Innovative: The New Home Company
Larry Webb, CEO of The New Home Company, starts each workday by digging through the latest batch of customer satisfaction surveys from recent buyers and tenants. “I’ve always believed that building communities comes with a responsibility to be there for our clients,” said Webb. “We want to raise the bar for everyone. “
Nearly four decades of real estate veteran, Webb’s competitive spirit first manifested in his passion for the sport. He grew up in Buffalo, played football at State University of New York at Cortland, and coached the Monument Mountain High School football team to the Massachusetts State title in 1974.
But a burning interest in urban issues forced Webb out of teaching to study urban and regional planning at the Harvard Graduate School of Design. After earning a master’s degree, he became a consultant to market research firms in Washington, DC and Denver. One of his clients hired him to help plan and design the first phase of Highlands Ranch, a planned 22,000-acre community in Denver.
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Webb moved to Los Angeles in 1987 to become Division President at Kaufman & Broad (now KB Home). A few years later he became president of Greystone Homes in Orange County. In 1995, Webb joined UK-based John Laing Homes as CEO of US Operations. Over the next six years, he grew the business to eight divisions in seven states and completed a leveraged buyout of the unit.
Laing was acquired in 2006 by Middle Eastern giant Emaar Properties for $ 1.05 billion, then the largest private residential transaction in U.S. history. Webb left Laing in 2008 as the market collapsed. A year later, John Laing Homes filed for Chapter 11 bankruptcy; the company eventually liquidated its assets.
Meridian is a collection of locked coastal residences located in Newport Beach, California. The 83 apartments, townhouses and penthouses feature floor plans ranging from 2,172 to 3,833 square feet of living space with up to three bedrooms and 3 ½ baths. Photo: Eric Figge Photography.
THE RIGHT TIME FOR A NEW START
“I felt like the bottom of the market was the right time to start a business,” he said. “We had access to land, less competition and the ability to attract good people. “
He assembled a management team of industry veterans: COO Tom Redwitz, who previously headed the Laing Luxury Homes division; CFO Wayne Stelmar, longtime colleague of Webb; and Chief Investment Officer Joe Davis, former executive of Irvine Corporation, a developer of coastal properties. Each invested $ 15 million in the new venture.
Over the next 12 months, the young company hired 30 people, established a relationship with Irvine Company, and attracted three outside investment groups. “It was a really opportune time as a lot of people were looking for work and land prices were low,” said Redwitz, a licensed architect who oversees the in-house design team and now serves as the chief investment officer.
Meridian living space. Eric figge photography.
The first group of employees agreed to work for free for the first two months while the company found its place. New Home’s original goal was to build luxury homes in prime coastal locations across Southern California. He gradually extended his reach to Sacramento and the Bay Area, while expanding his expertise from single-family homes to townhouses and condominiums.
As the economy began to recover, senior executives at the company recognized that further geographic expansion would require faster access to debt and equity financing. On January 31, 2014, The New Home Company (NYSE: NWHM) debuted as a publicly traded company through an initial public offering that raised $ 86 million.
Webb, a critic of public builders’ emphasis on short-term results, is committed to staying committed to the company’s core values. “This means we will never close a property that is not ready due to a quarterly reporting deadline,” he said. “It’s just not who we are.”
LISTENING TO THE CONSUMER
Multi-family housing accounts for 40% of current new home projects, from low-density townhouses, to mid-rise townhouses built on a podium parking lot, to its iconic multi-family properties, such as the Meridian, a community of houses. luxury row of 79 adjoining houses. at the Fashion Island outdoor mall in Newport Beach.
New Home also specializes in master plan communities, such as The Cannery, a farm-to-table community in Davis, Calif. That combines attached and secluded residential options surrounded by parks and a working farm.
The company, headquartered in Aliso Viejo, Calif. (With offices in Walnut Creek, Roseville and Agoura Hills, Calif., And Scottsdale, Ariz.), Relies heavily on focus groups and market research to understand the preferences of specific buyers. new community.
The 1,644 square foot Farm House Visitor Center at The Cannery, The New Home Company’s planned farm-to-table community in Davis, California. A working farm on the property adds a unique element to the living environment, a mix of attached and optional detached accommodation. Photo: Chris Mayer.
These comments often influence practical planning and design decisions at New Home, from how bathrooms are configured to availability of storage space. “We’re not a company that takes plan number 105 off the shelf,” Redwitz said. New Home is regularly recognized by the Homebuyers’ Choice Awards, awarded each year by the consumer research firm Eliant.
In recent years, as prime coastal locations have dwindled, New Home has broadened its portfolio to include more “affordable” housing. In 2016, its average selling price was $ 2 million; this year it will be less than $ 1 million.
It’s great with chief designer Redwitz. “I’m as excited today to design a really cool 900 square foot condominium as I was three years ago designing a $ 2 million unit,” he said. “Developing a creative, efficient and economical design is a really stimulating puzzle to solve. “
The price change helped New Home shorten construction cycles, control costs, turn inventory faster, and increase residential deliveries by 36% in 2017 over 2016. Total revenue increased 8% year-over-year – $ 751.2 million in 2017, up from $ 694.5. in 2016. But the average selling price of New Home fell by 19% due to changes in the product mix.
Photo: Chris Mayer.
NOURISHING A CULTURE OF CREATIVITY
Creativity and attention to detail are the hallmarks of New Home design. Its Cobalt at Esencia duplex community in Rancho Mission Viejo, Calif., Took top honors for Best Multi-Family Housing Community at this year’s Gold Nugget Awards.
This emphasis on creativity is reflected in the work environment that the company has set up for its 300 or more employees. “I love to see our people being promoted, taking on more responsibility and growing in our organization,” said Webb.
New Home is also focused on creating a culture that attracts top talent, from millennials to industry veterans like Leonard Miller, who joined the company in early 2017 as COO after leaving at the retirement of co-founder Joe Davis. Its unique benefits include student loan repayment assistance and a condensed work week that ends every Friday at 3 p.m.
New Home employees are active in the community, supporting organizations such as the Second Harvest Food Bank of Orange County and HomeAid, which are building and renovating shelters for the homeless in transition. The company sponsors and hosts an annual golf tournament that raises $ 300,000 per year for Interval House, which operates a crisis center for victims of domestic violence.
For Webb, The New Home Company, by its very name, champions change in an industry that is often resistant to change. “When we first named the company, I think a lot of people probably laughed at it,” he said. “But I don’t think they’re laughing anymore. I think they figured it out.