes and rebuild new ones in their place.
President and chief operating officer Steve Kalmbach spoke with BUILDER to detail Thomas James Homes’ decision to leave Colorado as well as its plans for the future.
What factors contributed to the decision to wind down operations in Denver?
We opened this office at the market peak; however, a major factor in this decision is the volume declining home sales in Denver, alongside continued pricing pressure on house prices.
The Thomas James Homes business model relies on both scaled operations and resilient pricing structures. Additionally, our spec homes require sales to be secured long before construction is complete, which is not feasible in Denver's current market conditions.
What is the company’s short-term plan regarding market operations in Denver?
Thomas James Homes is in the process of completing a number of homes under development. We remain dedicated to delivering excellence to our Denver-based clients.
Are the factors that contributed to the decision affecting other markets where the company operates?
Despite our decision to pull out of Denver, we are committed to our mission of unlocking access to the coolest neighborhoods, providing high-quality homes through a seamless end-to-end process. We are confident Thomas James Homes can weather the current market challenges and continue to grow in our core markets of Southern California, Northern California, Pacific Northwest, and Arizona. We have made significant capital investment in land acquisitions in these four markets over the last several months, and feel really good about the neighborhoods where we are positioned.
Is TJH eyeing other markets for expansion, or is the company focusing on existing operations within current markets?
Thomas James Homes will continue to invest in its core markets of Arizona, Northern California, Pacific Northwest, and Southern California (Los Angeles and Orange counties). The BUILD practice and support from the Private Client Group in these regions will continue to be top priorities.
What is TJH’s outlook for 2024 and how does it believe its model positions the company for success?
Thomas James Homes is confident about continuing to invest time and resources in our core markets. We continue to invest in supply-constrained well-located neighborhoods. This remains a core tenet of our business model as we continue to build scale in each market.
We just announced the debut of our new Design Studios in Orange County, Los Angeles, Northern California, Arizona, and the Pacific Northwest.
Developed as a tool to help clients bring their dream homes to life, the Design Studios are powered by REVEAL by Thomas James Homes, a proprietary technology that provides an immersive and interactive home design experience.
Using REVEAL, clients can virtually walk through their home prior to it being built, exploring different creative options to make informed decisions while personalizing finishes.
As part of TJH’s BUILD capabilities, enabling homeowners to unlock the value of their existing home and build a new, larger residence in its place, the Design Studios allow clients to digitally immerse themselves in the home creation process.
Recently, we announced a new chapter for the company with the launch of the Private Client Group: a new sales team to support the company’s BUILD by TJH capabilities.
With a commitment to “unlock access to the coolest neighborhoods, one new home at a time,” the company continues to place emphasis on their BUILD offering, creating an opportunity for clients to maximize the square footage and value of their existing home through a turnkey design-build solution that drastically simplifies the traditional custom-building model.
Two key differentiators are TJH’s ability to guarantee price upon contract execution and on-time delivery within 12 months of starting construction, achieved through an integrated process that includes architecture, design, permitting, and construction management, while eliminating costly overages and delays, enhancing the overall customer experience, and easing the stress of the home building process.
