Sometimes, real estate is a family affair. In the following interview we talk to Rei Mesa, President and CEO, of Berkshire Hathaway HomeServices Florida Realty, and Keith Bass, CEO, of WCI Communities, as they discuss the benefits of having a parent company, and how it impacts business opportunities, strategy, and sales.
President & CEO,
Berkshire Hathaway HomeServices Florida Realty
CEO, WCI Communities
Maria Patterson: Rei, why is having WCI as a parent an important part of BHHS Florida Realty’s overall value proposition?
Rei Mesa: Having a parent company that is publicly traded and a large homebuilder and master-plan community developer provides our real estate family of services with structure, economies of scale, discipline and access to capital. It also provides us with an opportunity to capture WCI new-home transactions and other core business that benefits our title and mortgage companies, for example. Being part of WCI also positions our sales professionals with access to pre-market, new-home sales opportunities.
MP: Keith, why is having BHHS Florida Realty under the company’s umbrella an important part of WCI’s business model?
Keith Bass: It’s really strategic for us. We can look at a lot of reports on the real estate market and go out and get information, but owning a general brokerage business—especially one that has the depth that BHHS Florida Realty does under Rei’s leadership—gives us an opportunity to always keep an ear to the ground on current trends, but more importantly, know where the trends are headed. Having that knowledge gives us a great competitive advantage.
MP: Please give us an idea of WCI’s presence in the state.
KB: As of March 31, WCI owns or controls over 8,700 home sites in the state of Florida and has just over $200 million in cash to continue to acquire land and grow our business. We are selling in 25 neighborhoods inside of 12 master-planned communities now in Florida and plan to be in over 35 neighborhoods in 15 master-planned communities before the year is out.
MP: Rei, what role are new-home sales currently playing in your residential real estate markets?
RM: Homebuilders are providing much-needed inventory. As I’m sure you are aware, resale inventories in the markets we serve in Florida are extremely tight, with five months or less supply.
MP: Do you anticipate that growth in new homes will play a big role in solving Florida’s inventory shortage?
KB: I know brokers would love to have more inventory, but it’s going to take time for homebuilders to build that back up and put those new houses in place. But demand will continue to grow in Florida and put even more pressure on inventory due to the long-term demographic trends, above-average job growth, and unemployment rates that are going down statewide. We are already seeing increased demand from high-end and second-home buyers, as well as the active-adult purchasers moving into the marketplace.
RM: We anticipate that homebuilders will continue to acquire land and “ramp up” construction, which, when you look at the increase in household formation, we are currently at an all-time low in housing for current and future buyers. I’m one of those REALTORS® who gets very excited every time I see homebuilders moving dirt and starting new communities. After all, this is our future inventory.
MP: Keith, how do you feel about Rei’s recent switch to the Berkshire Hathaway HomeServices brand?
KB: We got very lucky with the timing of being able to associate ourselves with the Berkshire Hathaway brand. That’s the most exciting thing that’s happened on the brand side for decades. For WCI, it not only helps our realty business, but as a public company, that association helps us when we talk to investors who understand the strength of the Berkshire Hathaway name.
MP: How is being part of the BHHS family helping your firm grow both organically and through acquisitions?
RM: Since our announcement of our new brand back in the third quarter of 2013, we have experienced a “quantum leap” organically and through acquisitions. The Berkshire Hathaway brand has opened many opportunities for our enterprise. Since our announcement, we have completed four acquisitions in the markets that we serve, including two in Sarasota, a new market for us. Immediately following one of those acquisitions, we had the top sales professional for one of the leading independent companies join our team.
MP: As the BHHS brand grows across the country, how does this benefit your firm?
RM: The rapid BHHS brand conversion across the country and, in the near future, internationally, provides our firm and our sales professionals with referral and relocation opportunities. As we all know, the great state of Florida is a destination state. There is a desire worldwide among real estate consumers to own a piece of our paradise.