According to Builder Magazine, for the second straight year AV Homes led the public builders in year-over-year closing growth. Ask Roger Cregg, AV Homes CEO, about our 41% increase in closings in 2016, and he’ll list a couple of factors. For industry M&A watchers the first one is fairly obvious— our purchase of Charlotte, N.C., powerhouse Bonterra Builders.
“We had the annualization of the Bonterra acquisition in July 2015 and had a full year in 2016,” Cregg says.
But there was another, less obvious, driver of our company’s strong growth: we expanded our offerings in the active adult sector, with two strong performers—Encore in Phoenix’s Southeastern Valley and Creekside at Bethpage in Raleigh – the latter of which has landed a spot on the annual Builder 100 list.
While Phoenix is our home base, we are a relative newcomer to Raleigh, which makes the success of Creekside all the more impressive. “We didn’t have division there,” Cregg says. “Raleigh never saw the big downturn the way Charlotte did. We decided to set up an operation in Charlotte to do the primary business. Then we actually used Charlotte to build a division [in Raleigh].”
In February 2014, we bought land for a 650-lot community in Raleigh. “The plan all along was to expand into Raleigh sooner rather than later, and active adult was a good way to get into it,” Cregg says.
If a builder is going to establish a foothold in the Carolinas, active adult isn’t a bad way to start. Creekside at Bethpage is “an age-targeted community, and those are on a roll in general,” says Jay Colvin, regional director of the Carolinas for Metrostudy. “North Carolina has a ton of baby boomer and retirement activity.”
With PulteGroup’s Del Webb 1,000-plus-home Carolina Arbors as major competition, AV provided a less costly option for retirees. “We priced ourselves a little lower than the competition in the market, and we’ve successfully been able to drive volume from that,” Cregg says.
The size of the community— specifically its amenities—helped AV achieve a lower price for the 1,320-square-foot to 4,038-square-foot homes.
AV offers four lines—the Star Edition starting at $265,900; the Great American Edition starting at $312,900; the Classic Edition starting at $344,900; and the International Edition starting at $389,900.
“When you look at amenities offerings, some of the larger communities have bigger amenities, including the sheer size of the clubhouse,” Cregg says, adding that with smaller amenities, “our costs are able to be lower than others so we can be more competitive on the pricing side.”
That’s not to say Creekside has sacrificed any features.
“It has the typical amenities,” Cregg explains. “It has a swimming pool, fitness center, meeting rooms, tennis, bocce, and all the amenities you would expect to find in an active adult community.”
Read the full article on builderonline.com.