William Lyon Homes and M/I Homes are getting in on the expansion through acquisition game as Lyon plans to purchase RSI Communities and M/I Homes enters an agreement to purchase Detroit-based Pinnacle Homes. Lyon gains access to the Texas market, while M/I's plans represent the builders first foray into the Michigan market.
Lyon will pay $460 million for RSI Communities, which builds and sells in California in the Inland Empire and in Texas in Austin and San Antonio. Their specialty is entry-level homes. The Texas market represents the most active market in the country for housing starts and annual closings.
RSI began as an affordable-housing idea from Newport Beach entrepreneur Ron Simon, whose collection of businesses is best known for making home cabinetry. The homebuilder, founded in 2008, controls 3,173 home lots in the Inland Empire.
It builds in Southern California in Beaumont, Lake Elsinore, Menifee, Moreno Valley, Murrieta and San Jacinto. According to RSI’s corporate webpage, pricing starts in the low-$300,000 range.
But Lyon’s key to the deal, expected to close by the end of March, is exposure to the Texas market. At year-end 2017, RSI controlled 6,895 lots in Austin and 1,060 in San Antonio and is currently selling homes from the high-$100,000 range around San Antonio to a community in Austin where pricing starts in the high $300,000s.
Texas continues to lead the nation for housing starts and annual closings, according to data from Metrostudy released in its 1Q18 Housing Webcast on Feb. 21.
“The addition of RSI Communities to the William Lyon Homes family enables us to strengthen our position in the land-constrained Southern California market and gain immediate size and scale in Austin as a foothold in the attractive Texas region, which we view as the first step in a broader Texas strategy,” said Lyon CEO Matthew Zaist.
Lyon’s last major foray out of its home state of California was jumping into the Portland and Seattle regions by buying Polygon Northwest Homes in 2014.
And in 2017, that deal paid off. Lyon delivered 16 percent more homes — 3,239 — than the previous year as homebuilding revenues rose 28 percent to a record $1.8 billion.
Lyon’s top market was California (919 sales, up 27 percent in a year) and followed by Oregon (747 sales, up 4 percent). Washington was the No. 4 market with 516 sales up 79 percent.
The move expands the footprint of M/I Homes into Michigan, where it lacks a market presence. Pinnacle now controls more than 1,000 home sites and delivered 214 homes last year. Pinnacle was founded in 2005 by Howard Fingeroot and Steve Friedman. The Bloomfield Hills, Michigan-based homebuilder works primarily in upscale homes.
"We believe this acquisition represents an excellent strategic fit for M/I Homes and further enhances our market position with a well-established operation and land position in a dynamic and growing housing market," Bob Schottenstein, president and CEO of M/I Homes, said in a statement.
Fingeroot, Pinnacle's managing partner, will join M/I Homes as an area president and will oversee the Detroit market.
"Howard brings with him nearly 25 years of homebuilding experience, knowledge and expertise and will capably lead our operations in this exciting market. We welcome Howard and his team to our company," Schottenstein said.
In its annual report released this month, M/I Homes said it saw a record net revenue of $1.96 billion, almost all of which came from home sales. It delivered 5,089 homes last year and has 28,500 lots under control at the end of the year. It's now marketing homes for sale in 188 communities in 15 markets.
In its latest earnings outlook, M/I estimated it would spend $550 million to $600 million on land purchases and land development this year. The company develops homes in the $170,000 to $1.4 million price range and has constructed more than 105,000 homes since its founding in 1974. It has 1,238 employees.
Reported by Orange County Register (Feb. 21, 2018) and Columbus Business First (Feb. 26, 2018)
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Construction of new homes in the U.S. jumped almost 10% in January to an annual rate of 1.33 million. That’s the second highest level since the Great Recession and it easily exceeded the 1.24 million forecast of economists polled by MarketWatch.
Permits to build new homes also hit a 10 1/2-year high, rising 7.4% to an annual rate of 1.4 million.
What happened: Housing starts bounced back in January after a sharp decline in December tied to poor weather.
Building increased in the North, South and West. And two-thirds of the new units on which construction began were single-family homes, the bread-and-butter of the housing market.
Big picture: Housing starts are 7% higher compared to one year ago, reflecting a vibrant real estate scene that shows no sign of slacking off against the backdrop of the strongest economy in years.
The biggest problem? Demand for housing has continued to outstrip the number of properties available for sale, pushing prices higher and frustrating many would-be buyers.
Builders have responded in part by steadily increasing construction of single-family homes, a sign they have confidence in the economy. Stand-alone homes are almost always sold, rather than rented.
What they’re saying: “With home ownership turning higher for the first time in 13 years, a record-low number of single-family homes on the market, and builders more upbeat than during the housing bubble, residential construction should track higher regardless of what Mother Nature throws at it,” said Sal Guatieri, senior economist at BMO Capital Markets.
Stephen Stanley, chief economist at Amherst Pierpont Securities, noted that most of the starts gain came from multi-family buildings.
“The more reliable single-family starts figure posted a decent gain of 3.7% to 877,000 in January, in between the November blowout reading of 946,000 (which likely reflected a catch-up after hurricanes disrupted construction in September and October) and December hangover reading of 846,000,” Stanley said.
“To put the figure more in perspective, the 2017 average for single-family starts was 849K, so January’s level represents a continuing solid uptrend, especially considering that weather may have held activity down somewhat last month. The single driving fundamental in the housing market remains that demand is outstripping supply, so upside surprises on housing starts are just what the doctor ordered.”
Reported by MarketWatch (Feb. 16, 2018)
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Jay Thrower has joined Beazer Homes as Area President for Charleston and Myrtle Beach, South Carolina. Thrower began his homebuilding career in Charleston, initially concentrating on community development and land development
Thrower steps into the position previously held by Douglas Schwartz, who has moved to KB Home and is now serving as President in the Carolinas. KB Home also has a new president in Florida. The company has appointed Fred Vandercook as president of its Tampa division.
Thomas Sewitsky, who previously held the top position in the Carolinas for KB Home, is now serving in the role of Regional President for Epcon Communities in the Raleigh-Durham market.
Toll Bros. named Rodney Tucker vice president of the company’s west Florida division.
n his role Tucker will manage homebuilding operations in Toll Bros.’ newest west Florida community — The Isles at Lakewood Ranch in east Manatee County. The community will open in late 2018, according to a press release. It will include about 450 single-family homes.
With the Lennar-CalAtlantic merger complete, CalAtlantic Executive Chairman Scott Stowell has joined Lennar’s board and CalAtlantic CFO Jeff McCall has been named SVP of Corporate Services at Lennar.
For complete information on the top 300 Home Builders including all corporate and division offices and top personnel, refer to The National Builders Directory and Online Database.
Meritage Homes of Arizona has purchased 197 lots in Goodyear, Ariz., in two separate transactions at a total cost of $7.3 million.
The new community in Palm Valley will include (86) 60’x120’ lots and (111) 36’x106’ lots with a preliminary plat already approved.
Land Advisors Organization Scottsdale team of Ryan Semro, Ben Heglie and Bret Rinehart represented the Sellers, Golden Buffalo Golf Properties LLC and Fairways Range LLC in two transactions on January 22 and 24, 2018.
Reported by Arizona Big Media (Jan. 30, 2018)
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Trammell Crow Residential plans to build roughly 290 apartments in Avondale Estates, Ga., outside Atlanta that will be part of a new mixed-use project.
A recent report by Avondale City Manager Clai Brown’s office says the project is “roughly bound by US 278 [East College], Maple Street, Hillyer Avenue and the CSX tracks. The developer is interested in pursuing a mixed use development with 290 residential units and 5,000 s.f. of ground floor retail.”
It will be located near the Avondale MARTA station, which also is being turned into a mixed use project. The project will go before the city’s Architectural Review Board on Feb. 5.
Reported by decaturish.com (Jan. 29, 2018)
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M/I Homes gears up for new projects in Illinois and Florida as it pursues development approvals and land purchases. M/I Homes Chicago division has received recommendation from an Aurora City Council committee for a proposed 171-unit townhouse development.
The Planning and Development Committee voted 3-0 to recommend the development for 25 acres in the southwest corner of what is known as the Brach-Brody property.
It is considered a key piece of property along Route 59 in Aurora. The 25 acres is owned by the Indian Prairie School District, and was once considered as a site for a new high school. That school was built further north so the school district wants to sell the land.
M/I Homes said the development would be a mix of two- and three-bedroom townhomes, each with two-car garages. There would also be about a one-acre park on the site.
In Florida, M/I Homes of Sarasota LLC recently paid $6.25 million for 90 acres of land east of Interstate 75 where it plans to build 170 single-family homes and villas.
The proposed development, called Hidden Creek, will include a “significant portion” of homes set aside as attainable housing under county guidelines, the company said. Prices will range from the mid-$200,000s to high $300,000s, the builder said.
“We are proud to bring attainable housing to the area and will, based on the county’s affordable guidelines, offer home ownership with monthly payments similar to, or even less than, rents in comparable sized homes,” sales and marketing manager John Sackett said in a statement.
M/I bought the land, three miles east of I-75 at 9105 Fruitville Road, in late December from Sarasota Land Developers LLC, a company headed by Douglas J. Weiland of Palm Harbor and Robert L. Koontz of Bradenton, county records show. Sarasota Land acquired the property for $2.39 million in March 2016.
The purchase comes a month after M/I bought 67 acres east of I-75 and south of Clark Road for $7.9 million for a community of 107 single-family homes called Rivo Lakes.
Homes in that Tuscan-inspired community will be pricier, with sizes ranging from 2,291 to 5,000 square feet and priced from the $400,000s to the $700,000s.
Those two are among five communities the company will open this year in the Sarasota-Manatee region.
Reported by Chicago Tribune (Jan. 31, 2018) and The Herald-Tribune (Jan. 26, 2018)
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Taylor Morrison has shuffled some of its top players and decision makers as it seeks to build its presence in key markets. The home builder has appointed new division presidents in Houston, Austin and Atlanta. Amy Rino was named the new Houston division president, replacing Jonathan White, who has relocated to Georgia to head up the Atlanta division. Meanwhile, April Solimine has been named president of its Austin division.
A Houston native, Rino was the Houston division president for Darling Homes since 2013. Now she will oversee the three Taylor Morrison Home Corporation brands in Houston: Taylor Morrison, Darling Homes and Bonterra.
Rino also will work on Avalon, the premium master-planned community brand. This new structure makes Houston Taylor Morrison’s largest division and makes it the third-largest homebuilder in the city.
“The creation of a unified Taylor Morrison and Darling Homes team, to me, is as much a logical business decision as a dream come true,” Rino said. “Together we are now a powerful homebuilding force in Houston delivering multiple lines of products to our homebuyers with a focus on creating a differentiated customer experience.”
Solimine, who most recently served as vice president of operations for the Austin division, brings almost 20 years of home building experience to her latest role with Taylor Morrison.
“April delivers the leadership and experience that will help us continue to excel as one of Austin’s most respected home builders,” said Charlie Enochs, area president for Taylor Morrison. “We’re looking forward to great things from our Austin division.”
Solimine will oversee all aspects of Taylor Morrison’s home building operations and land development in Austin, where the company currently builds 15 neighborhoods in nine distinct communities, including the division’s first 55+ community, Heritage at Vizcaya in Round Rock.
Prior to her most recent tenure with Taylor Morrison, Solimine served as a vice president of sales and marketing for CalAtlantic, Meritage Homes and Taylor Morrison.
White, who previously served as the division president for the Houston division, will be responsible for the operational aspects of the home building and development business, provide leadership, establish strategic direction, and nurture a team-oriented culture for the Atlanta division.
“We are thrilled to have Jonathan lead our Atlanta division,” said Steve Kempton, area president for Taylor Morrison’s Southeast region. “Jonathan has built a remarkable record during his tenure with Taylor Morrison and has been leading high-performance teams and maximizing business opportunities in the Houston market. I am confident that he will help accelerate our growth in the Atlanta market too.”
White has been with Taylor Morrison for 13 years, originally joined the company in 2004 as a land project manager and was promoted to land manager in 2005. In 2007, he was promoted to vice president of land acquisitions and development for the North Florida division.
Reported by Houston Agent Magazine (Jan. 29, 2018) and Builder Magazine (Jan. 26, 2018)
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