Home building business heats up
$7 billion investment fund joins the fray with stake in Troy firm
By R.J. King / The Detroit News

TROY – Independent home builders will find it more difficult to compete for land, contractors and employees as a $7 billion investment fund enters the Metro Detroit market, real estate experts say.
Institutional Housing Partners Inc., a California-based private equity fund, will announce today that it has acquired an interest in Tadian Homes in Troy.
While terms of the deal were not disclosed, the partnership said it will double Tadian Homes' revenues to $80 million this year.

" The deal will allow us to compete more aggressively for land acquisition," said Gary Tadian, founder and CEO of Tadian Homes. Last year, the company built 161 homes in Metro Detroit and generated more than $40 million in revenues.

Buyers of new homes may be the biggest winners from the partnership, said Gilbert "Buzz" Silverman, chairman and CEO of Silverman Cos., a real estate company in Bingham Farms that has developed more than 25,000 homes and apartments since 1919.

" Any time a national home builder comes into a regional market, consumers win due to more competition and more choices," said Silverman.

In 1999, Silverman sold his home building division in Farmington Hills to Toll Brothers Inc. in Huntington Valley, Pa. Toll Brothers was followed a year later by Dallas-based Centex Homes, which purchased Selective Homes in Farmington Hills.

Along with Bloomfield Hills-based Pulte Homes Inc., the nation's largest home builder, Metro Detroit now has three of the nation's top five home builders. With ready access to capital markets, Silverman said Pulte, Centex and Toll have been able to outbid independent builders for desirable land.

The national builders also compete heavily for local contractors and employees, he added.
Dan MacLeish, president of MacLeish Building Inc. in Troy, said he has noticed that the price for prime residential property has been rising steadily in recent years.

" In some cases, you can't compete for land against the national players because they can outbid you," MacLeish said.

http://www.detnews.com/2003/business/0306/08/b01-186272.htm