Homebuilding Operations
We build homes through our wholly owned homebuilding subsidiary, Benchmark
Communities. Benchmark Communities operates under the principle that “Everything
Matters!” This principle underlies all phases of our new home process
including planning, construction, sales and customer service. We are diversified
by product offering, which we believe reduces our exposure to any particular
market or customer segment. Target home buyers vary by project and geographic
market, in part dictated by each particular asset, its location, topography
and competitive market positioning, and the amenities of the surrounding area
and the community in which it is located.
We believe our target home buyers look for distinctive new homes; accordingly,
we design homes in thoughtful and creative ways to create homes that we expect
buyers will find highly desirable. We seek to accomplish this by collecting
and analyzing information about our target home buyers and incorporating our
analysis into new home designs. We source information about target home buyers
from our experience selling new homes and through market research that enables
us to identify design preferences that we believe will appeal to our customers.
We target diverse buyer segments, including first-time buyers, first-time move-up
buyers, second-time move-up buyers and move-down buyers. Most of our communities
target multiple buyer segments, enabling us to seek increased sales pace and
reduce our dependence on any single buyer segment.
Land Development
As a homebuilder and land developer, we are positioned to either build new
homes on our lots or to sell our lots to third-party homebuilders. While our
business plan contemplates building new homes on the majority of our lots, we
proactively monitor market conditions and our operations allow us to opportunistically
sell a portion of our lots to third-party homebuilders if we believe that will
maximize our returns or lower our risk. We believe that our ability and willingness
to opportunistically build on or sell our lots to third-party homebuilders afford
us the following important advantages:
exploit periods of cyclical expansion by building on our lots;
manage our operating margins and reduce operating income volatility by opportunistically
selling lots as operating performance and market conditions dictate; and
manage operating risk in periods where we anticipate cyclical contraction by
reducing our land supply through lot sales.
We benefit from the long-standing relationships our executive management team
has with key land owners, brokers, lenders, and development and real estate
companies in our markets that have provided us with opportunities to evaluate
and privately negotiate acquisitions outside of a broader marketing process.
In addition, we believe that our financial position, positive reputation in
our markets among potential land sellers and brokers as a homebuilder and land
developer, as well as track record of acquiring lots since 2008 provide land
sellers and brokers confidence that we will consummate transactions in a highly
professional, efficient and transparent manner, which in turn strengthens these
relationships for future opportunities. We believe our relationships with land
owners and brokers will continue to provide opportunities to source land acquisitions
privately, helping us to maintain a significant pipeline of opportunities on
favorable terms and prices.