Westrum Development Company
John A. Westrum founded Westrum Development Company (WDC) out of a dorm room at Bucknell University in Lewisburg, Pa. “It started as a senior project in 1986,” explains Westrum. “We started our first residential project in 1987. By 1998, we had gone from zero to $100 million in sales.”
Nearly 30 years in the real estate development business, WDC has been involved in over 100 new residential communities, creating over 10,000 residential lots and constructing nearly 3,000 homes.
WDC began as a small, single-family homebuilder. Throughout the 1990s Westrum grew his team, adding key people in positions in operations and finance; many of those team members are still with WDC today. During those years, WDC expanded rapidly and entered different markets, both in product type and geography.
Then, anticipating a national recession, Westrum sold the residential assets to Pulte Homes (Pulte) in 2001, in what was one of Pulte’s largest deals at that time. The move allowed the Westrum team to focus on an emerging niche. “We repositioned ourselves to get into urban revitalization,” elaborates Westrum.
With a corporate office in Fort Washington, Pa., WDC develops large-scale communities in Pennsylvania and New Jersey. According to Westrum, 22 professionals keep WDC’s wheels turning, pumping out unique residential projects in the Mid-Atlantic region.
Westrum considers his business a niche player in the industry. “We determine where a segment of the market will be, and establish our product to fit the need,” he continues. “Over the last decade we have focused on large-scale urban transformation of fringe areas. We’re not necessarily a green builder, but we reuse existing infrastructure, like curbs, sidewalks and foundations, to create great urban environments.”
Unique Development Services
During the recent housing market plunge, WDC met the challenge head on. Westrum shifted many of the company’s “for sale” products into new rental communities. “We had to adapt to the marketplace,” explains Westrum. Through well-established connections with strategic partners and suppliers, WDC is able to embark on challenging projects that result in new communities for individuals and families alike from varying backgrounds.
“We play the role of developer and general contractor,” Westrum explains. “We subcontract all of the trades out, from excavation to finishes.” The WDC team works with quality contractors and suppliers to ensure timely completion and high levels of customer satisfaction. “Our relationships are very important to our success in this industry,” Westrum notes.
Business as Usual
Even during the housing depression, the WDC team remained busy with a series of initiatives that are helping the business grow in several directions as economic conditions recover. “We are creating a huge redevelopment project of the former brewery area in Philadelphia,” Westrum explains. “We completed the first phase of 144 units, but had to stop because of the market.”
Working in cooperation with the community and the city of Philadelphia, WDC brought in regional supermarket chain, Bottom Dollar Foods, to bring a much-needed retail use to the area. This move re-energized the area, according to Westrum, and is the catalyst for WDC to start construction on a 64-unit multifamily rental community, which will be the first phase of nearly 500 new multifamily rental units in the upcoming urban area.
The team’s ongoing projects include the Arbours at Eagle Pointe, a 400-unit active adult community in northeast Philadelphia, which was redeveloped on an abandoned State Hospital property. The company is also completing a 160-unit community in West Chester, Pa., and a 128-unit community in the East Falls section of Philadelphia.
Westrum is proud to report that WDC has several new projects starting in the next 12 months, totaling over 500 new units coming to market. The projects will be a mix of “for sale” and multifamily communities, each servicing a unique niche market.
Like it affected many developers, the recent recession and housing bust took a toll on WDC’s business. During that time, Westrum shifted company control to his finance department’s expertise, allowing WDC to streamline and survive with minimal resources. While business had slowed significantly, he reports that the market is coming back slowly with the recovery.
“In 2006 we were doing $75 million in revenue, and then the world ended,” Westrum explains. “Through our team’s hard work we have survived, but while we used to build 300 houses per year; in 2012 we did 70. We’ve been fortunate to build and maintain strong relationships with our lenders, and reposition our existing assets to create cash flow. We are strategically shifting many of our non-developed properties into multifamily uses, where we see significant growth potential.”
Westrum has big plans for the business as the market recovers. “We will be completing the Westrum Development Transformation Initiative, which we started in 2012,” he explains. “We’re transitioning from a survival mode to a full-blown company with sales and marketing initiatives to meet market demands. We’ll continue to work with our lenders and investors to shift our nonperforming assets into performing communities that meet the changing demographic trends for modern, urban-style developments.” With a slew of upcoming projects and continuing WDC’s initiative, the team is on track to return to growth.
While WDC’s recovery presents challenges, Westrum and his team continue to maintain a balance of professionalism and performance that ensures continued success at any level. The business follows a simple, direct mission statement: working with government agencies and community groups to seek unique opportunities, creating exceptional urban and suburban communities that address diverse needs and complement the surrounding region.
As the market bounces back, Westrum Development Company continues to operate an efficient, quality business, leaving a wave of unique portfolio pieces across Pennsylvania and New Jersey.
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