Case Studies

McGuyer Homebuilders Inc.

Putting a roof over Texas' major markets for 25 years

For many homebuilders across the U.S., the recession and the drop in buyer demand was simply too much to overcome. “Approximately 55 percent of homebuilders in the U.S. didn’t make it out of the downturn, but we’re still here,” says Gary Tesch, president of McGuyer Homebuilders Inc. (MHI). “In 2006, we built 3,300 homes and at that point MHI was the 27th largest builder in the country. In 2013, we did 1,400 homes and we’re now the 26th largest builder. We’re building less, yet we remain as one of the nation’s top ranked builders. ”

Tesch is projecting 1,500 homes for 2014 as the Texas-based builder celebrates 25 years in business. “The downturn was a difficult time in our history,” he recounts. “We went from 600-plus employees down to 300.”McGuyer Homebuilders Inc.

However, now that number is up to 350 and since the end of 2012, Tesch says MHI has welcomed greater demand and more sales. “In 2012, we started seeing more buyer confidence and the same all though 2013 and continuing into this year,” he shares. “We’ve even seen strong sales through the summer when typically, things slow down. It is normal for sales to slow in the summer, because contracts go out in the spring as people want to be in their new home and settled before the school year, but we’re still seeing great traffic and sales.”

A Texas name to take note

Over the course of 25 years, MHI has put a roof over close to 50,000 Texan families. “We take great pride in that,” says Tesch. “We’re a Texas builder, operating in the major markets: Houston, Dallas-Fort Worth, Austin and San Antonio.”

MHI has been building a reputation for quality service, award-winning construction and design since its inception in 1988 when Frank McGuyer, chairman and CEO of MHI, founded the company. “Frank was with General Homes prior to starting MHI,” recounts Tesch. “He’s still very active in the business today; it’s his passion and he’s still the driving force behind the company.”

Tesch joined the MHI roster in 2000 as CFO. “My background was in public accounting and commercial real estate,” he shares. “When the downturn hit MHI needed strong financing alternatives and structures. We were fortunate to have the confidence of our financial institutions and other capital providers during the downturn.”

In 2010, which was midway through the recession, Tesch was promoted to his current position. Since, Tesch and the rest of the expert team at MHI have guided the company out of the recession and there is strong promise in all markets across the Lone Star State. “We have four corporate offices – Houston, Dallas-Fort Worth, Austin and San Antonio – doing business all over Texas,” notes Tesch.

“Being from Texas, we have a good pulse on what each market calls for,” adds Tesch. “We follow top developers and top master plans in each city and were very strategic in our selection process of where we build. We go for highly desirable locations where the demand is strong so we can build a quality product in a quality community.”

Built to suit buyers

Since the beginning, the company has been catering to all sorts of buyers’ needs. “From first-time homeowner to second or third-time move up and also semi-custom, which is our biggest strength, we’re building to suit buyers specific needs,” explains Tesch. “What we build fits their lifestyle. If someone wants their kitchen redesigned or different windows, we will work with buyer to meet their expectations and design the house accordingly. For us, it’s a matter of managing expectations but at the end of the day, it’s highly rewarding to deliver a customized product. Our company’s tagline really sums us up very well: Built Around You.”

Under the MHI umbrella exists Coventry Homes, Plantation Homes and Wilshire Homes, serving buyers at all price points. “In Houston, Plantation Homes caters to first and second time homebuyers with more value per-square-foot,” details Tesch. “Coventry Homes is a much more customized product, with more bells and whistles so to speak, which costs a little more per-square-foot.”

Tesch explains that in Houston, which is the company’s top market, Towne Lake and Aliana are two of its top master plan communities. “Towne Lake and Aliana are in considerable growth corridors and the developers have done a fine job laying out the area,” he explains. “These communities satisfy all buyers, from second or third time to high-end semi-custom.”

In the Dallas-Fort Worth area, MHI is really ramping up its sales and construction efforts in Harvest, which is a new master planned development. “Harvest hits all price points, as well,” adds Tesch.

However, one of the most thriving markets is Austin, the fourth most populous city in the state.

Drawn to Austin

Through the peak of the recession, Tesch says MHI was fortunate to acquire Wilshire Homes (Wilshire), a well-established Austin-based builder. “We were looking to expand our footprint in central Texas and the opportunity to buy Wilshire presented itself,” he recounts. “The company was born and bred in Austin by Ed Horne.  So not only did we acquire a new company, but also great connections. Horne remained with the company and oversees all land and lot activities in Central Texas. Overnight MHI became a stronger local player with a known presence and now we’re up by almost three times the number of homes we were doing in Austin.”

One of the company’s most popular-selling neighborhoods in the competitive Austin market is Sweetwater. “People are attracted to Austin for many reasons, including the strong tech industry, as well as its arguably one of the prettiest cities in the state with sweeping views of the river, lakes and hill country,” explains Tesch. “While it’s one of the most attractive markets, it’s also one of the most challenging cities to build in. Entitlements take longer to acquire and permits are difficult to get approved, which drives the price of homes up.”

Tesch notes that land and lot prices in Austin and other parts of Texas have already climbed higher than peak prices pre-downturn. “That means we’re dealing with huge capital investments in order to acquire land,” he explains.

While prices continue to climb in Austin, so does buyer confidence says Tesch. “Fortunately, Texas was one of the last states to go into the recession and one of the first to come out of it,” he adds. “There have certainly been challenges, but now there is renewed confidence and people are looking to make moves.”

Life changing decisions

MHI understands that move into a first, second or even third home is one of the most important decisions in anyone’s life and the company is committed to help make it the best possible outcome. “We don’t make widgets; we build homes,” compares Tesch. “MHI helps the average American achieve their dream of homeownership.”

Tesch says MHI’s goal is to make that possible for 1,500 Texans this year as the company maintains its position as one of the largest privately-held homebuilders in the country. “When I think about 1,500 Texans celebrating the holidays in their new home, now that’s something special,” he shares. “And it takes everyone in this organization, from the architects to the accountants, information technology to sales and construction to make the big machine run. Without one of those pieces it doesn’t work.”

At the end of the day Tesch says it’s about taking a step back and looking at the bigger picture. It’s not all about sales, volume or profit margins; it’s about putting a roof over head for thousands of families for 25 years at McGuyer Homebuilders Inc.

Published on: January 8, 2015


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