Housing Giants - August 11, 2008 - (Page 23) tHe stats the Drees co. giant 400 rank: 21 2007 closings: Type……………SFD, SFA Units……………3,031 2007 Revenues: Housing…………$1,104,901,000 Texas now contributes nearly 31 percent of The Drees Co.’s closings, slightly more than its home Cincinnati market, which are a combination of Ohio and Kentucky suburbs. The D.C. market adds 12.6 percent. The firm also has operations in Indianapolis; Nashville, Tenn.; and Charlotte and Raleigh, N.C. operations: Florida, Indiana, Kentucky, Maryland, North Carolina, Ohio, Tennessee, Texas, Virginia no HigH-Rises His Midwestern conservatism shows when Drees is asked what changes in product mix he contemplates. “None,” he says. “People still prefer single-family detached homes, and when the market comes back, I believe the value we’ll be able to deliver will be compelling.” Drees has always maintained a focus on ‘A’ locations close to suburban transportation corridors and builds detached move-up homes, many on large lots. (In Texas, the firm’s average sale price in Dallas is $360,000 and in Austin, $525,000.) “The rising price of gas may affect sales in far-distant suburban locations,” Drees reasons, “but change happens slowly in housing. People want what they want, and unless regulatory changes make it impossible for us to deliver houses at prices they can afford, I don’t see a big shift in the product preferences of our buyers.” strategy: Down 30 percent from its payroll peak, Drees is carefully managing its balance sheet, converting assets to cash and paying down debt. But Drees is also positioned to grow fast as recovery takes shape. One innovation: equity financing to cover shortage of debt financing from banks. “We think the D.C. suburban market in Maryland and Virginia will recover quickly because of bureaucratic restriction of supply. There’s actually a shortage of housing there. “We watch the inventories of unsold homes closely,” Drees says, “and we think the excess inventories in Texas and North Carolina will also be eaten up fast when demand returns to normal.” www.Housinggiants.com 8.11.08.Housing giants 23 http://www.housinggiants.com
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