20 year-old homebuilding company Wilshire Homes was acquired by MHI Central Texas, parent company to the Coventry Homes and Plantation Homes brands. An article written by Shonda Novak in today’s Austin American-Statesman indicates that the expanded company aims to build more than 600 homes per year and generate $180 million in annual revenue by 2014.
MHI Central Texas is an affiliate of McGuyer Homebuilders, Inc out of Houston. Initially, the new division will seek to sell more than 400 homes in 2011 in Austin and San Antonio. The acquisition of Wilshire does not appear to cause any conflicts with the existing MHI brands in Central Texas as they do not generally compete directly with one another. No layoffs are expected.
Mark Sprague, Director of Business Development for Mission Mortgage, was quoted in the article, providing his insight into the new construction real estate market. Sprague discusses the tight market on lots in our area and the impact that has on market share. He also looks at consolidation as a trend that will continue.
Here are the excerpts from the article in which Sprague is quoted:
The deal is a win for MHI and Wilshire, because “builders that can acquire lots in an already tight market are able to garner more market share,” said Mark Sprague, a veteran housing industry consultant who is director of business development for Mission Mortgage in Austin.
Sprague said the purchase “exemplifies one of several industry sector consolidation themes that will continue to recur as the nation comes out of housing’s worst slump in the last 60 years.”
On one hand will be companies with the capacity and business volume to have access to capital resources, and on the other will be those that succumb to the credit squeeze. Even though a builder might have made it through the downturn, “if they owe money on land and can’t borrow more money to build on it, they’re stuck,” Sprague said.
In MHI’s case, Sprague said, a builder that ranks in the top 25 nationally “remained in strong enough financial standing to keep its lines of capital access wide open, positioning itself for an opportunistic grab of both land and, in this case, a strong homebuilding brand led by an operator of impeccable repute in the markets, Ed Horne.”
Mission Mortgage is proud to have an expert like Mark Sprague on our staff. He not only helps guide our business, but shares his knowledge and expertise with builders, developers, and realtors throughout the Austin area to help them to better succeed. If you have a question for Mark, please email email@example.com.