John Laing Mounting Push Into Luxury Homes
By DANIEL D. WILLIAMS
Homebuilder John Laing Homes, which takes its name from Britain’s Sir John William Laing, has built its share of big homes in nice neighborhoods.
But, up to now, the company has focused on what the Brits might call “commoners”,first-time and move-up buyers.
Now, John Laing Homes, part of Newport Beach-based WL Homes LLC, has formed a new luxury home arm and tapped a seasoned hand to run it.
The division, which plans to build homes of 3,500 square feet or larger with a minimum price of $1 million, is headed by Tom Redwitz, a former division president at Taylor Woodrow PLC’s Irvine-based unit, Taylor Woodrow Homes Inc.
The move is the flipside of Taylor Woodrow’s recent shift from its base in luxury homes into the first-time buyer and move-up markets.
John Laing’s luxury arm has two projects in the works at Crystal Cove and in Calabasas, Redwitz said. The unit plans to build 25 to 75 homes per project, he said, though in some cases it could build fewer. It’s not looking to build single luxury homes here and there, according to Redwitz.
“The goal of the group is to compliment the parent company’s current operations and expand its market position,” he said.
The Crystal Cove project calls for 40 homes with building to start in the fall. Completion is pegged for a year from now. The homes are to be about 3,500 square feet on 8,000-square-foot lots.
While homes prices could shift between now and next spring, Redwitz said he expects prices in the mid-$1 million range.
The Calabasas project, named The Oaks of Calabasas, includes 26 15,000-square-foot lots with homes starting at 5,700 square feet. Prices are set to start around $1 million with models opening in April 2003.
John Laing faces challenges in luxury homes, according to John Burns, president of Irvine-based John Burns Real Estate Consulting Inc.
“Your high-end buyer is a very tough buyer,” he said. “And they might change their mind 20 times on design, forcing construction delays. If you don’t keep close track of all the changes, you can lose your shirt.”
But with Taylor Woodrow’s shift away from luxury homes, there’s room for John Laing, Burns said. And Redwitz has done this before, he noted.
During Redwitz’s six years at Taylor Woodrow, the local unit produced more than $1 billion in revenue and nearly $200 million in profits with high-end projects such as Castaways, Perazaul, Watermark and The Villas at Shady Canyon.
Profits can be tough in the high end, though, Burns said. Most buyers are on their third or fourth home and know how to squeeze the blood out of a turnip during price talks, he said.
But Orange County’s makeup is favorable to a surge in higher priced homes, Burns said.
“Orange County has never experienced a surge in older buyers like it will see over the next 15 years,” he said.
Even if no one was allowed in or out of OC in the next 15 years, supply wouldn’t keep up with demand for high-end homes, Burns said.
“In Orange County, 80% of the homes are less than 2,000 square feet,” he said. “The county was built mostly for the entry-market baby boomers who worked up in L.A.”
Parent WL Homes,which executives bought out a majority stake in last year from Britain’s John Laing PLC,has made other recent moves. Last month, the company sold its Las Vegas and Salt Lake City operations to Denver-based MDC Holdings Inc.’s Richmond American Homes for an undisclosed sum.
