One of the nation’s largest homebuilders is moving its headquarters from California to Dallas’ Uptown district.
Landsea Homes Corp., currently based in Newport Beach, will take over 7,716 square feet of space on the 10th floor of 1717 McKinney Ave., the company said Monday.
“As a national publicly traded homebuilder with communities from California to Florida, this is a strategic move in the best interests of our shareholders,” CEO John Ho said in a statement.
“In addition to the logistical advantages Dallas offers, we believe this relocation is beneficial from a number of standpoints, including a lower cost of living and access to a highly educated workforce, which are critical as we continue to build our corporate team.”
Landsea Homes is active in California, Texas, Arizona and Florida. The company builds single-family homes, mid- and high-rise properties and master-planned communities. In 2021, it bought 900 lots in the 1,500-home Anthem Texas master-planned community in Kyle.
The builder ranked as the 47th-largest in the nation with 1,640 closings and $936 million in gross revenue in 2021, according to the annual Builder 100 list. At the end of 2022, it had 462 employees nationwide.
“In addition to our overall coast-to-coast growth strategy, we are very focused on growing our homebuilding footprint in Texas, and this move demonstrates our strong commitment to the state,” Ho said in a statement.
The company joins other publicly traded residential real estate companies based in North Texas, including homebuilders D.R. Horton and Green Brick Partners, materials supplier Builders FirstSource and mortgage lender Mr. Cooper Group.
Ho said in an interview that the company found Dallas to be a business- and tax-friendly environment and that the region provides easy access to talent, being home to many other public companies and homebuilders. He said the corporate office in Dallas will have about 20 to 30 employees.
Landsea Homes was founded in California in 2013, backed by Chinese real estate development firm Landsea Group.
The company went public at the start of 2021 with primarily a West Coast focus. Later that year, it acquired Vintage Estate Homes, a Florida-based homebuilder with communities in that state and in Austin and San Antonio, for $54.6 million in cash. Last year, it bought Orlando-based Hanover Family Builders for $179.3 million.
“It was really important for us to grow in markets that we thought were high-growth markets, that included Texas and Florida,” Ho said.
Landsea has not yet built homes in North Texas, but Ho said the company is looking to expand into the Dallas and Houston markets.
The company pivoted toward more affordable and attainable homes in 2018 after primarily building luxury homes in coastal markets such as in California and New York, Ho said. The change was driven by its target demographic of millennials having less money to put toward down payments.
He said markets like Texas, with a lower cost of living than the coasts, are important for the company’s long-term growth. Its homes start in the $300,000s in Phoenix and in Florida, and Ho expects to also build at an entry-level price point in Texas.
“Now you think about what is going on in the housing market with mortgage rates, and how high those have risen, it’s more important now than ever that we’re building affordable and attainable products for our customers,” Ho said.
Ted Wilson, principal of Dallas-based housing analyst Residential Strategies, said the move makes sense from an operational standpoint, with Dallas being centrally located in the U.S. and so close to DFW International Airport. He also noted that Dallas-Fort Worth is one of the top markets for homebuilding in the nation.
“Even though they don’t have a current construction footprint in this market, I think long-term, they see the viability of the Texas markets and want to be there,” Wilson said. “It was a proactive move on their part.”
Landsea’s move continues a trend of California companies moving to the Lone Star State.
From 2015 to 2022, 271 companies moved their headquarters to Texas, bringing more than 6,420 new jobs to the state, according to a report from Texas Economic Development & Tourism, which is within the office of Gov. Greg Abbott. Relocation activity spiked in 2020 and 2021, according to the report.
In Dallas-Fort Worth, notable California-to-Texas relocations include Plano-based Toyota North America, Westlake-based Charles Schwab and Grapevine-based Kubota Tractor.
Landsea soared in its third-quarter earnings release, issued in November, but warned of headwinds ahead in the housing market. It will report fourth-quarter and full 2022 earnings Tuesday.
The company reported a 57% increase in revenue to $335.6 million in the third quarter from $214.1 million a year before, which it said was driven by higher sale prices. Landsea homes sold for an average $601,000 in the third quarter, compared to $550,000 a year before.
The company made $20 million in profit, up from $10.8 million in the third quarter of 2021.
But as new home sales activity slowed amid higher interest rates and fears of an economic downturn, Landsea saw a dip in sales orders, from 275 homes in third quarter 2021 to 257 in third quarter 2022.
