Housing Giants - August 25, 2008 - (Page 31) operations or limited liability companies,” Wilson says. “They look for good land buys from banks or builders who are about to go under. The separate entity then funnels the land to the building company.” He says the specialist in equity financing should be “a CFO-type who has strong, existing relationships in the investment community and knows how to structure partnerships with insurance companies and other investment groups.” Houston, Texas-based giant David Weekley Homes is not hiring. Chairman David Weekley says he’s already thinned the ranks down to the very best managers and wants to hang on to those rather than add specialists. But he sees wisdom in the idea. “We’ll probably need to develop more in-house capital structure expertise as we go forward,” he admits. “We’ll need that to grow as we come out of this downturn, because we do have big plans.” Littleton, Colo.-based management consultant Chuck Shinn believes banks may be largely out of the land acquisition and development financing market for as long as 10 years. He thinks land deals will be financed by institutional and private equity investors: “Funding for acquisition and development will go back to the way it used to be, before the banks got into it. We’ll see more insurance companies and pension funds than banks,” he says. “There won’t be a need for land acquisition specialists to chase a scarce commodity, but building company CFOs will need to know how to bird-dog private equity and have contacts in the investment community. A guy like that would be a good hire.” Tom Krobot, president of Atlanta-based Ashton Woods Homes, takes a contrarian view on the idea of hiring specialists to go after bank workouts. “There are already so many people out there looking for land deals, they are like flies at a picnic,” he says. “And besides, what the banks are doing is packaging troubled builder loans into portfolios that sell for between $40 million and $150 million. The loans are discounted, some to 25 cents on the dollar, some as much as 65 cents on the dollar. “They are not disposing of the properties individually,” Krobot says. “They get the loans off their books immediately. They don’t have to www.Housinggiants.com 8.25.08.Housing giants 31 http://www.davidweekleyhomes.com/ http://www.housingzone.com/giants/article/CA6466872.html?q=tom krobot http://www.davidweekleyhomes.com/ http://www.ashtonwoodshomes.com/ http://www.housingzone.com/giants/article/CA6513864.html http://www.shinnconsulting.com/ http://www.housinggiants.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.