Berkshire Hathaway’s Clayton Properties Group is not done yet with its shopping spree for fast-growing, entrepreneurial home building operators. Continuing to add to a growing, nationally-dispersed portfolio of site-build firms, Clayton today announces its newest addition, Brohn Homes, an energized Austin, Tex.-based private firm with an ambition to get bigger fast.
The sixth jewel of a crown whose focus is on Clayton’s ability to secure a land pipeline and deliver new homes to the dynamic lower-price tiers of the entry-level and first-time home buyer market, Brohn Homes adds Texas to Clayton’s quiltwork of acquired firms–Oakwood Homes in Colorado and Utah, Harris Doyle Homes in Alabama, Summit Homes in Missouri, Goodall Homes in Tennessee and Chafin Communities in Atlanta.
In each acquisition, Clayton’s emphasis has been on three primary priorities:
- An energetic, “team member”-centric culture
- A product and value proposition for affordable for-sale communities
- An asset-medium land acquisition expertise
Adam (left) and Aaron Boenig
A press statement due out Monday morning notes that brothers Adam and Aaron Boenig–co-presidents of Brohn–founded the firm as a custom builder in 2003, and emerged out of the Great Recession as a higher-volume production builder, with luxury product offerings as well.
In 2017 Brohn Homes started 254 homes, sold 270 and closed 253 homes in 12 communities. In 2018 Brohn Homes anticipates selling approximately 400 homes in 13 communities. The principals, Aaron and Adam Boenig, are both graduates of Texas Tech, with degrees in landscape architecture and land planning and development. Unlike many other private home builders, their repertoire of core skills includes product design, conceptual planning, and feasibility, expertise other firms need to reach outside for.
Also in 2017, Brohn Homes introduced its more affordable level brand–Waterloo Homes–to its mix of community offerings, which the Boenigs say now represents 50% of total volume deliveriees in 2018, and about 35% of revenue.
“Brohn Homes immediately impressed us with their creativity and variety of homes,” said Keith Holdbrooks, president of Clayton Home Building Group. “Their willingness to try new ventures, such as the innovative affordable line – Waterloo Homes –, and focus on growth are areas of importance for our industry. The culture at Brohn Homes is a true testament to their emphasis on team member engagement and experience. We are a people company at Clayton, and Brohn Homes’ culture aligns with our steadfast commitment to team member experience.”
Even as widespread conjecture spotlights the increasing odds of a convergence between Clayton’s ever-more robust portfolio of site-build, stick builder home builders and its highly automated, factory offsite manufactured home facilities, a less-evident, equally critical priority for Clayton is expertise and local relationships needed to secure homesites in adequate amounts to feed the Clayton construction capacity machine.
Affordably-priced homes are only as viable as the low price tag and managed expense base of the building lots Clayton acquires, and the private home building operators Clayton has assembled serve as eyes, ears, expertise, and trusted relationships on the ground among would-be land-sellers and developers of those lots that will pencil for lower-priced new homes and communities.
In Clayton, Brohn Homes’ two principals–Aaron and Adam Boenig–have found a parent organization that has bought into their vision, their skillsets as operators, and their ambitions for growth. Those ambitions include expansion in the near-future to other markets in Texas, and possibly beyond. The Boenigs will focus first on what they see is ample opportunity for growth in the Austin market, with San Antonio as a nearer-term expansion market. Houston and Dallas are also in their mid-term sights for growth, thanks in part to the capital infusion they’ll get from their new parent.
“Clayton’s and Brohn’s cultures were a great fit with one another,” says Aaron Boenig. “They were also excited by the innovative push we made into the entry-level market in the past 18 months with our Waterloo brand. In the near future, our plan is to get our ASPs down below $300,000.”
The Boenigs, represented in the deal by San Francisco-based Builder Advisor Group, have operated Brohn independently for 15 years, and built skills in design, land acquisition, marketing and sales, as well as construction operations.
“Our payroll systems and benefits moved over to the Clayton platform, but other than that, everything, every system, every process is the same as it was,” says Adam Boenig. “The capital access we now have with Clayton will charge up our growth opportunity, and in every other way, the integration is seamless. We couldn’t have drawn up a better alignment than this one in our imaginations.”
