Rather than seek new geographic areas for expansion, Emerald Builders sees plenty of new opportunities in its established markets—Houston and Phoenix—and in its two newest markets, Dallas and Austin.
|“We don’t sell price. It’s a feature/benefits issue.”
—Randall Birdwell of Emerald Homes
Existing Market Masters
Rather than seek new geographic areas for expansion, Emerald Builders sees plenty of new opportunities in its established markets—Houston and Phoenix—and in its two newest markets, Dallas and Austin. Emerald ranked 65th in the 2001 Giant 400 list, up from 74th last year. Headquartered at The Woodlands, a 27,000-acre, master-planned community in Houston, the company earned $233.8 million in housing revenues from 1394 closings in calendar year 2000. That’s up from $191.2 million the previous year, “a nice jump in revenue,” says Emerald president Randall Birdwell.
In Houston, homes are sold under the Emerald Homes and Dietz-Crane Homes brands. Emerald Homes is the Dallas brand, and Dietz-Crane Homes represents the company in Austin and Phoenix. Dietz-Crane targets first-time and first move-up buyers whereas Emerald’s market ranges from second move-ups to luxury home buyers. Approximately 40% of the company’s output is starter housing.
Four different product lines are offered at The Woodlands ranging from the $80,000s to the $300,000s. Floor plans cater to the demands of key demographic groups such as baby boomers, who are “asking for two bedrooms down—in effect, almost two masters. We’re seeing parents living with their children prior to going into a retirement home,” says Birdwell.
Emerald is arguably one of the best builders at The Woodlands. That’s no small feat for a master plan that bills itself as “America’s Hometown” and is the best-selling community in Texas. “The Woodlands is generating a lot of jobs,” he says. “It really has its own economic model, if you will, separate from the Houston model. There are 65,000 people living there now.”
Birdwell says Emerald’s success in the Houston entry-level market is “an affordability issue,” but this builder offers more than a good price. Through its new Emerald for Lifee program, the company markets homes that are energy efficient, environmentally friendly and technologically advanced. “We have the first Energy Stare home with a 90-plus rating,” he says. “It’s the most energy efficient home offered by a production builder.”
Emerald’s homes also meet the stringent Gold Level standards of an LP Engineered for Lifee home, which guarantees maximum energy consumption for heating and cooling. “Consumers are more aware of the total cost of living in a home,” says Birdwell. “I get letters from people who had an $800 a month electric bill because their previous home was so inefficient, and they’re paying $100 a month now.”
Other Emerald for Life program features include advanced wiring that supports state-of-the-art communications and electronic home systems control; whole-house ventilation systems; recyclable products such as cellulose attic insulation and fly ash concrete; in-the-wall pest control systems; and engineered wood products, such as I-joists and OSB sheathing, for the structure of the home.
“We don’t sell price,” he says. “It’s a feature/benefit issue. If you want a cheaper home, you can certainly buy it, but if you want to buy an Emerald, then you’re buying the benefits that go along with the features.”
By this time next year, Birdwell expects a successful launch of the Emerald for Life program and increased market share in Houston. “Within Houston, there’s an opportunity for us to go to the lower end of the market. We’ve been very successful in Phoenix competing against publicly held builders that have a tendency to build a more price-sensitive product, and we could duplicate those efforts in Houston. Austin and Dallas are new markets that are coming right along, and we will continue to see growth in those markets. Currently they are exceeding sales expectations.”
In Phoenix, Dietz-Crane will focus on accumulating enough land to build and sell 1000 homes in 2002. The company is also evaluating the introduction of higher-priced Emerald Homes product into the Phoenix market.
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