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Business Observer Sunday, Sep. 1, 2019 9 months ago

Homebuilder nears big sales milestone

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Behind a details matter philosophy and smart land deals, Neal Communities remains at the top of the homebuilding industry. One executive, normally out of the spotlight, has a big role in the success. 
by: Mark Gordon Managing Editor

The five years between 2011 and 2015 at Neal Communities were a rocket ship of revenue growth: In total, revenues at the Lakewood Ranch homebuilder increased 233%, from $110.94 million to $369.7 million.

Although growth slowed a bit in the later half of the decade, the company remains the largest locally owned homebuilder in the region. A chunk of the credit, of course, goes to Pat Neal, the co-founder and chairman of the firm's executive committee​,who has guided the business through recessions, downturns and strategy shifts for some 50 years. Neal is also known for making particularly shrewd land deals.

But one of the company’s unsung heroes of the last decade is Michael Storey, president of the firm since 2010. Like Neal, Storey is a stickler for details — a key career lesson. “Pat and I like to say, ‘Are all the lug nuts tight?”

Consider one project in east Manatee County’s Lakewood Ranch, Indigo. Because it was planned on what Storey calls a “hodgepodge of land assembled together,” it required an unusual amount of due diligence. “We had 30 different consultants and 30 different plans and kept going until we got it right,” he says.

Another example of details matter: At Grand Palm in Venice, Neal Communities planners, under Storey, spent an extra $600,000 to have a curved road at the entrance, not just a straight line. “It’s a much more beautiful entry,” Storey says.

Storey has also been at the forefront of some key decisions at Neal Communities, choices that have helped boost margins and shift the direction of the firm. A big one: going to — and then, after four years or so — leaving the Hillsborough County market. “It was difficult to find margins that made sense there,” Storey says, citing heightened competition.

The company will instead continue to focus on markets and communities from north Manatee County south, through Naples. Storey says there are even some “exciting things” happening in Charlotte County, normally a pass-through market between Sarasota and Fort Myers.

Mark Wemple. Michael Storey has helped lead Neal Communities on big growth run over the past decade.

On target customers, Storey says Neal Communities will likely always be primarily an older person, active lifestyle business. “But we are starting to think more about how to sell to younger buyers,” Storey says, noting Canoe Creek in Parrish, north Manatee County, where some houses are in the $250,000-$350,000 range. Buyers in that project have been 60% families, doubling expectations. “[Younger buyers] are a market that we’ve overlooked a bit in the past.”

Homebuilding is a natural extension for Storey, whose dad and uncle were ‘fix-it’ men who worked with their hands. As a young boy, Storey loved to build forts, tear them down and build them again. He graduated from the building construction program at the University of Florida and worked in Orlando and Tampa, including 11 years as a division president for Morrison Homes. Neal recruited Storey in 2010.

The pair knew each other a little and hit if off on philosophies, leadership and industry issues. The exacting Neal, who brings a 30-year-old’s passion to the job even today, has rubbed off on Storey. “Most other homebuilders want to get in a position to sell or go for an IPO,” he says. “But that’s not us. We obviously have a financial motive, but for Pat it’s about achievement.”

'My No. 1 priority every day is selling homes. The only thing that keeps me up at night is, ‘Are we going to sell a home tomorrow?’ Michael Storey, Neal Communities 

Neal’s details-matter, customer-first mantra has rubbed off on Storey in other ways too. Like the belief that nothing happens without a sale. That’s how the company is on the cusp of a major milestone: $500 million in annual revenue.

“My No. 1 priority every day is selling homes,” Storey says. “The only thing that keeps me up at night is, ‘Are we going to sell a home tomorrow?’

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