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Florida's Home Builders - Post-Bubble

Monday, November 1, 2010

Mike Vogel

Florida Trend Magazine

GL Homes division President Jill DiDonna looks at her company's row of model homes from its new sales center at Valencia Reserve, a 700-home project among the farm fields west of Boynton Beach. "Who's building 12 completely furnished models in this economy?" she asks. "I think you would be hard-pressed to find one in the United States."

As competing home builders retreated from the market in the past two years, lightly leveraged and privately owned GL went forward, rolling out new homes and developments such as Valencia, a 55-and-over community concept that the Sunrise-based company has reproduced so often it's like a movie franchise.

GL owes its good fortune to a confluence of factors. After weathering the late 1980s real estate collapse, Israeli immigrant and founder Itchko Ezratti's strategy has been to continue building amenities such as clubhouses and to keep sales centers open to assure existing and potential residents of GL's stability. In some of his markets, as others stopped work, he became the only new-home game in town. Real estate research firm Metrostudy says GL has captured half of the new-home market share in Palm Beach County. "GL is really doing extremely well given the economy and everything else. People are turning up in droves to buy houses," says Brad Hunter, Metrostudy's chief economist and national director of consulting. "They have strong locations. They have strong product that appeals to home buyers. They have a good reputation. They market well."

The company even has managed to sell 60 homes this year in the foreclosure-shrouded Fort Myers market, third nationally in foreclosure filings in August. Buyers primarily came from outside Florida; locals can't sell their existing homes to move. The company has nine developments under way totaling 6,475 houses in Collier, Lee, Hillsborough, Palm Beach and Indian River counties.

Much of Ezratti's holdings had been land-banked at preboom prices. And through onerous contract terms and even a "no investors" banner at a grand opening, he discouraged the speculative buying that hammered other builders when investors walked on contracts.

GL says it's profitable, but it's not disclosing financials. It has taken its lumps. The company made 1,100 sales in 2009, down from 1,800 at the peak. Its employee count is half what it was.

The company has made some adjustments, lowering ceilings or shrinking picture windows but otherwise, DiDonna says, has stuck to what buyers in its price range — the average sale is $413,000 — expect.