Jumping into Central Texas’ robust housing market, Colorado-based Century Communities Inc. has acquired the Austin and San Antonio assets of Georgetown-based Jimmy Jacobs Custom Homes.
Combined with six other new transactions in Austin, Century Communities now has ownership or control of 915 lots in Austin and San Antonio, at a time when developed lots in prime locations are in short supply.
“These transactions highlight our entry into one of the strongest areas in Texas and represent a natural continuation of our strategy to focus on the best locations in markets with favorable demographics and economic growth,” said Robert Francescon, co-chief executive officer of Century Communities.
“Austin has been one of the fastest-growing metro areas in the country over the past several years having attracted some of the most innovative companies, resulting in strong population and employment growth and tight supply of homes for sale.”
Century Communities was represented by Michael P. Kahn & Associates LLC.
Michael Kahn, managing principal of Michael P. Kahn & Associates, said Century bought the “vast majority” of Jimmy Jacobs’ assets and operations, though “not 100 percent.” Century plans to continue to use the Jimmy Jacobs brand, Kahn said.
Century Communities is a leading builder of upscale single-family homes, townhomes and flats in desirable areas in Denver, Colorado Springs, Fort Collins, Colorado, and now, Austin and San Antonio. Steve Hayes, a 20-year veteran of the Texas home building industry, will head up Century’s Central Texas operations as division president.
Eldon Rude, a longtime Austin-area housing industry analyst, said he has had “many conversations in recent months with builders eager to enter the Austin market, and all of these builders are finding that securing lots in good locations is by far their biggest challenge.”
“There are only two ways to establish a new home building presence in our market, either by starting from scratch and purchasing lots where they are available, or by acquiring an existing builder that already has lots in locations where they would prefer to build,” said Rude, principal of 360 Real Estate Analytics, a market research and consulting firm.
“With the extremely tight supply of lots now available in our market, it is no surprise that Century Communities elected to purchase Jimmy Jacobs Homes, which has an established name as well as available lots in desirable locations in the region.”
Mark Sprague, another veteran local housing expert, said the acquisition is a “great opportunity” for Century to establish a presence in a market that is just now seeing “the tip of the iceberg” of a lot shortage.
“It takes two-and-a-half years easily” to deliver new lots to the market,” Sprague said. “There just aren’t enough lots.”
Rude said he would not be surprised to see “several more transactions in the coming months where outside builders acquire established builders in Austin, with their primary motivation being securing lots in what is a very tight market.”