Grant Thornton Sees More Homebuilder Distress

The $700 billion U.S. homebuilding industry faces more economic distress over the next six months, especially small to medium-size builders, according to Grant Thornton Corporate Advisory and Restructuring Services. National builders will continue to acquire local and regional builders, and the latter will consolidate to become more attractive acquisition targets, the company predicted. "Homebuilders are unique from a restructuring standpoint," said John Bittner, a partner at Grant Thornton's CARS practice. "It's not like a manufacturing company that can quickly cut costs to improve operations and increase profitability. When a builder finds itself in distress, there are fewer options to improve cash flow short of having a fire sale on existing inventory." Grant Thornton can be found online at http://www.grantthornton.com.