- March 28, 2024
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Who's building new homes in Florida?
Most people never would have expected WCI Communities to be among the companies pouring new foundations today.
But the creditors who were expected to carve up and sell off Bonita Springs-based WCI Communities in pieces after it emerged from bankruptcy reorganization in September 2009 have decided the company is better off building homes again.
So far, the company has reopened home-sales centers in five communities, including four in Venice, Fort Myers and Naples. WCI plans to open another five communities on the Gulf Coast in 2011, including West Shore in Tampa.
“We're coming to market with homes that are at or below where the resale market is,” says David Fry, the president and CEO of WCI.
WCI has sold off land to pay down its most onerous debt, including $300 million that drained the company's cash flows.
“The discussion has shifted now to ramping up our homebuilding operations and considering a capital-markets transaction,” Fry says.
WCI's directors have discussed raising money in the public markets with a debt offering, but if it happens it will probably take place in the second half of 2011.
“The reason for that is that we are in the process of opening up our communities again,” Fry says. “We need to show a track record of selling homes.”
So far, the winter selling season appears to be picking up, though it's difficult to compare against 2009 because WCI was not selling new homes that year. “Last season all we were doing was selling standing inventory,” Fry says.
But WCI sold six new homes in October in Pelican Preserve in Fort Myers, exceeding projections. And traffic at its sales centers has doubled in October and November from August and September. “People who are coming in to shop today are more serious than in the past,” Fry says.
Still, Fry says challenges remain. “People are very slow to make decisions today,” he says. “At the end of the day, it ends up being all about price.”
WCI is fully aware of the oversupply of existing homes for sale in all areas of the Gulf Coast and the need to price its new homes at those levels. “That's how we're gauging whether we can compete or not,” Fry says.
“2011 is a transition year for us,” Fry says. “As we move into 2012, we fully expect to be a full-blown operating homebuilding company.”