Taylor Morrison hits its stride quickly after acquisition

Taylor Morrison, a New York Stock Exchange-traded homebuilder based in Scottsdale, Arizona, entered the Chicago market last July by purchasing Orleans Homes' holdings here. The company also purchased Orleans' operations in Charlotte and Raleigh, North Carolina, for approximately $166 million. Orleans' remaining operations in Pennsylvania, New York and New Jersey were later purchased by Lennar Corp. and Orleans, for all intents and purposes, ceased to exist.

Bob Meyn, formerly the Midwest director of sales and marketing for Orleans, now serves as vice president for the Chicago division of Taylor Morrison.

"We are so pleased to welcome these Orleans team members into the Taylor Morrison family," Sheryl Palmer, Taylor Morrison's president and CEO, said at the time of the announcement. "Consistent with our focus on building quality homes in core locations, these Orleans businesses are in high-growth areas where consumers want to live, aligning with our strategic priorities. Together, we'll be able to expand on the Orleans platform and enhance its reach within these specific markets, while at the same time diversifying our consumer base."

Meyn said the work Orleans began allowed Taylor Morrison to quickly hit its stride in the Chicago area.

"Over the last three or four years we have seen a slow resurgence of the Chicago market. In fact, as Orleans, we started reinvesting in the market back in 2012," he said. "Orleans Homes invested heavily in land during the downturn, purchasing ready-to-build-on lots from banks, investors and other builders during 2012 and 2013 so that they would be ready to hit the ground running when the market turned around."

Then the company moved on to purchasing property where lots had been platted and zoned, but not yet developed. Now, Taylor Morrison is acquiring property that is totally un-platted and undeveloped so that it can replace communities as they become completed.

In fact, Taylor Morrison has recently announced three new communities. Two are single-family communities, each featuring a relatively small number of homes, 30 and 63, respectively, and the third is a townhouse community made up of 101 units along the train line in Des Plaines.

"We have grand-opened Creeks Crossing in Algonquin, which will feature 30 single-family homes. Half the sites back up to permanent open space and many allow for walkout basements," Meyn said. "These two-story homes, featuring stone or brick fronts, lend themselves to move-up buyers and range in price from the $360,000s to the low $400,000s."

The company has also purchased the 63 remaining lots in a 75-lot subdivision begun by another builder before the recession. Tallgrass in Lake Barrington, at the intersection of Kelsey and River Roads, is an exclusive single-family community where homes start in the $700,000s. Meyn said the community will offer ranch homes, conventional two-story homes and two-story houses featuring first-floor master suites, situated on one-acre homesites. Tallgrass is expected to hold its grand opening in May.

Finally, infrastructure work began last fall on Colfax Crossings, a townhouse community half a mile from the Des Plaines train station. Units there will sell in the upper $200,000s and are expected to appeal to young working people who want to be close to a vibrant downtown and to the train. Models are expected to open there in April.

Currently, Taylor Morrison is also building at Blackberry Creek in Elburn, Countryside Meadows in Hawthorn Woods, Stonebrook in Elgin, Verona Ridge in Aurora and Woodland Hills in Lakewood. They are simultaneously closing out several other communities in Oswego, Hawthorn Woods, Kildeer, Barrington and Sugar Grove.

In addition, Meyn said Taylor Morrison is now planning a new community of 425 ranch homes located one mile east of downtown Lake Geneva, Wisconsin. It will feature a full amenity center with a swimming pool and other facilities and is expected to start selling in early 2017. It will not be age-restricted, but is expected to be particularly popular with active adults.

"We are bullish about the future of the Chicago market and are concentrating our efforts on three specific types of buyers: move-up buyers, move-down empty-nester buyers and those who want infill locations of all housing types," Meyn said. "We are seeking infill locations in highly desired communities and expect 2016 to be slightly better than 2015 was for us and for the market to continue to slowly improve, although I am not sure that it will ever boom again in places like Yorkville and beyond."

Instead, he said, Taylor Morrison and other builders are hopping over those outer-ring communities in order to buy land in the Lake Geneva area, which Meyn said has been underserved in specific price ranges and lures people with its picturesque locale and low property taxes.

"Being acquired by Taylor Morrison was perfect for us. Orleans was a privately owned company that was the 63rd largest homebuilder in the country. When we were purchased, we grew overnight from being the 63rd largest to the sixth largest homebuilder in the country. Taylor Morrison has tremendous capital, which will give us the ability to grow even further and makes us even more attractive to land sellers, potential partners and vendors," Meyn said.

For more information about Taylor Morrison homes and communities, visit www.taylormorrison.com/new-homes/illinois/chicago.