Leaning Forward
Florida’s Neal Communities never tires of seeking new paths to growth.
Neal Communities sold 48 homes in November, its best month of 2011. It ended that year, once again, as the No. 1 builder in Florida’s Sarasota-Manatee counties. And as his company enters its fifth decade, Pat Neal, its 62-year-old CEO and owner, sees even more prosperous days ahead.
”We intend to be the largest builder in Englewood, Venice, and North Port [Fla.],” where Neal Communities has purchased about 2,500 lots over the past three years. Neal adds that his company has, or is in the process of, acquiring seven land positions in the submarkets of Fort Myers, Estero, Bonita Bay, and Naples, Fla.
Neal Communities is shooting for 435 closings and $98 million in revenue for 2012. Those numbers would represent double-digit percentage gains over last year, when the company made several moves that set the stage for future growth:
- It launched a pool installation company, Waterscapes Pools & Spas, which completed more than 140 pools in 2011;
- It formed a joint-venture partnership with a Texas-based mortgage company, which captured more than 70 percent of its buyers and helped reduce cancellations by 11 percent; and
- It added a new title business.
The builder integrated land acquisition and development into its home building operations and shifted those operations to a production-based model while, at the same time, establishing a separate, semi-custom home division called Neal Signature Homes.
Market circumstances dictated these changes, specifically when builder-customers for developed land disappeared. Neal admits, too, that operating separate home building divisions is a challenge, and that Neal Signature’s success depends, in part, on the development of its own electronic-based platform to which Neal Communities has been migrating its production homes division.
That platform integrates sales contracts with the company’s accounting software; delivers orders and scheduling online; manages an automated auto-pay system; and integrates community development scheduling. The platform allows Neal Communities “to compete on price, process, and organization with the national companies,” says Neal.
Neal Communities
It definitely made Neal Communities more efficient. The company’s cycle time—from groundbreaking to delivery—is down to 14.5 weeks, from 24 weeks 12 months earlier. Building quicker is important at Neal’s most successful project, the 826-homesite Central Park at Lakewood Ranch, which Neal Communities opened in July 2010 and where, by early December 2011, it had sold 147 homes.
Central Park’s models range from 1,040 to 2,442 square feet and start at $126,900. Neal Communities has been one of the industry’s leaders in building more efficiently: Its average home size, overall, has shrunk to 1,700 square feet, from 2,400 square feet in 2005. The project’s 960-square-foot bungalow became an instant bestseller a few years ago.
The Neal family’s wide-ranging philanthropic endeavors include donating 117 acres in Manatee County for the creation of Neal Preserve, which protects an ancient Native American site. Last year it made a 50-year commitment to the Boys & Girls Club of Manatee County, to which it will contribute one-quarter of 1 percent of the closing price of every home it sells at its 300-acre Canoe Creek community.
Learn more about markets featured in this article: Oklahoma City, OK, Charleston, SC, Naples, FL.
