Stock Keeps Rising
By Jean Gruss
Ask Brian Stock what he thinks his company's revenues will be in five years and he whips out his calculator.
"We want to maintain a 25% growth rate," says the 35-year-old chief executive officer of Naples-based Stock Development, furiously tapping the number keys. "Obviously it gets tougher when you get to $2 billion or $3 billion."
That was no typo. That's "B" as in "billion."
For a company that started with $1.1 million in revenues in 2001, those projections seem unreal. But consider that Stock Development is on track to report $1 billion in revenues this year and the ambitious forecast appears within reach. In 2004, the company reported sales of $608 million.
Stock Development has generated this rapid growth by controlling virtually every step of the home buying process in communities it is developing, from sales to construction, mortgages, title insurance and interior design. It's in the process of setting up a brokerage firm to capture resales in those communities. Next on the drawing board: Stock plans to start a high-rise division and plunge into the condo development market.
"It's a one-stop shop," says Brian Stock, who formed the company with his father, K.C. Stock, 67. The elder Stock is chairman of the company and his son runs the day-to-day operations.
To attract new customers, Stock spends millions of dollars to build clubhouses and plant lush landscaping before selling the first homes. Typically, developers build amenities later or at the same time as the homes are being built. But Brian Stock says making those investments initially makes it easier to sell homes for higher prices.
The company's success hasn't gone unnoticed. Gov. Jeb Bush awarded Stock its annual business diversification award for entrepreneurship earlier this year and the Collier County Economic Development Council awarded the company a similar prize in September.
The Stocks also benefited from some good fortune. They bought into existing Naples developments just as the real estate boom was about to take off, in some cases taking over from developers facing financial hardships. The company closed on the first parcel in Naples four days before the Sept. 11 terrorist attacks in New York and Washington, D.C.
The company is currently developing Lely Resort Golf & Country Club and Olde Cypress, both in Naples, Grandezza in Estero, Paseo in Fort Myers and Vivante in Punta Gorda. It recently purchased 260 acres from Centex Homes at The Plantation near the intersection of Daniels Parkway and Treeline Avenue in Fort Myers, where it plans to build 2,000 homes.
Meanwhile, Stock is on an land-acquisition streak that includes plans to buy 7,500 acres outside Punta Gorda and 1,174 acres in Manatee County near State Road 62 and U.S. 301. Stock won't share too many details of those planned purchases, but he says those tracts will help fuel the growth of the company into the future.
Observers marvel at the company's ability to move into the area with so much success. "We have developers come from all over the country and most of them stub their toes," says Mike Carr, a commercial real estate broker with Coldwell Banker Commercial who has been a Collier County broker since 1978.
By contrast, Stock has successfully raised prices in the communities it's developing. "Everything they touch turns to gold," Carr says.
Get control of home buying process
K.C. Stock vacationed in the Naples area for years before he and son Brian launched Stock Development in 2001. And since the mid-1990s, K.C. Stock had been a silent partner in several residential developments in Collier County, including Pelican Landing, The Colony, Olde Cypress and Grandezza.
After K.C. Stock sold his successful construction-supply company in Green Bay, Wisc., he and his son started Stock Development by purchasing 340 acres in the southern half of Lely Resort Golf & Country Club in Naples. Brian Stock declines to go into specifics about the company's finances, but he says that the projects were financed using conventional bank loans.
But Brian Stock quickly realized that to be successful, the company had to control sales and marketing at Lely, which was owned at that time by the Holland-based Van der Lely Co. So Stock purchased the remaining 1,500 acres in Lely and gained control of sales and marketing. It spent $1 million on marketing the community in the first year and built a $10 million amenities center, complete with pools, tennis courts, a spa and a computer center. To boost sales, stock hired Michael Vranek, a longtime real estate broker in Naples who had a vast network of Realtors.
Those moves paid off. In its first year at Lely in 2001, Stock sold 80 homes, totaling $17 million. In 2005, the company expects to sell 1,100 homes in that development totaling $500 million in sales.
It doesn't look like it will slow down, either. A 623-home community called Ole within the Lely development has 7,100 buyers on its waiting list.
Stock's other businesses contribute to every part of the sale. Rather than sell the lots to builders, it established Stock Construction to build homes alongside other well-known builders, such as Centex Homes. Noble Title & Trust provides title insurance services, Stock Financial helps buyers obtain a mortgage, Serenity Pools & Spa builds backyard pools and Pizzazz Interiors helps homeowners with interior design.
Some of Stock's businesses, such as the pool company, were not in the original business plan but turned out to be good opportunities. Naples pool builder Gary Martin offered to start and run a pool company for Stock. It made sense: 90% of the homes Stock builds have pools. While customers have a choice of pool builders, many have chosen Stock's Serenity Pool & Spa. The company plans to sell 250 pools this year, up from 100 pools last year.
Selling to customers doesn't stop after they sign the closing documents. Stock Property Management manages the affairs of community associations, Stock Community Services provides concierge services to residents such as transportation to the airport and Stock Realty will help customers buy and sell their homes.
How Stock plans to manage growth
Brian Stock faces some tough challenges ahead as he seeks to grow the company so rapidly. Much of that growth, he says, will come from land acquisitions the company makes today. He points to a dozen stacks of folders that line his office wall; each one represents a land deal.
"Now we're going up the coast and bidding aggressively on land," the younger Stock says.
Although he plans to move fast, Stock says he is mindful that ever-escalating prices for land and homes won't go on forever. Although he's convinced demand will continue for now, he says the company will only buy at the right price and in the right location.
In addition to land in Charlotte and Manatee counties, Stock is also looking farther afield in counties such as DeSoto. The state line isn't a barrier either; Stock has two parcels of land under contract in North Georgia.
Look for the company to move fast. One advantage Brian Stock has is that he and his father make all the big decisions. There is no board of directors and there are no outside investors. "We can react quickly," says Brian Stock. A deal, he says, is just a handshake away.
Stock family saw success in lumber
and rescuing a troubled boat company
The Stocks are no strangers to the construction business, which helps explain some of the success they've experienced in Naples with Stock Development.
K.C. Stock took over his father's lumber yard in Oconto, Wisc., in 1972 and rapidly grew the company from a single facility to 12 locations in Wisconsin and Minnesota. Stock Lumber Co. supplied contractors with building materials and manufactured roof and floor trusses, wall panels and pre-hung doors.
K.C.'s four sons, including Brian who now runs Stock Development, all worked for their father at the lumber company. Brian says he learned the construction business by talking to Stock Lumber's customers, most of which were homebuilders. He also learned to manage people, overseeing the expansion of the business in several locations.
But by 1998, two of the brothers wanted out of the business and K.C. sold the company to Carolina Holdings of Raleigh, N.C., for an undisclosed price. Carolina Holdings adopted the Stock name, renaming the company Stock Building Supply.
"We had $180 million in sales when we sold out," says K.C. Stock, who also sits on the board of the Green Bay Packers.
But K.C. held onto a boat business he rescued from near bankruptcy in 1993 when the luxury tax nearly killed the industry. Cruisers Yachts is now a successful boat-building company with manufacturing facilities in Oconto and Wilmington, N.C., employing about 1,000 people.
The company manufactures about 600 Cruisers yachts per year, and prices range from $100,000 to $1.1 million. Of the $150 million in sales last year, about 15% came from Florida dealers.
Hiring good people is the key to Stock Development's phenomenal growth, says Brian Stock, the Naples-based developer's chief executive officer. Here are six ways Stock evaluates prospective candidates:
1. Don't interview based on someone's resume. Frequently, the resume won't tell you whether a person will do a good job for you.
2. Look for integrity. You want employees who will treat your customers and each other with honesty.
3. Seek out loyalty. You want to hire employees who will stick with you through the inevitable challenges that lie ahead.
4. Ask prospective employees what job they would like to do. Employees are more likely to work harder for you if you give them a job they really want.
5. Make sure employees have a positive attitude. One employee's bad attitude can spread to others, so it's critical that every employee is happy to come to work. "One bad apple spoils a bunch," Stock says.
6. Hire employees who are smarter than you are. Then, give them the freedom to manage and succeed.