Dallas-based Centex Corp. confirmed Monday that it will exit the Denver market by Spring 2009. The company said it would complete homes under construction in its 10 active communities.
"Centex will be gradually winding down operations in Denver until spring of 2009," said company spokesperson Julie Callahan. "We remain committed to fulfilling our obligations to our customers and homeowners in Denver. This means we'll be completing work on existing homes in progress, completing work on sold homes not yet started, and maintaining the right size team in Denver to provide warranty support."
She added, "We're currently evaluating options for land assets in the Denver area as we wind down operations in the coming months."
The Denver division currently supports 50 employees, and adjustments are expected as operations wind down.
According to Hanley Wood Market Intelligence data, Denver is the nation's 16th largest new-home market, issuing 14,234 permits last year. Together, the metro's top-10 builders hold a 35% market share.
Centex closed 349 homes in the Denver metro in 2007, making it the 8th-largest builder with 2.5% market share--up from the 10th-largest builder with just 2% market share in 2006. The metro itself climbed from the nation's 21st-largest in 2006. Closings remained relatively steady; Centex logged 363 in 2006.
Other markets the company has recently exited include Detroit and Columbus.
The move underscores the company's strategy to focus on core metros where it can command a substantial market share and maximize operating efficiencies as it moves to an asset-light, build-to-order business model.
"The decision to wind down operations in Denver reflects our efforts to increase relative strength and share in markets that offer the best returns over time," said Callahan. "We're proud of the homes we've built in Denver, but unfortunately it does not fit our long-term strategic objectives."
CFO Cathy Smith spoke to the issue during the company's quarterly earnings call on July 30. "We are exiting some markets, combining some divisions where it makes sense and moving out of underperforming assets," she said. "These efforts are also part of our pact to profitability. We're doing much inside our company today to ensure we have a leading cost structure that is sustainable through the cycle."
Earlier this year, Atlanta-based Beazer Homes also announced plans to leave the Denver market by the end of summer.
Centex's Denver communities are located in Longmont, Fort Collins, Brighton, Thorton, Commerce City, Westminster, Aurora, and Castle Rock.
Learn more about markets featured in this article: Denver, CO.
