Newport Beach’s John Laing Homes has been looking to grow beyond its core market of California.
But for its newest line of business the homebuilder is looking to its own backyard.
Make that the yards of some of Orange County’s wealthiest.
John Laing this month is starting a custom homebuilding business that’s seeking to help landowners in some of the county’s upscale coastal areas design and build multimillion-dollar homes.
Rather than build on land owned by John Laing, the new business is looking to work with customers who’ve already paid top dollar for undeveloped lots and are looking to build upscale homes from scratch in Dana Point’s the Strand at Headlands, Newport Coast’s Crystal Cove and other areas.
The custom business, part of Laing’s luxury homebuilding division, will be starting off locally, targeting spots from Newport Coast to San Clemente, as well as San Diego County’s Rancho Santa Fe.
Laing has about half a dozen projects in the works for the rest of 2008.
While many of the country’s largest builders offer high-priced, semi-custom homes, it’s rare for a builder of Laing’s size to dedicate the resources to take a custom project from early planning all the way to completion.
But with the housing market stalled, Laing sees the high-end market as an avenue of growth.
Most of the area’s most striking new homes have been built by smaller, boutique firms that focus on the high-end market.
Notable builders in areas such as Shady Canyon and Crystal Cove include Trabuco Canyon-based Stonefield Development and Irvine’s Glass Construction Corp.
Expensive Endeavor
Custom homebuilding is a time-intensive process, not to mention an expensive one.
In an area like Crystal Cove, it costs $300 to $500 per square foot to build a custom home, according to The Irvine Community Development Co., the land development arm of The Irvine Company, which is overseeing the nearly 800-home community. That figure doesn’t include land costs.
At the 121-acre the Strand at Headlands, where construction has begun on the first few homes, residents can expect to spend close to $4 million or so for their custom homes.
That’s on top of land prices that have run close to $30 million per acre and are sold in one-fifth acre lots,the highest land prices seen in OC.
It can take more than a year to select architects, designers and contractors and to get custom homes’ plans approved. Building the house can take an additional two years.
Laing’s new operation aims to consolidate the process, including pre-development, permitting, architecture, construction, landscaping and financing.
It should make the entire process faster and lower costs, said Craig Delahooke, who is heading up the business for Laing.
The company is also offering a general contractor service for buyers who already have a design in mind. The company won’t be taking on home additions or remodels for the custom home program.
Laing doesn’t have a minimum home price for prospective projects.
“We’re willing to meet with people,” Delahooke said.
The company is counting on the reputation of Laing’s luxury division to help bring it customers, he said.
“We’ve been asked by customers for years if we’d take on a (custom) project, but we declined to do so,” primarily due to time and manpower issues, Delahooke said.
Why Not?
The decision to start the business now evolved from several one-off construction projects at some of its higher-end developments, according to Jeff Golden, director of sales for Laing Luxury.
At its 29-home SeaCrest development at Crystal Cove, where homes have sold for nearly $10 million, the company is in the midst of adding a 3,200-square-foot basement to one previously completed home.
At other homes in the posh development, it’s done extensive interior remodeling efforts, and has re-worked landscaping around homes for new owners.
Golden describes Laing Luxury’s work in Crystal Cove’s SeaCrest and 27-home SeaPoint as “semi-custom,” with a large number of interior and landscaping touches available to buyers. It makes for a wide range of home styles in the developments.
The new business is one of the last for Laing that has the fingerprints of outgoing chief executive Larry Webb on it.
Webb, looking to maximize growth in high-profit niches, pushed for the start of the Laing Luxury division in 2002. By 2004, the division,headed by Tom Redwitz,had closed on close to 100 homes for $357 million in revenue.
Webb recently announced his departure, effective at the end of the month. He’s being replaced by Robert Booth, who heads up Canadian operations for Dubai-based real estate developer Emaar Properties, which acquired John Laing two years ago.
Laing’s luxury division,where buyers aren’t as affected by the credit crunch,has held up better than the rest of the company during the market, according to Golden.
One upside to the slower market is that there are more contractors looking for work, which could speed up the construction process for those looking to build a custom home, he said.
