Jared St. Aubyn shares what he's learned since starting his own business and how it's grown to become Colorado's top private builder.
Jared St. Aubyn started his home building company at the absolute bottom. The market had tanked by 2009, yet the University of New Mexico graduate impressed investors as a construction manager and urged him to launch his own company. St. Aubyn set a lofty goal of building 50 homes in his first year. He closed 166, taking advantage of the availability of foreclosed lots, a rebounding local economy, and differentiated the business by offering value to military personnel and other first-time buyers with standard features such as wood flooring, granite countertops, and front yard landscaping. Today his company is the largest private builder in the state, ranking No. 65 among Professional Builder’s Housing Giants with $197 million in annual revenue and 658 closings last year.
Q: What were the more valuable lessons you learned working with other builders that you applied to starting your own company?
A: Prior to starting Saint Aubyn Homes in 2009, I had the privilege of working for Hensel Phelps Construction Co. from 2001 to 2004 and then for Journey Homes/J&J Construction from 2004 to 2009. The lessons and knowledge I gained from both of those organizations have been invaluable to me during the operation of Saint Aubyn Homes. While I could probably spend hours listing what I learned from these companies, two specific lessons have been particularly valuable. The first and most important lesson I learned is the value of urgency at every level of the company. From purchasing, to scheduling, to sales, having an overwhelming sense of urgency has allowed all of the team members at Saint Aubyn Homes to reach extraordinary levels of performance. The second piece of wisdom I took with me is to focus on what you can do as a company that differentiates you from your competition. That idea has shaped the business plan and model for Saint Aubyn Homes since our inception.
Q: Briefly describe the process that enables you to build a house in less than 50 days?
A: Our production process is based on a simple premise of “get green and grow or get brown and die.” By this we mean that we expect every home to have a trade partner in the home every day pushing its progress. A home with no activity in a given day is marked as a dead day. Our overwhelming production goal is to avoid dead days. In order to make this a reality, our site superintendents are tasked with ensuring that all obstacles that would inhibit a trade from completing their scheduled task are removed. This has created a true team atmosphere between our trades and our site managers. In our current labor-constricted market, the emphasis on a positive relationship with our trades is more important than ever.
Q: You relied on private equity investors for capital when you started Saint Aubyn Homes; have your financing sources changed since then?
A: Financing options have certainly changed dramatically since 2009. Notably, banks have begun to aggressively pursue construction lending which has reduced our need for private equity financing. It will be interesting to see when, or if, banks will make the jump back into land A&D lending. We haven’t seen them jumping back on that train quite yet. Until that happens, we will still need to look to the private equity market for A&D.
Q: Is demand from first-time buyers still going strong in your market?
A: The demand for first-time buyers is still very strong in both southern and northern Colorado. However, the escalation in land prices along with dramatic increases in labor and material costs have made it incredibly difficult to hit the first-time buyer price point while still hitting the margins we look for in our business model. That being said, we will continue to look for any opportunities to sneak into this market. PB