Another Home Winner: Standard Pacific Rises, Watches Rates
By MATHEW PADILLA
Standard Pacific Corp.’s revenue has increased as dramatically as mortgage rates have fallen in the past few years. The homebuilder also has benefited from a trio of acquisitions.
In fact, annual revenue at the Irvine-based company reached $2.1 billion through June 30, a 73.8% jump from $1.2 billion three years earlier. The homebuilder ranks No. 30 on this year’s Business Journal list of fastest-growing companies, up from No. 39 last year.
Standard’s acquisitions last year in Florida and the Carolinas alone accounted for the builder’s 41% rise in orders for new homes in the first quarter. California orders slipped. The southeastern states also were a boon in the second quarter, along with Standard’s Arizona operations.
Stephen Scarborough, Standard Pacific’s chief executive, said he expects to sell more than 2,000 homes in Florida and up to 600 in the Carolinas this year, accounting for more than a third of the company’s business. Last year, Standard Pacific sold 1,430 homes in Florida and the Carolinas, or 24% of its total.
The builder’s California sales, meanwhile, have declined modestly. In the second quarter, Standard received 745 new orders, down from 790 in the same period last year.
Still, in Orange County, Standard Pacific is benefiting from long-standing relationships with major landowners The Irvine Company and Rancho Mission Viejo LLC. The homebuilder has active projects in the Irvine Co.’s Quail Hill, Turtle Ridge and Crystal Cove communities, as well as Rancho Mission Viejo’s Ladera Ranch.
The company also is a development partner in Talega, a 4,000-home development on 3,510 acres in San Clemente. Standard Pacific’s partners are San Francisco-based Catellus Development Corp. and Greenwich, Conn.-based Starwood Capital Group LLC.
In 2002, Standard Pacific entered south Florida with its buy of Westbrooke Acquisition Corp. from Olympic USA Inc.’s Newmark Homes. It also jumped into central Florida with its buy of Orlando-based Colony Homes. In August of last year, Standard bought its way into southwest Florida and the Carolinas by acquiring Tampa-based Westfield Homes USA Inc.
The company’s growth in the Southeast is critical, coming as sales in California and Texas have slowed. In the second quarter, Texas accounted for 128 new orders, down from 150 a year ago.
While sales in Southern California have dropped slightly, the region still is driving profits for Standard Pacific.
Standard’s Scarborough said the company has experienced strong “price appreciation in California, where we have generated a record backlog of over 1,800 presold homes with an estimated sales value in excess of $900 million.”
But the boom days may be coming to a close for Standard and other homebuilders as interest rates rise. Mortgage rates spiked during the summer and then cooled a bit. They are climbing again.
