Pat Neal is well known in the region for his prolific homebuilding company, one that's comeback from five recessions over four decades and now generates more than $120 million in annual sales.
But Neal might soon become known for another accomplishment: His son, John Neal, is a budding homebuilding star. The younger Neal's company, Lakewood Ranch-based John Neal Homes, sold 42 custom-made homes in 2012 for roughly $30 million in total revenues, with an average sales price of $725,000. That's almost double the $18 million in sales volume from 2011.
John Neal, 38, focuses on the luxury market, with prices starting at $650,000. He won't sell houses under that price to avoid competing against Neal Communities, the company Pat Neal has run since 1970. Besides, the upscale market is where the action is.
“I think we are trend-setting,” Neal says. “There is a market for the high-end buyer. We are in a rising market.”
Indeed, homebuilders up and down the Gulf Coast are diving back into luxury. Firms like Longboat Key-based Modus Custom Residences and Naples-based London Bay Homes, for example, report renewed interest from customers in homes priced at more than $700,000.
Neal, meanwhile, projects John Neal Homes will increase its output by 25% in 2013 and likely surpass 50 total sales. The company builds homes in several east Manatee County communities and will do custom-build projects in Sarasota and Bradenton. The firm also recently entered into a partnership to build homes in the Bahamas.
A totally separate company from Neal Communities, John Neal Homes recently doubled the size of its Lakewood Ranch Main Street office space. Neal plans to hire six employees this year, which would bring the total payroll to 20.
Another key facet of the recent success at John Neal Homes: It holds no debt.
To Neal, who has worked for and studied under Pat Neal, unofficially and officially since he was a teenager, that's a big deal. “There are really four rules of real estate,” Neal says. “Location, location, location, and make sure your builder is financially stable.”
Neal has remained stable through some shrewd and sharp land acquisition decisions — much like Pat Neal has done numerous times. For instance, John Neal bought 23 lots in Country Club East in Lakewood Ranch in December 2011 for $2.12 million. Few lots remain in the community, which pumps up the value of Neal's purchase.
Neal studied economics at Hampden-Sydney College in Virginia. But he left in 1997 after his junior year to join the work force. He jokes that since he'd never be a college professor, he wanted to enter the real world. He worked in the IT department of a mortgage firm in Virginia before he moved back to Manatee County, where he took a job with Neal Communities.
John Neal looks forward to the chance to build his own name in homebuilding, though he cherishes the ability to work with and learn from Pat Neal. The father and son talk nearly every day, and they constantly talk business.
John Neal, moreover, strives to follow the Neal Communities principles, ethics and goal-driven model. Says Neal: “There are worse companies to be compared to than Neal Communities.”
Several Gulf Coast homebuilders are finding success, once again, in the high-end market.
“After four or five years of tough times I think we are going into a good time for builders,” says Mark Wilson, president of Naples-based London Bay Homes, which builds luxury homes in several Gulf Coast communities. “I think we are in for a nice run in 2013, 2014 and 2015.”
Wilson says the market for homes priced at $3 million and up is even showing signs of a resurgence, at least in Naples. Wilson believes the uptick is driven by the combination of low inventory in certain price ranges and low interest rates. Other homebuilders cite the same reasons for the rebound.
London Bay, moreover, is one of several homebuilders, big and small, that will move quickly in 2013 to meet the increased demand. Lakewood Ranch-based John Neal Homes, for instance, has doubled its office space and plans to add six employees.
Other firms, more custom-based, are adding projects. For example, Longboat Key-based Modus Custom Residences is currently building two luxury homes. One is a $4.49 million house on Casey Key Road, a prominent waterfront location in south Sarasota. The 4,400-square-foot home includes plans for a three-story panoramic view of the Gulf of Mexico. Modus also plans to build another home with panoramic Gulf views on Siesta Key, a $7.5 million project.v