Case Studies

Schneider Homes Inc.

Building Comfortable, Energy-efficient Homes on the West Coast

In 1974 brothers Gerald and Harry Schneider founded Schneider Homes Inc. (SHI). The successful family-owned homebuilder continues to serve Washington State’s Greater Puget Sound area today. From the very beginning, SHI’s team has focused on building value in homes, utilizing high-quality design, materials, craftsmanship and customer service. The end-product is a quiet, comfortable home, suited for individuals and families along a broad price range.

The company employs 75 people who work from SHI’s corporate office in Tukwila, Wash., serving communities across the state of Washington, as well as in Arizona, Oregon and Cabo San Lucas, Mexico. SHI focuses exclusively on residential work, constructing apartment buildings, condominiums, townhouses and single-family homes.

Gerald, founder, owner and CEO of SHI, has been in the industry for decades. “When I began in construction, I was working as a roofer,” he explains. “So I guess you could say I started at the top. I’ve always been interested in creating things. At the end of the day, it’s really nice to see the work you are doing.” Gerald’s experience, deep knowledge of the industry and sense of humor offer him unique perspective as a business owner, especially in an industry that has been through a tough recession.

Staying Ahead of the Market

The company’s broad range of homes, condominiums, townhomes and apartments allow SHI to cater to several demographics. “Our market is essentially the move-up buyer,” Jerry elaborates. “In our condos and townhomes, we target a lot of single people and first-time homebuyers. In fact, an individual or family could easily transition between SHI properties.” With the burst of the housing bubble around 2008, however, the market for single-family homes, townhomes and condominiums diminished significantly.

“The best decision we made for the future that kept us going through the recession was to keep the apartments we built in our own portfolio,” Gerald adds. “The American choice is a single-family, detached home. Unfortunately the affordability factor keeps many people out of that market and we offer quality apartment communities as another option. Here around Seattle, there is a limited land supply, which drives the costs of single-family homes up higher.”

SHI has been running lean, tightly managing costs in order to stay stable and manage steady growth. Luckily, the company’s reputation for quality homes and customer service stands on its own: a factor that has attracted buyers, even when the market was down.

“We try to build a quality product that sets us apart,” Gerald explains. “The price tag may be a little higher than the competition, but we also provide a higher quality product with more standard features that provides our customers with more value for the price.”

Designing for the Future

SHI focuses on building communities to provide a place to call home no matter what stage of life or tax bracket. “We build shelter,” Gerald explains. “Our staff designs and constructs tract home developments, townhomes and condominiums, as well as multifamily housing.” Working with a strong set of strategic partners, including suppliers, subcontractors, architects and financial institutions, SHI has built a supportive network to get the job done.

For tract homes, the team designs all floor plans in-house, performing framing on-site and leaving the rest of the construction to a team of trusted longtime subcontractors. “We have a broad range of floor plans that are constantly being improved,” says Gerald. “We are proud to have been the first Energy Star-certified homebuilder in the state of Washington. All of our new homes built in western Washington are Energy Star-certified and utilize highly efficient appliances, lighting and mechanical systems, including high-efficiency gas furnaces with sealed ductwork and tank-less gas water heaters, as well as highly energy efficient insulation and windows that exceed code, making our homes quieter, more comfortable and provide our homeowners with a significant savings in their home energy costs.”

Gerald goes on to note that, for the most part, SHI’s homes are designed in a traditional style. “We offer a wide variety of home plans in all sizes and we select the home size and shape to fit our lots accordingly,” he continues. “We strongly believe that our homebuyers should have choices. Presale buyers and purchasers of homes in construction meet with the company’s interior design staff in their design center and may have the opportunity to choose interior décor and select from a variety of options and upgrades to customize the look and feel of their new home to their own preferences and lifestyle.”

Additionally, SHI has its’ own in-house real estate company, Schneider Family Homes. With an on-staff real estate broker and licensed brokers trained as New Home Specialists, Schneider Family Homes ensures purchasing a new SHI home is an enjoyable and satisfying experience for customers while maintaining optimum efficiency for the company. New single-family, townhome and condominium sales offices and furnished model homes are staffed five days a week during the marketing and sell-out phases with a dedicated staff of sales professionals.

With apartments, townhouses and condominiums, SHI relies on outside design work. These developments are suited for single people, couples and families just starting out. “We work exclusively with outside architects for our multifamily developments,” Jerry notes. “We do much of our own framing and some excavation and landscaping work. Our long-term relationships with our partners are important. We have to be able to trust our subcontractors.”

Esteemed relationships become even more important once the apartments are constructed, as SHI takes on a management role. SHI’s apartment management team seeks to provide renters with a positive experience, as well as a safe, comfortable and attractive environment to call home. High-quality construction and proactive management contribute to successful relationships with tenants.

“If renters have a good experience with our apartments, they are more likely to turn to SHI when it is time to purchase a condominium, townhome or single-family home,” Gerald continues. “As a special incentive to our tenants, we offer tenants up to $4,800 in our Return on Rent program as a credit at closing toward upgrades or closing costs should they purchase a new home.”

A Growing Portfolio

SHI has been working through a number of projects throughout 2013, constructing neighborhoods and multifamily structures across the region. “We recently completed The Nelson, a mid-rise, multifamily building in North Seattle with 61 luxury apartment units, as well as retail and office space,” Gerald recounts. “There are always challenges with every project, but we completed the project on time and it’s 100 percent occupied.”

Another challenging project for SHI has yet to be built. “We’ve been working on our Copper Ridge project for 22 years,” Gerald explains. “These are townhouses in an area that was annexed into the city of Kent and it took us two decades to retain zoning. We are finally underway, with project approval as of Dec. 10, 2013. The Copper Ridge project will include 34 attached townhomes. These valley view homes are more into the luxury class, from 2,100 to 2,650 square feet and pricing from mid-$300,000’s to the low $400,000’s.”

Gerald and his team are looking forward to breaking ground on another new multifamily project. “We have a 245-unit mixed-use mid-rise in the city of SeaTac that they plan to start in spring 2014,” he says. “This new project offers Mount Rainier views and is ideally located with easy access to major freeways, public transportation and SeaTac Airport.”

As far as single-family residences go, the company has been working on a number of communities. SHI’s Woodbrook North community on the west hill of Auburn is 50 percent sold, and sales have also been brisk at the company’s Sunridge at Elk Run community in Maple Valley.

“We will be starting another new project in Maple Valley in 2014,” Gerald continues. “Our newest community of Hawkesbury, located in Kent, opened in 2013 will have 81 single-family homes priced from the mid-$300,000 to the low $400,000’s. We will also be starting construction of homes in Wyncrest community in early 2014, located on the west hill of Auburn, which will have more than 60 homes in a similar price range.”

Looking Ahead

Only a few years after the housing market crashed, SHI has been able to maintain margins, keeping up steady returns and surviving the economic downturn. Gerald credits a devoted team and loyal customers for much of the company’s continued success. His staff is dedicated to maintaining a high level of quality and craftsmanship in design and construction, as well as providing excellent customer service. In recent years, the team has offered several incentives to repeat customers, as well.

SHI offers a $5,000 credit at closing to brand-loyal repeat homebuyers. When a customer makes the big move from one SHI home to another, preferred buyers can apply this credit to upgrades and closing costs, making the purchase more affordable.

The company also offers incentives to homeowners who refer friends and family to the SHI line of homes. Upon closing, current brand homeowners are entitled to a $1,000 bonus when a friend referred buys a SHI home. According to Gerald, new homebuyers who purchase homes are also eligible for a $3,500 to $4,500 credit at closing for upgrades or closing costs for using one of the company’s preferred lenders to finance the purchase.

Gerald and his dedicated team have a strong understanding of the importance of building relationships. By offering incentives and connecting with homebuyers and strategic partners, SHI ensures a strong future in the industry. In the coming years, Gerald is looking ahead to continued stability. The housing market is still in recovery mode; however, as the market continues to rebound, Schneider Homes Inc. is poised to take advantage of incoming opportunities for growth and has a number of future projects in the pipeline.

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