As a historic apartment boom keeps growing, one of Charlotte’s most active development companies is jumping into the homebuilding market: Crescent Communities has launched a new division that will construct single-family houses.
Called Fielding Homes, Crescent plans to start its single-family construction in a new subdivision it’s developing just south of Charlotte, at Masons Bend in Fort Mill, S.C. The company will build 64 single-family houses at Masons Bend, which will total 650 houses near Interstate 77’s crossing over the Catawba River.
Typically, a developer assembles and subdivides the land, gets the necessary zoning approvals, creates master plans and lines up financing for a project. Then, the developer will partner with a homebuilder who specializes in residential construction to build on the site, or, in the case of a commercial development, with a general contractor.
Crescent’s new Fielding Homes division represents a new leap for the company, and a bet on the strength of the housing market. The company is hoping to win market share from other homebuilders and capture some of the older millennials who have put off buying a house but are now having kids and aging out of apartment communities.
“As one of the nation’s leading residential developers, it is a natural progression for us to extend our successful approach into home building and to further enhance our communities by overseeing the development process from start to finish,” said Todd Mansfield, Crescent Communities CEO, in a statement. “We feel that our involvement in the home building industry will add value to our entire portfolio.”
New home sales have recovered slowly in the aftermath of the real estate crash, but demand has risen. In December, new home sales increased to a seasonally adjusted annual rate of 544,000, up almost 11 percent. Still, that’s below the historic average, indicating the recession’s after-effects are still lingering.
At Masons Bend, Crescent has already announced Saussy Burbank and Cunnane Group will build a total of 72 houses in the development’s first phase. The company said it plans to develop and build some of the lots in its residential projects itself through Fielding Homes, and will work with other homebuilders on the rest. The company’s projects include developments in Raleigh and throughout the Southeast.
In an interview with the Observer, Fielding Homes division president Steve Francis said starting its own homebuilder made business sense for Crescent. As single-family house sales plunged following the recession, Crescent was squeezed by the homebuilders it sold lots to in its developments.
“Through the downturn, they saw, as the market took a reduction, a lot of builders went in there and renegotiated lot prices,” said Francis. “The ability for Crescent to make their requisite returns got more difficult.”
Now, with its own homebuilder, Crescent can more fully control the development and building process. If demand slackens, it can build houses itself without lowering prices on lots to lure other homebuilders. Francis said Fielding Homes can function as a hedge for Crescent against downturns while allowing the company to capture more market share during boom times.
He also said that as millennials look to buy houses, Crescent – which has placed a major emphasis on building apartments in recent years – will be able to offer them a product.
“That’s something we’ve talked about, continuing that buying cycle from the apartment renter to when they make those home buying decisions,” said Francis.
A proposed moratorium on new houses being built in Fort Mill shouldn’t impact Masons Bend, Francis said, because Crescent already has the necessary entitlements to build on the land. Such a freeze could actually make communities already under construction such as Masons Bend more attractive, Francis said, by limiting the supply of new housing.
A luxury lakeside history
Crescent began as a division of Duke Power called Crescent Resources, created in 1963 to manage Duke’s vast land holdings around lakes and rivers. Through the early 1980s, the company stuck to managing Duke’s land, some of which it used some for commercial forestry.
Crescent first made its name as more than a land management company by developing upscale lakefront subdivisions in and around Charlotte. In 1989, the company opened The Peninsula subdivision on Lake Norman, and then added developments such as The Sanctuary on Lake Wylie and Ballantyne Country Club in Charlotte. In the 2000s, Crescent expanded its apartment and commercial developments.
But in 2009, in the midst of the real estate crash, Crescent filed for bankruptcy protection, brought down by its debt load. The company emerged from bankruptcy and changed its name to Crescent Communities.
Since the recession, Crescent has focused more heavily on apartments and urban developments. The company’s recent projects in Charlotte include Crescent Stonewall Station, an uptown, Whole Foods-anchored project with hundreds of apartments on the Blue Line light rail, and Crescent NoDa, an apartment community that will be tied to the light rail stop at 36th Street.
Emphasis on ‘personalization’
Executive vice president Scott Widener, vice president of sales Jumana Kayed and Francis will lead Fielding Homes for Crescent. The team includes executives with experience at homebuilders ranging from Toll Brothers to KB Homes to Standard Pacific.
The company will have more than a dozen floor plans and six exterior options, with extensive chances for personalization, Crescent said. Its sales centers will include a design studio to help buyers plan their houses.
Francis said that while Fielding doesn’t intend to be a custom homebuilder, the company will offer more extensive options for changing a house to fit an owner’s individual preferences than many of its rivals. Instead of a standard three levels of interior finishes to choose from, buyers will have a wider array of choices, especially in the kitchen and master bathrooms.
“We will be open to more levels of personalization for buyers for options that fit their preferences more than most production builders,” said Francis.
The houses Fielding Homes builds at Masons Bend will range from 2,800 square feet to 4,000 square feet, Crescent said. Prices will start in the mid-$300,000s.