An astonishing phenomenon has gnawed at us for years. This morning it dawned on us, fully formed.

In a sweeping, swooping, turbulent business environment, vibrating around inflationary forces, interest rate increase impacts, powerful demand triggers, and ongoing supply-related information vacuums – a context that would seemingly stack heavy odds in favor of large enterprises over nimble, counterpunching local subdivision builders – the phenomenon crystallized.

It's this. The natural history of this rather rare species of human business individual – whose livelihood strives toward making new homes and neighborhoods for people – tends to contrast sharply with many other career paths.

Builders, in nature, character, and evolution, often behave atypically.

And we don't often enough recognize that as a good thing.

Entrepreneurs, whether they work within the framework of residential construction's multi-regional Fortune 100 enterprises or as founder-principals of their own homebuilding operations, are at the heart of homebuilding, in its suburbs, its urban cores, and its rural backwaters.

Too, they often evolve in serialized incarnations.

They start-up [or succeed their fathers and/or both parents], build-up, and turn over the assets when housing economic cycles reward the timing and valuation of a transaction.

And then, as the natural history of a builder plays out – around the same time non-compete clauses run their course – the juices, the fire in the belly of a homebuilder, the resolve to get back in the game ... start to spool up into an almost involuntary muscle memory of that original calling.

Like many a successful, cycle-proven homebuilding entrepreneur before him Dave Erickson decided that, while the time was right in 2019 to sell the business he'd built – Grayhawk Homes, out of Columbus, GA to American Southern Homes – up from scratch, fresh out of the U.S. Army, the time is right now to start the wheels turning for a new normal next chapter.

The News:

Dave Erickson, founding president and ceo of Grand Oak Builders, announced that Atlanta-based Grand Oak Builders acquired Overland Park, Kan.-based Lambie Custom Homes, Inc., a 44 year home builder. The new company will operate as Lambie Grand, LLC dba Lambie Homes and managed by Jim Lambie, the 44 year veteran of quality home building in the Kansas City region.

Part and parcel of the deal – which provides Lambie with an infusion of capital and a rampway for Jim Lambie and his team members to stay hands-on in the operation – is a formula to evolve the operation from its current focus on custom home building, to more of a hybrid model with emphasis on higher-volume production capability, according to Erickson.

Per the statement:

The acquisition of Lambie Custom Homes comes with a five-year lot supply and exposure to residential development, home construction and some commercial development activity.  Right out of gate, Lambie Homes is launching a 176-unit duplex community which breaks ground in January, 2022.  Additional projects are pending and will be announced in the coming months.

Of note, according to Erickson, the Lambie acquisition reflects a vision he's roadmapped to add to Grand Oak Builders in regional scope and operating footprint through further acquisitions he's currently pursuing.

Erickson notes that the Lambie success formula – while principally focused on building 20 to 30 custom homes and making loyal clients of home buyers in the Kansas City market arena – includes skillsets in commercial construction projects as well. He's agnostic as regards the promise and potential of for-sale or for-rent projects and simply wants to bring a value-add dimension to an operator looking to take some risk off the table right now.

In a sense, Erickson – who counts among key advisors Al Trellis of Home Builders Network and attorney James Sack, who's got deep experience in homebuilder firm mergers and acquisitions – has created a platform in some ways similar to the one he sold Grayhawk Homes to two years ago.

I'm basically a homebuilding and construction sector entrepreneur," says Erickson. "I know how to build, and I'd like to put together an operating portfolio, starting in one of the hottest housing market regions in the nation right now, stretching from Virginia down and through Texas, to ally with builders who want to continue doing what they do best while we add value both in capital and deep mentorship capability."

As criteria for what he looks at as essential to potential new pieces of the Grand Oak Builders puzzle, here's how he spells out the traits of future alliances.

• Do I like the market?
• Do I like the people running the operation and their team?
• Can the Grand Oak team step in an add value, improve outcomes, etc?
• Does it fit the funding and investment appetite?

Why The Deal Matters

While the M&A headlines focus on the bigger deals, homebuilding's community of builders who complete 10 or more houses per year – accounting for 90% of new home activity in the U.S. – is an ecosystem of entrepreneurs 5,000 deep across the nation. Succession planning, risk and personal financial planning, distribution channel scale and competitive forces, and access to growth capital figure into the plans, needs, urgencies, and opportunities of many many operators dealing with the pandemic era business volatility right now.

What the Grand Oak Lambie combination says is that there are options open to builders of all sizes, partly because of that phenomenon that makes homebuilders a category by themselves in the human species. They're resilient, and find ways to thrive when the intestinal fortitude of most normal individuals in their careers would be ready to call it a day.

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