Warren Buffett's Berkshire Hathaway Inc. expanded its bet on residential real estate as his company's Clayton unit acquired Goodall Homes.
Goodall erects single-family homes, townhouses and condominiums at locations in Tennessee, Clayton said Friday in a statement that didn't disclose terms of the deal. That contrasts with Clayton's traditional approach of manufacturing houses in a factory, and shipping them to lots.
Clayton is diversifying through acquisitions in the so-called site-built industry as the housing market rebounds. The company purchased Chafin Communities in 2015 to expand in the Atlanta area. Last year was the strongest for housing starts in the U.S. since 2007, and construction began on 1.09 million homes at an annual rate last month, up from 954,000 in March 2015.
"As we continue to grow and expand into the site-built market, it is important to partner with teams that share our culture of providing an excellent customer experience," Keith Holdbrooks, president of Maryville, Tenn.-based Clayton said in the statement.
The acquisition of Goodall includes 3,600 lots and 180 homes under construction in a five-county area. Bob Goodall Jr. and his management team will keep their positions, according to the statement.
Buffett, who is hosting Berkshire's annual meeting Saturday in Omaha, Neb., has long highlighted Clayton and its growth. He said in his most recent letter to investors that the subsidiary "delivered an industry-leading performance." Clayton sold 34,397 residences last year, about 45% of the market in the U.S. for so-called manufactured housing, according to the letter.
