Green Brick Partners Stock

Green Brick Partners, Inc. operates as a diversified homebuilding and land development company. The company acquires and develops land and build homes through its eight brands of builders in five major markets. The company’s core markets are in the high growth U.S. metropolitan areas of Dallas-Fort Worth (DFW) and Austin, Texas, Atlanta, Georgia, as well as the Treasure Coast, Florida area and Colorado Springs, Colorado. The company engages in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, title and mortgage services, marketing and sales and the creation of brand images at its residential neighborhoods and master planned communities.

The company offers higher quality homes with more distinctive designs and floor plans. Many of the company’s communities are located in premium locations and it seeks to enhance homebuyer satisfaction by utilizing high-quality materials, offering a broad range of customization options and building well-crafted homes. The company seeks to maximize value over the long term and operates its business to mitigate risks in the event of a downturn by controlling costs and quickly reacting to regional and local market trends.

The company is a leading lot developer in its markets. As of December 31, 2022, the company owned or controlled approximately 25,500 home sites in high-growth submarkets throughout the DFW, Austin, and Atlanta metropolitan areas and the Treasure Coast, Florida market. The company provides finished lots to its subsidiary builders or option lots from third-party developers for its builders’ homebuilding operations and provides them with construction funding and strategic planning. The company’s Atlanta and Florida builders provide it with their local knowledge and relationships.

Strategy

The key elements of the company’s strategy are to consistent land acquisition program with disciplined underwriting; focus on markets with a favorable growth outlook and strong demand fundamentals; strategically increase market positions in its existing markets; deliver superior designs, broad product ranges and enhanced homebuying experience; disciplined investment strategy combined with the prudent use of leverage; and targeted expansion into adjacent markets.

Marketing and Sales Process

The company sells its homes primarily from models that it has designed and constructed. The company employs new home consultants who are paid salaries, commissions or both to conduct on-site sales of its homes. The company’s in-house sales force typically works from sales offices located in model homes in or near each community. Sales representatives assist potential buyers by providing them with basic floor plans, price information, development and construction timetables, virtual and in-person tours of model homes, and upgrade options. Sales personnel are trained by the company and generally have had prior experience selling new homes in the local market. The company’s personnel, along with subcontracted marketing and design consultants, carefully design the exterior and interior of each home to appeal to the lifestyles of targeted homebuyers. The company also sells homes through independent realtors.

The company offers a preferred lender referral program through its mortgage joint venture to provide lending options to homebuyers in need of financing. The company also offers homeowners a comprehensive warranty on each home.

The company’s marketing strategy has increasingly involved advertising through digital channels including real estate listing sites, paid search, display advertising, social media, and e-mail marketing, all of which drive traffic to its builders’ websites. This has allowed the company to attract more qualified and knowledgeable homebuyers and has helped it reduce its selling, general and administrative expenses as a percentage of home sales revenues. However, the company also continues to advertise through more traditional media on a limited basis, including newspapers, radio advertisements, other local and regional publications, and on billboards where appropriate. The company tailors its marketing strategy and message based on the community being advertised and the customers being targeted.

Financial Services

In addition to independently branded subsidiary homebuilders, the company retains 100% ownership in Green Brick Title and 49% ownership in BHome Mortgage. The company’s financial services help its customers bring their homebuying dreams into reality by providing mortgage and title services, allowing for a one-stop-shop solution. Through BHome Mortgage, the company’s mortgage services buyers can expect personal attention from their first meeting through the closing of their new home. As part of the Green Brick Partners family, Green Brick Title’s unprecedented access to resources beyond those of a traditional title company enables it to always stay one step ahead of the company’s competition and bring buyers unmatched customer service.

Seasonality

The homebuilding industry experiences seasonal fluctuations in quarterly (year ended December 31, 2022) operating results and capital requirements. The company typically experiences the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings, and other market factors. Since it typically has taken five to nine months to construct a new home, the company has historically delivered more homes in the second half of the year as spring and summer home orders are delivered. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occur during the third and fourth quarters. Due to the significant increase in home demand and the more limited supply of both existing homes and speculative home inventory from all builders for the past two years, such seasonal patterns have been far less evident in the company’s business operations.

History

Green Brick Partners, Inc. was incorporated in 2006 under the laws of the state of Delaware.