Century Communities buys out first time home buyer JV partner
Century Communities has acquired the 50% of regional builder Wade Jurney Homes it didn't already own to boost its mortgage and title operations and reach more first-time homebuyers.
"This transaction establishes Century as a top-10 U.S. homebuilder and represents another milestone for our company," Dale Francescon, one of the two brothers who serve as co-chief executive officers of Century, said in a press release.
"Our partnership with Wade Jurney Homes has been extremely positive and allowed us to benefit from increasing demand for entry-level homes through a high-returning asset-light model and enhanced geographic exposure to one of the fastest growing regions of the country."
The purchase price Century paid for the remaining stake in WJH was undisclosed.
Jurney, president of the regional builder that bears his name, will continue in that role. WJH will retain its existing branding and business model as a wholly owned subsidiary of publicly traded Century. WJH specializes in single-family homes for entry-level buyers with sales prices averaging $150,000, and sells those homes online or through retail outlets. Entry-level homes are in short supply in the current market.
Century has had a joint venture with WJH since 2016 and its return on investment "has surpassed our expectation in each quarter since inception," Dale Francescon said. Century also started its mortgage and title subsidiary that year, when it acquired Inspire Home Loans at an undisclosed price. Century paid $18 million to acquire its initial 50% stake in WJH.
"The coming together of the fastest-growing public and private U.S. builders was a logical next step for our partnership," Rob Francescon, co-CEO of Century, said in the press release. "We are very pleased that Wade will continue in his current role as president of Wade Jurney Homes."
"With the strength of our capital resources, national scale and operating infrastructure coupled with Wade's operational expertise, we are now even better situated to expand the success of Wade Jurney Homes' unique operating model into additional markets," he said. "This geographic expansion will take place in areas that include the Midwest, Arizona and Texas, where Century has already begun acquiring lots."
Century Communities has been an active acquirer since it went public in 2014. Other companies it bought recently include Sundquist Homes (for $50 million in the fourth quarter of 2017) and builder UCP (for $359 million in the third quarter of 2017).