Florida. Builders speak of the state today as they would the site of a massacre. And Mark Wilson doesn’t sugarcoat the adversity his Naples, Fla.-based company, London Bay Homes, has faced. “The last two years have been a very tough market to manage through,” he says. “We saw a significant falloff in the second half of 2008. We stopped building specs fairly early in the cycle” and carried out “considerable layoffs.” For 2009, volume was down 55 percent from its 2007 peak of $72 million ($20 million of which was in custom homes). But Wilson approaches the crash as an astute businessman who knows that even this crisis presents opportunities. “It’s a leadership issue,” he explains. “You’re dealt the cards that you’re dealt, and you play them so you come out with the advantage.” The bad news, he continues, “is that Florida was hit pretty hard. The good news is, I’m in a town with lots of wealthy people. Sophisticated buyers understand the market data. They know that GDP has gone positive,” signaling the bottom of the recession—and a buying opportunity. “It’s not a consistent market at this point, but we’re seeing some good activity in the very luxury end of the business.” One such project, now under construction, measures 13,000 square feet and has a “very high-end budget,” he says.
Sophisticated buyers also tend to be sophisticated investors, and a number of Wilson’s clients have diversified into real estate by investing in London Bay. “We sold 20 percent of the company just about a year ago for $17.5 million,” he reports. The capital infusion has allowed the company to buy land at bargain prices, which should give it a competitive advantage if the market rebounds as Wilson and his management team expect. “We see this as an opportunity to step into the market when it’s already bottomed,” he says. “We’re buying some parcels that are for custom homes and some that are for neighborhoods. We’re reasonably optimistic about the short term; we’re very optimistic about the medium term.”
To survive a deep recession, Wilson says, “you need two things: a strategic plan and access to capital. We’re lucky enough to have both.” Good timing helps too. “If this had to happen, I’m glad it happened early enough in my career that I still have the energy to get up and go,” he says. “I come up to 50 next year; thank God I’m not 60. I might not have the energy.”
London Bay Homes, Naples, Fla.
www.londonbay.com
Type of business: Custom builder
Years in business: 20
Employees: 30
2009 volume: Withheld
2009 starts: Withheld
