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BUILDER 100 Spotlight: McGuyer Homebuilders Still Racking Up Big Numbers

December 11, 2018

BUILDER 100 Spotlight: McGuyer Homebuilders Still Racking Up Big Numbers
One of the BUILDER 100's top firms adds to its success by staying nimble.

By Scott Sowers

They say everything is bigger in Texas and when it comes to the productivity of McGuyer Homebuilders Inc. (MHI), it’s no tall tale. Since forming in 1988 the firm has built more than 50,000 homes branching out from its beginnings in Houston to Dallas-Ft. Worth, San Antonio, and Austin. MHI is currently ranked at number 34 on the Builder 100 list of top builders in the country. While busts and booms in the energy business are generally tied to what’s happening in Texas real estate, MHI’s CEO links the current expanding market to having a diversified portfolio.

“I would characterize the growth more as the corporate relocations of a number of different industries especially in the Dallas-Ft. Worth area,” says Gary Tesch, CEO of MHI. “There are some major relocations still going on including State Farm and Toyota, but job growth is really what’s driving the home building.”

MHI was founded by Frank McGuyer who remains active in the company. His original vision for the firm initially spread across two brands: Plantation Homes, which targeted entry level buyers, and Coventry which offered move-up options.

From the firm’s beginnings in the late 1980s, it closed on more than 1,000 homes by 1993. Five years later in 1998, it reached 10,000. ““We grew with the Texas housing market,” says Tesch, “while continuing to remain a company with strong local roots, which is something that allows us to be quickly adaptable to market conditions and buyer needs.”

In 2011 the company launched “Build on Your Lot,” a program designed to open up a new market. “Build on Your Lot is a way for a buyer to build one of our homes on a lot they own or in an area that we typically don’t build in,” says Tesch. “We build in the major master plans. But there are some places where somebody may have an acre or two, closer to downtown and they’ve bought an older home, they’re leveling it and they want to build a new home.”

Celebrating 30 years of homebuilding this year, MHI has built more than 50,000 homes for Texas families. One of the nation’s top-selling homebuilders, MHI is active in the Houston, Austin, San Antonio and Dallas-Fort Worth markets.

The program puts MHI into the tear-down arena with custom builders where Tesch believes they have an edge. “Instead of going the custom route which takes more time and is twice as expensive, they can basically pick one of our plans,” he says. “We can be almost $100 a square foot less than a custom guy. They get the benefit of our economies of scale using our vendors and trades. It’s a turnkey deal, they’ll get their loan in place – go through the design center, pick out the finishes and at the end we turn over the keys.”

MHI is also embracing green building techniques by building some of its homes to environmental standards including LEED. Despite all of its success, MHI is facing some of the same challenges every builder is facing in every market including one you might not expect in the Lone Star state – a lack of buildable land.

 

“In Texas, we have land and we can sprawl, which is a huge advantage and helps our affordability, but land owners are very proud of their land, and we’re seeing costs continuing to rise,” says Tesch. “We typically have developers buy the land, develop it and then we buy finished lots. But the publicly owned builders are also buying land on their own – so it’s a very competitive land market.”

Tariffs are also making it hard to keep pricing levels consistent on some of the staples of the trade. “Lumber prices went up earlier in the year, we had a huge spike, they’ve leveled off, now we’ve seen them take another jump,” says Tesch.

And of course, the labor shortage is always a challenge especially in the border states. Builders in Tesch's world find themselves competing for the trades as some of the larger firms choose to focus on the number of closings they can achieve in a year as opposed to their bottom lines. “When the publicly owned builders are trying to meet their year-end goals they were paying some of trades bonuses to complete their work and to get things done. Roofers may get paid extra to do another builder’s home first,” he says.

Coming from a history of consistent growth and looking toward a hopeful future Tesch likes the firm’s legacy. “Home building is a very noble profession,” he says. “We help Texans achieve the American dream of owning a home. What we all take a ton of pride in here is that there will be 1,700 families celebrating holidays in one of our homes every year.”

This article originally appeared on Builder Online: https://www.builderonline.com/building/builder-100-spotlight-mcguyer-homebuilders-still-racking-up-big-numbers_o
Author: Scott Sowers, Senior Editor

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