Last month, I attended NAHB’s midyear meeting in Miami and had the pleasure of sitting in on a presentation by Daniel Swift, president and CEO of Des Moines-based architecture group BSB Design.
Achievers Make Big Moves
Movement in the rankings is one of the few characteristics builders in this segment have in common.
Four of the six home builders responsible for the biggest upward moves in this yearÆs GIANTS rankings landed in the Achievers section. In all, 96 builders in this segment rose in the rankings, including 20 new GIANTS that skipped right over the Strivers to land among the Achievers. Then thereÆs the other side of the coin: While one AchieverÆs ranking remained unchanged, 53 of them dropped in the rankings, some significantly, although none of the downward moves came close to the largest upward jump.
That prize goes to Flournoy Construction Co. LLC, a Columbus, Ga., builder that in 2003 completed a 900-unit rental project with a market value of $99.4 million, propelling the company from No. 353 last year to No. 197. The firmÆs total dollar volume came in at $102.1 million.
A more typical example of an Achiever with a big move is Probuilt Homes Inc. The Bakersfield, Calif., builder closed 251 detached homes for $49 million in 2002 but followed that with 389 closings for $100.6 million in 2003. That boosted Probuilt from a Striver at No. 316 to an Achiever at 201.
Another builder from CaliforniaÆs San Joaquin Valley, Wathen-Castanos Inc., closed 387 detached homes in the Fresno market for $108.3 million, good for a move from No. 293 to 190. Central California obviously has a robust market.
The plight of several high-profile builders makes it just as obvious that Colorado was not a fun place for much of 2003. McStain Neighborhoods, based in Boulder, struggled but still closed more houses than in the previous year ù 358 to 334, with a revenue rise from $99.2 million to $107.5 million. But McStain dropped from No. 186 to 192, probably because California and Florida had such buoyant markets.
The first-time GIANTS among the Achievers include such prominent names as Lee Wetherington Companies, a move-up and second-home builder in Sarasota, Fla., that entered the rankings at No. 203 on 265 homes closed for $99.3 million. Similarly, Detroit-area builder Gary Tadian, who made headlines last year with an equity deal with California investment Goliath Institutional Investment Partners, used some of that financing to acquire No. 278 S.R. Jacobson Development Corp., which helped propel Tadian Homes LLC into the rankings at No. 208 on 2003 revenue of $93.9 million.
Bottom line: When you look at the Achievers, which start this year at $62 million and run through $156 million, donÆt expect to see much that looks the same as it did the previous year. This is where the housing industryÆs volatility shows.