Except for the attractive gray-haired people in its advertisements, you might not get it at first that Shea’s Trilogy communities are age-targeted. In fact, it’s not particularly clear that they are selling houses at all. Instead, you get the distinct impression you’re being enticed to buy into a resort. Sales prospects are called “guests.” The people who live there are referred to as “members.”
Yet a niche is what Shea has carved out for itself. It has become a preeminent creator of upscale lifestyle habitats for those 40 and older–preferably closer to 40 than 70 to keep its communities looking younger.
The strategy has worked. The company has grown its active adult communities from nothing in 1999 to the largest division of Shea Homes in terms of revenue and units closed in 2006.
Most recently, the company’s age-targeted products received the highest customer satisfaction ranking among the builders of the largest adult communities in the J.D. Power and Associates 2007 rankings, beating out even Del Webb, a pioneer in the market.
Impact
Shea’s success is likely to raise the bar in the active adult market as other builders strive to gain market share in this niche that is selling better in the downturn than other specialties.
It might be tough for some to catch up. A thousand details make Shea’s communities feel oh-so-upscale, from the Brooks Brothers suits the sales force is required to wear–even in the Southwest’s desert heat–to the air-conditioned golf carts.
Vitals
Jenkins is responsible for all the land acquisitions by Shea Homes Resort Communities. Before going to work for Shea two years ago, Jenkins worked for Newland Communities as president of its Texas and Arizona divisions, and later as corporate senior vice president of acquisitions.
Outlook
For the days to come, expect to see more of the same. “We are continuing to open our flagship communities,” Jenkins says. And, unlike many builders, Shea is actively looking to buy more land. “The last offers [on land] that I have extended have gone out within the last 30 days. What that comes from is the very young age of our division. We were short on land at the time when the markets were very overheated in 2004 and 2005. We only bought two or three land positions in those two years, and three are coming online today, so we very much need land. It is very difficult in trying to get the financial return that our investors require, so the underwriting process is rigorous, it is extremely conservative.”
–Teresa Burney
