Beazer Homes pulling out of state
Atlanta-based firm will close shop in Denver, Springs
By John Rebchook, Rocky Mountain News (Contact)
Tuesday, June 3, 2008
Atlanta-based Beazer Homes, one of the most troubled home builders in an ailing industry, is pulling out of Colorado.
The company builds in the suburbs of Denver and in Colorado Springs.
Larry Hotz, a long-time broker for Kentwood Co., said he received an internal memo from Beazer saying it will close its Colorado operation Oct. 31. Others, including consultant S. Robert August and broker Gary Bauer, said they received information that Beazer would close shop by June 30 in Denver and Colorado Springs.
Beazer, which is being investigated for mortgage fraud by the FBI and the Securities and Exchange Commission and other government agencies, did not return calls from the Rocky Mountain News to its Denver or Atlanta offices.
Beazer's stock closed at $6.89 on Tuesday, down more than 80 percent from its 52-week high of $35.89. It currently has a market cap of $270 million; a year ago it was $1.4 billion.
August said Beazer is the only national builder to leave Denver duringthis real estate downturn.
"Neumann Homes (of Warrenville, Ill.), declared bankruptcy last fall and left Denver, but they only built in three or four states. They had a much smaller presence here compared to Beazer," August said.
Hotz said the internal memo didn't say why they were pulling out, but noted that Beazer will complete all houses that it started, but will not start any new ones.
Beazer also said in the memo that it will pay all of its bills and honor all warranty obligations, even beyond the October closing, Hotz said.
Beazer entered the Denver-area market in 2001 when it bought Sanford Homes in a $64 million deal, which included cash and debt assumption. At the time, Beazer was the nation's eighth largest home builder.
"Tim Sanford had a really good product line, which was uniquely tailored to Colorado," Hotz said.
"Their floor plans lost something in translation after Beazer bought them. And they kept buying land farther and farther out from the core area and their existing projects. The farther you go out, the harder it is to sell homes, especially in trying times like these."
But he said with slower sales, it is possible that the company became over-extended and lacked the cash to keep its Colorado operation afloat.
rebchookj@RockyMountainNews.com or 303-954-5207
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June 4, 2008
4:25 a.m.
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windbourne writes:
Ouch. Sanford is a really nice home. And unlike much of the garbage here (i.e. kb, park), these are well built.
June 4, 2008
6:52 p.m.
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cirqueboi writes:
I am a new Beazer Homeowner in Thornton and was advised of Beazer's decision to leave Denver last week. With over 50 empty lots, various common areas requiring landscaping and an uncompleted park in our community, I can only hope Beazer keeps their word in at least completing the common areas and park.
July 9, 2008
8:52 a.m.
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nomad writes:
I bought a Beazer home in Copperleaf. Good luck Cirqueboi! My home is one lot away from the "park" that the Beazer sales people told me Beazer was going to build by the end of this year. That was one of the main reasons that I bought the house. After numerous e-mails and phone calls I learned that Beazer advises that you can't believe what thier sales people tell you, and that they are not obligated, nor are they going to, build the park. If you already own a Beazer Home (like me)... I'm sorry. If you don't, I would not suggest that you buy one.