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John Kavanagh Homes - NC Triad home builder

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2009-03-13

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stories: bizjournals.com

The Business Journal of the Greater Triad Area has reported that North Carolina-based John Kavanagh Co., a 23-year-old home building company, will be closing "by April." Per the article:

John Kavanagh, president of Greensboro-based John Kavanagh Co., confirmed this week that he is closing his 23-year-old home building firm by April, citing the poor housing market as the source of the company's problems. Kavanagh Development, part of John Kavanagh Co., also will close.

...

Earlier this year, "it became obvious," Kavanagh said of the decision to close John Kavanagh Co. "We weren't getting any sales, that's the main thing. The market just totally dried up for us. And for whatever activity there was, there were extremely low offers," on his homes.

The article goes on to note that Kavanagh Homes last broke even in 2007, when it sold some 160 homes. However, the company was only able to sell 90 homes in 2008, which was not enough to sustain the business. The company once closed on as many as 300 house in a year, employing some 50 people. As of the time of the Business Journal writing, only four employees were left closing up shop.

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Comments:

houston at 15:16 2009-03-31 said:
This is really a surprise. First, I didn't realize their volume had fallen to less than 100 and I am equally surprised that he, John K, couldn't weather the storm. I'm guessing there are some additional factors not disclosed. Permalink
houston at 13:59 2009-04-01 said:
Kavanagh is now doing business with Weaver Construction, who previously focused on light commercial construction. Now they are working for the government and building Low income housing. I also know that Kavanagh bought some pretty bad land positions where he tried to build a "move down" product - and it didn't work. Permalink

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Important: This company is on our list of builder operations that have "imploded" (see also ailing lenders). This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid declines in enterprise value; or abnormal "bail-out" by corporate parents or peers in order to continue to operate. The builders may be residential or commercial.