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Renaissance Homes - Oregon luxury home builder

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2008-09-19

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stories: oregonlive.com

OregonLive.com has reported that Rnaissance Homes, one of "Oregon's highest profile home builders" is expecting to file for Chapter 11 bankruptcy protection this week. According to the article:

Renaissance Homes expects to file Chapter 11 bankruptcy next week. Slow sales have made it impossible for the Lake Oswego company to remain current on any of its $85 million in bank loans, company officials said.

Renaissance will be the third prominent metro-area home builder to file Chapter 11 since May. Though some in the housing industry initially insisted that the real estate bust would spare Portland due to in-migration and other factors, it now appears that the shrinking home values and stalled sales that hit much of the rest of the country in 2006 and 2007 were simply late in arriving here. ...

Randy Sebastian, the company's CEO and founder who appears in many of its ads, vowed that Renaissance will survive its brush with insolvency. It has worked out tentative financing arrangements with five banks.

Apparently, falling land values violated certain loan covenants, which precipitated the need to refinance loans early in the summer. Even after refinancing much of this debt, vendors were not being paid, which resulted in liens being filed against the company and pushing the company to seek bankruptcy protection.

At peak, Renaissance had some 280 homes in construction at a time, and their highest sales month ever was February of 2007:

With 48 homes sold and gross sales of $30 million in February,Lake Oswego's Renaissance Homes has announced its best sales month in the history of the 23-year-old company.

February's sales figures are a 15 percent increase in homes sold and a 20 percent increase in dollar volume over February of 2006, a year when the firm sold 301 homes, double its 2005 figure. Renaissance's old record was $23 million in March of 2006.

Renaissance was founded in 1984. Please let us know if you have any information with which we can update this post.

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Comments:

Karl Gates at 23:11 2009-03-08 said:
I was talking with a friend the other day who owns a Renaissance Home. They seemed to be under the impression that they were already coming out of Bankruptcy. That would be great! They build such nice homes. 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.