Big Builder Online explores the management, finance, and operating concerns of America's blue-chip builders—corporations that account for more than half of all residential construction.
Big Builder's Atlanta Dream Team Seeks Victory at Vickery
Amid the ongoing economic and real estate storms, many new-home communities have a big question to answer. Will new economic realities take away from the special character designed into a community that came online during real estate's mad run to its 2006 peak? In other words, can the second half of a place be as special as the first half when the first half took off during the "funny money" days, and the second half needs to scrap it out when greenback dollars and the ways to earn them are scarce?
Specifically, what do you do with an award-winning New Urbanism community that did spectacularly out of the gate in the halcyon days of yore (2004, 05, 06, and a bit more), but then hit the wall of real estate's alternative reality?
How do you sustain that character in a still-innocent and vulnerable place when it's less than half complete, and prices, absorption levels, and demand have fallen off a cliff--and, alas, the original developer builder has had to cede the property to its banks?
That's exactly what the Big Builder '09 Virtualevent Atlanta Dream Team faces as it takes on its land parcel challenge--the "future Phase 8"--of the lauded Vickery community, which hit a wall in late 2007, and which has seen its assets go back to Wachovia by late last year. The team--a hand-picked Dream Team of planning, design, business, and marketing executives from different organizations competing Atlanta's market--will focus on what to do with 22 acres of undeveloped land at the Southwest end of Vickery's 214-acre traditional neighborhood expanse. Their goal as they brainstorm ideas about how to bring value to the land and offer a viable big builder business vision for a distressed parcel?
Here's the current land plan:
Do it so that it keeps the sense of place Pam Sessions and the original design teams infused in Vickery, but also build an affordable product in the "new normal" definition of the word affordable. The Atlanta team:
Chuck Fuhr, president, Atlanta Division, Ryland Homes
Michael Langella, senior vice president, Reynolds Signature Communities
Bill Evans, co-founder, John Thomas Homes
Michael Medick, architect
Jennifer Landers, regional marketing director, Newland Communities
Steve Palm, principal, SmartNumbers
Among the challenges, Vickery is a total EarthCraft certified community, so the team will have to figure compliance with this certification in its cost planning for the project. Here's a brief video in which Big Builder editorial director John McManus discusses the project and the talented team who're working on generating a Big Builder '09 Virtual plan to present the week of Nov. 16-20.
Did Home Builders Trade Off Better Land Pricing to Juice Cash Generation?
Way back when--in December and January--as we were tallying up Net Operating Loss tax refunds home builders recouped after the extension from 24 months to 60 months backward, the clawback number quickly climbed well north of $2 billion without so much as breaking a sweat. "That was the stupidest thing that ever happened," said one of our highly placed public home building company executives. Right about now, after a phalanx of home builders completed an 18-month tear to devour finished home lots everywhere at prices that swelled to double or triple distressed-deal pricetags, the sense of this comment, "the stupidest thing that ever happened," becomes clear.
A fourth of the way into the summer home-builder earnings season, it has become apparent that a) new-home sales dropped precipitously after the homebuyer tax credit expired at the end of April and b) there is as yet no sign that sales are picking up. With NVR (NYSE:NVR), Meritage (NYSE:MTH), Ryland (NYSE:RYL) and M/I Homes (NYSE:MHO) having reported, there has been no commentary that would signal an upturn, although all four companies' management remains relatively optimistic.
When even Federal Reserve Chairman Ben Bernanke describes the economy as "unusually uncertain," regular investors are bound to feel frustrated as they search for clarity amid divergent signals in the economy and stock market. Many analysts expect the stock market to be stuck in a relatively narrow trading range through the rest of the summer as investors debate two competing theories -- that the economy is headed back into a recession, or that the economy is slowing somewhat but still in a sustainable recovery.
More than 1 million Energy Star homes have been built in the United States since the program first began labeling homes in 1995. Households living in Energy Star-qualified homes will save more than $270 million this year on their utility bills, according to the program's Web site. Big Builder Online wants to know what percentage of your new homes are built to Energy Star minimum standards.
Green building pioneer Alex Wilson, founder of BuildingGreen in Brattleboro, Vt., was named this year's recipient of The Hanley Award for Vision and Leadership in Sustainable Housing. Wilson was selected from among 12 distinguished nominees by a panel of judges that included Michael J. Hanley, president of The Hanley Foundation; Frank Anton, CEO of Hanley Wood; Joyce Mason, vice president of marketing for Pardee Homes; Nate Kredich, vice president of residential market development for the U.S. Green Building Council; and last year's Hanley Award recipient, Edward Mazria of Architecture 2030.
Survival of the fittest was the rule for 2009 as most of the public home building companies did their best to shore up their balance sheets and push out debt maturities. They were not all equally successful. Here's how they did.
