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Any builder producing 1,000 units a year or more is likely to complain occasionally that home building isn't as much fun as it was when the company was smaller. Visit some of the firms on the Achievers list, and you might discover where the fun went.
They're not tied to a production machine that demands as much attention to process control. That means more time to think, plan and innovate.
Tempe, Ariz., semicustom luxury builder T.W. Lewis Co. moved from No. 163 to No. 152 on our GIANTS list this year, which probably shocked Tom Lewis, whose goal is to keep unit volume steady in the low 200s each year. But Lewis closed on 259 homes in 2002, up from 224, and revenue also rose, from $103.3 million to $119.4 million.
"We operate in the top 10% of the Phoenix market at an average sale price of $475,000 while the big public builders beat each other's brains out at $180,000,"he says. "Most of those guys are moving closer to $100,000 to try to tap into the entry-level market. That seems to be letting us capture greater market share in the high end."
Housing is still a location-driven business, Lewis says. "As long as we have good locations, we'll be OK. We have small, medium, large and extra-large product lines. Until the price sensitivity declines, we'll do more of the small and medium and fewer of the extra-large houses."
He has 10 locations, and that's all he plans to have. "We bring new ones on-stream as the old ones build out."
Jacksonville, Fla., builder Ron Coppenbarger is more growth-oriented than Lewis. He moved Coppenbarger Homes Inc. from No. 287 to No. 259 by growing revenue from $49.7 million to $64.9 million, as units went from 227 to 306. He's not done yet, as his definition of fun is finding the new product that fills a hole in the market.
"We'll do close to $90 million this year if I can get a couple of condo townhouse projects on the market," he says. "Townhouses are really taking off in Jacksonville. We've got a 184-unit project that we think will sell out in three or four months. Townhouses will be 20% of our revenues this year. There's a big pent-up demand for this product here."
Coppenbarger says he fields inquiries "all the time" from people who want to buy his business, but it's not for sale. "They don't want to pay what it's worth. I'm not going to give it away. Right now, times are good in Jacksonville, Florida. I'm having too much fun."
A few builders in the Achievers ranks think growing a company really fast is the ultimate fun. Count Kara Homes president Zudi Karagjozi as one.
East Brunswick, N.J.-based Kara makes its first appearance on the GIANTS list at No. 182 with 290 closings for $102 million in 2002 revenue. The firm closed three houses in 1999 and 17 in 2000. By 2004, Karagjozi says, Kara will close 2,500 to 3,000 homes.
"We have pre-sales and deposits for about $200 million in 2003 revenue," Karagjozi says. "We should end 2003 with $500 million in backlog. We might hit $700 million to $800 million in sales. In 2004, we'll do over $1 billion in deliveries."
Kara builds attached townhouses and single-family homes in a 60/40 ratio.
"We'll be the number-one-selling builder in New Jersey by the fourth quarter of this year," Karagjozi says. "We'll have $280 million to $300 million in sales that quarter. Next year we'll do between 10% and 12% of all the housing completions in New Jersey. My goal is to make the Fortune 1000 list and then do an initial public offering."
Kara ended 2002 with eight projects, now has 11 and plans for 30 by the end of this year. The firm will begin operations in New York, Connecticut, Pennsylvania and Maryland soon. Karagjozi says that by next year he will be "one of the richest, if not the richest, of all the builders."
