Land

Century Lands Landmark Homes, A Nashville Launch Pad

With the purchase of Landmark Homes of Tennessee, Century deepens its local scale. As a top-5 player, it could secure sustainable strategic capability on both its lot pipeline and customer-segment exposure among inbound domestic migrants seeking affordability.

Together with

Land

Century Lands Landmark Homes, A Nashville Launch Pad

With the purchase of Landmark Homes of Tennessee, Century deepens its local scale. As a top-5 player, it could secure sustainable strategic capability on both its lot pipeline and customer-segment exposure among inbound domestic migrants seeking affordability.

Together with
January 23rd, 2024
Century Lands Landmark Homes, A Nashville Launch Pad
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Looking to secure heft, deepen scale, and drive affordability in one of the U.S.'s hottest new residential development and construction markets, Century Communities has purchased "substantially all the assets" of Nashville-based Landmark Homes of Tennessee, an operator whose area reputation and lot pipeline could give Century a sustainable boost into a top-five position in a coveted, meteorically-growing market.

When we we look at where we want to invest our money for acquisitions, although we're continuing to support all of our geographies, there's more of a focus on areas that tend to be more affordable with more in-migration that stand out," Dale Francescon, Chairman and Co-CEO of Century Communities tells The Builder's Daily. "We've done eight M&A deals over the years, and we've looked at so many more. It has got to be a fit with people as well. Gary and Nick Wisniewski are not joining the Century team as employees, but, in a bigger sense, they're joining our team in the sense that they're going to become a source of lots for us on a go-forward basis. We're excited about that part of the arrangement as well."

Featuring two generations of principals on both sides of the transaction, the acquisition strategically expands Century's capability both in ready and future lots and stronger access to in-bound customer segments seeking relative affordability to complement its Century Communities and Century Complete lines of entry-level homes. Financial terms of the deal were not made public.

According to the Century Communities' press statement,

This strategic acquisition further cements Century Communities' position as a leading builder in Greater Nashville and grows Century Communities' already sizable presence in the fast-growing metro with over 800 additional current and future lots, including homes now selling at six active Landmark Homes communities in Lebanon, Mount Juliet, Hermitage, Murfreesboro and Brentwood. Focused on first-time and move-up buyers, pricing for Landmark Homes' existing inventory ranges from the low $300ks to the low $600ks.
"Landmark Homes has worked hard to build a respected brand in the Nashville area for decades, and we are proud to welcome them to the Century Communities team," said Dale Francescon, Chairman and Co-CEO of Century Communities. "This acquisition allows us to expand our already strong footprint around Nashville and deliver A Home For Every Dream® to even more buyers in desirable locations."
"We are excited to build on our strong track record of successfully acquiring other homebuilders with another strategic acquisition as we add existing and future lots to our land portfolio," said Rob Francescon, Co-CEO and President of Century Communities. "This transaction furthers our goal of increasing community count and market share throughout and beyond our geographic footprint through the opportunistic acquisition of other homebuilders to augment the organic expansion of our land portfolio."
Map showing operating area and active selling neighborhoods of Landmark Homes of Tennessee
Image source: Landmark Homes

Landmark Homes, a family-run central Tennessee area operator started in 1991 by owner Gary Wisniewski, caught the attention of acquisitive public companies as having an owned- and controlled lot pipeline and a renewable – potentially expansive – opportunity to replenish it. The Wisniewski name means credibility and integrity in the Greater Nashville market. Following Century's purchase of Landmark, Gary Wisniewski and his son Nick – Landmark's chief operating officer – will continue to source and develop land for delivery to Century, including 13 communities already in the Landmark-owned- and controlled lot portfolio.

This is one of the best markets in the country," says Tony Avila, CEO of Builder Advisor Group, which served as exclusive financial advisor for Landmark Homes. "Finding lots in greater Nashville, is like finding a needle in a haystack. Gary and Nick and their team are some of the most meticulous, forward-planning guys you'd ever know, and they're known as gentlemen people want to do business with."

Century's move reflects an intensifying drive among the nation's large, deeply capitalized multi-regional enterprises – both public and private portfolio members of Japan-, China-, or Canada-based residential development and construction giants – to amass deep local scale. By owning greater slices of market share, a firm can outflank competitors for both homebuying customers and local-area clout among land, materials, and construction trade suppliers to hold some sway over their costs – and pricing – to build and develop.

On point in the Landmark Homes acquisition process, Rob Francescon's son Jim Francescon, President of Century Living and a corporate VP at Century Communities, represented a next-generation strategic player, as did Nick Wisniewski, who'll be a big part of an ongoing land and development pipeline from which Century plans to draw.

Jim has been with us now for over five years, and he's got a background in investment banking," Dale says of his nephew. "As the market for M&A has picked back up, we've put Jim in charge of our M&A activities. As we look forward, you'll be hearing Jim's name more and more as our activity increases. Public builders are getting more market share all the time. We look at this as something that we're just going to continue doing on an opportunistic basis as we find operators that fit within our platform."

From the press statement:

I'm proud of the outstanding work by the Landmark Homes team in building and delivering high-quality new homes for over 30 years," said Gary Wisniewski, President and CEO of Landmark Homes. "With their shared passion for great homebuilding, commitment to excellence, and industry-leading homebuying experience, Century Communities is the perfect organization to expand on our mission of making homeownership more achievable to buyers in the Greater Nashville area."

We've written about this recent post-pandemic, post-easy-money era as an inflection point for the acceleration of concentration of new homebuilding development and construction among fewer, more powerful national players.

We've also written:

The caveat practically everybody has top of mind is that every scenario comes paired up with ongoing uncertainty and volatility, both of which heighten organizations' need for execution and operational excellence at both their leadership and staff levels. With data and tech solutions in the hands of each part of the value-cycle, teams become increasingly accountable for business outcome results rather than vertically-focused, task-oriented performance.
In particular, the land game's new rules require its players to recognize, value, and execute predictively and repeatedly the end-to-end digital thread between every lot and its potential homebuying customer, with a full-stack understanding and engagement in every hand-off and every process in between. That's the kind of tactical and operational excellence operators are on the look-out for right now.

Arguably, metro areas like Nashville – whose economic trajectory features both organic expansion and a more recently-minted, post-pandemic magnetism among inbound 55+ and hybrid new-economy talent seeking affordability and lifestyle balance – are "ground zero" battlefields for near- and mid-term market share wins and losses.

A table of new home product lines, customer segment, entry-level vs. move-up buyers
Source: Century company filings

We wrote earlier:

The backdrop of both aspects is a Nashville market that's "on fire" as a magnet for jobs, for pandemic-era relocation to secondary and tertiary metros, and for economic vibrancy.

Here are a few bullet points that give context to the near- and longer-term outlook for the market:

  • The Wall Street Journal just highlighed a Moody's Analytics study that recognized Nashville as the 2nd hottest jobs market in the US, highlighting these characteristics as drivers: "They’re in midsize cities, all with a population under 2.3 million. They’re in states with fairly low income taxes, or none at all. And their climates allow for outdoor activities all year round."
  • According to analysis from Roofstock, Nashville MSA experienced job growth of 26% between 2010 and 2019, making the region the 2nd-fastest growing metro economy in the country.
  • Unemployment rate in Nashville is 2.8% as of October 2020, according to the BLS.
  • Target industries in Nashville include health care, music and entertainment, advanced manufacturing, corporate operations, and supply chain management.

Dale Francescon tells us:

We've morphed our M&A activities, and while there are a few markets in Florida that we'd like to be in and don't have enough of a presence, our primary goal now is to augment our already extensive organic land supply. The Landmark transaction just fits that perfectly."

ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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A select group of sellers – whose backs may be viewed as against the wall purely financially, given their reliance on personally guaranteed bank lending for AD&C – have tremendous leverage on both options and terms.


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