Century Communities took advantage of opportunities during the downturn to buy land at discounted rates and started amassing favorable lot positions in 2009, said Rob Francescon, co-CEO of the Greenwood Village, Colo.-based builder. Century focused specifically on acquiring finished infill lots in master-planned communities when purchasing distressed properties so that the company could “go vertical” quickly in quality locations.
“By doing that, we were able to roll those communities out starting in 2011, more in 2012, and continuing into 2013 and beyond,” Francescon said.
Century reported $132.9 million in revenue on 545 closings in 2012, up 89 percent from $70.4 million on 252 closings in 2011. The builder raised $241 million in a 144A private equity placement from institutional investors in May. “It puts us in an excellent position for future growth both inside the Colorado market and outside the market,” said Francescon, who adds Century recently extended beyond the Colorado market and entered Austin, Texas.
The margin-driven Austin market has fundamentals similar to Denver—the average home sales price is just over $250,000, for example—and boasts housing inventory of less than three months, as well as permit activity well below historical norms, Francescon said. “Even though we’re not back to a normal year in terms of permit levels, there’s still a lot of supply that didn’t get put into the market over the past five years,” he said.
Based on Century’s recent expansion and the opening of new communities, Francescon expects the company to double in size in 2013. He also predicts year-over-year growth in 2013 will be more than 70 percent, a testament to the hard work of a core team that has been together for more than five years.
“We’ve worked together through the downturn; from a systems and operational standpoint, we’ve been able to hone those internal controls so that we’re positioned for future growth,” Francescon said. “Like any builder that survived and grew during the downturn, you had to have the right internal controls; you had to have the right cost structure.”
Century’s foresight afforded the company enough time to identify shrewd deals and enough cash to purchase valuable properties from banks and builders in financial trouble. As the builder rolls out those new communities, it will incorporate product updated to meet current home buyer trends: open floor plans, higher energy efficiency, and more indoor-outdoor living.
Fresh off a $241-million private equity investment, Century now has the capital and scale necessary to satisfy its plan for future growth, Francescon said. The next step will be an initial public offering of the company’s stock, he added.