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| John
Eilermann, Scott Kerns, and Rick Sullivan look over blueprints
for a new home in O’Fallon Mo. |
McBRIDE & SON
HOMES
BUILDING ON SUCCESS
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By
Laurie Burstein
If there is a slowdown in the housing market, Rick Sullivan
and John Eilermann of McBride & Son Companies aren’t overly
concerned. As chairman and CEO respectively of the region’s
largest homebuilder, Sullivan and Eilermann say they are ready
for whatever the market brings.
Eilermann has even adopted a mantra for the organization: “We
have chosen not to participate in any downturn.”
The numbers for McBride & Son Companies certainly support their
enthusiasm with sales up by 20 percent and plans to expand into
more markets. This year marks the company’s 60th year in business,
and McBride’s homebuilding companies are on track to build 2,100
homes in five different cities, with revenues of $600 million.
In 2005, a new partnership was announced, with Sullivan turning
over the day-to-day reigns of the organization to Eilermann.
Under the new partnership, Sullivan will take a less active
role at McBride and will focus on more civic and charitable
endeavors. As CEO, Eilermann will be responsible for strategic
planning and implementation.
Sullivan and Eilermann have a have had a strong relationship
and friendship at McBride for the past 20 years. Sitting in
their headquarters in the booming Chesterfield Valley, they
remember how their offices were under water in the flood of
1993. They chose to stay and rebuild.
They agree that many factors have contributed to the success
of the company.
“Our strategy has been to sell great homes in great locations
at a great value,” Eilermann explains.
Sullivan adds, “We like to create neighborhoods and communities,
not just build houses.”
Its employee-owned status, a careful strategy of steady growth
through expansion into new markets, is at the forefront. But
at its core, it’s the way McBride & Son Companies manages each
division that sets it apart. Each section of the business, down
to the community level, is treated like a separate, entrepreneurial
company.
Today, McBride & Son Companies is divided into three core businesses:
McBride Homes, Vantage Homes and Builders Bloc.
McBride Homes is the largest division, with offices located
in St. Louis, St. Charles, Louisville, Kansas City and Atlanta;
McBride has grown into a top 40 builder in the U.S. and is ranked
in the top 20 privately-held builders in the nation.
The company builds a diverse range of homes priced from $99,000
to $800,000. McBride builds everything from townhomes, condos,
cottage homes, row homes, and single-family homes. The Land
Development arm of the company builds master-planned communities,
including the company’s largest project to date WingHaven in
O’Fallon, Mo.
McBride’s Vantage Homes is a residential builder and developer
of new home communities. Based in O’Fallon, Mo., this division
has built more than 2,500 homes throughout St. Charles County,
Southwestern Illinois and Kansas City since 1993.
Builders Bloc Contracting was founded in 1946 and provides carpentry,
concrete foundations, dry wall and construction work not only
for homes built by McBride Homes and Vantage Homes, but also
for other builders as well. This division employs over 1,200
craftsmen in St. Louis, Chicago, Kansas City and Southwestern
Illinois.
Regional
expansion has been a big factor in the growth of the company
Sullivan says. In 1987, McBride was the first St. Louis-based
homebuilder to start building in a big way in Metro East.
“We really broke into Metro East before other St. Louis based
builders,” says Sullivan. “Today it’s a huge growth area and
we are building from Waterloo to Edwardsville, with each community
being very distinct.” Vantage Homes’ is introducing nine new
neighborhoods in Fairview Heights, Ill., with plans to enter
Troy and Maryville, Ill. in 2007.
The company also builds in markets outside of the St. Louis
region, with divisions in Louisville, Kansas City and Atlanta.
McBride Homes is the 3rd largest homebuilder in both markets
for Louisville and Kansas City.
In 1988, McBride & Son Companies’ stock ownership plan was implemented
and the company became fully-owned by its employees. That’s
when things really began to take off.
“Being an employee-owned homebuilding company is one of the
biggest keys to our success, and really sets us apart, “Sullivan
says.
Eilermann concurs, “It makes a huge difference. Customers know
they are meeting with employee owners. Their success is our
success.” Eilermann adds that the company has an entrepreneurial
culture where each company is fairly autonomous and managers
are responsible for results of their individual division of
the company.
At age 42, Eilermann is one of the youngest CEOs in the homebuilding
industry. He started with McBride as an estimator fresh out
of Missouri State University—or as Eilermann calls it “the Harvard
of the Midwest”—and worked his way up to assistant project manager,
general manager and vice president. In 1997, he was named president
of McBride Homes.
The two are involved in numerous civic, professional and charitable
organizations, and have both served as past presidents of the
Homebuilders Association of Greater St. Louis. Sullivan serves
on the board for Habitat for Humanity, the RCGA, and Lindenwood
University, and is also very involved in a construction company
incubator and a retail company incubator serving minority business.
Eilermann is also active with a number of charities, including
Cardinal Glennon and St. Patrick Center.
Sullivan, 54, grew up in Belleville and says he likes the Midwest
as a place for doing business. “St. Louis has always been a
steady, reliable environment. There are no dramatic ups and
downs. I have seen an increase in job growth recently, and that’s
very positive for St. Louis.“
“Looking ahead in our industry, builders have to continue to
work together on a number of issues. Part of our challenge is
to build affordable housing,” Sullivan says.
Eilermann remarks that homebuilders in the region get along
well and often work together on projects. He explains that when
WingHaven was being built in O’Fallon, McBride was the lead
residential developer and sold lots to other builders. Builder’s
Bloc did sub-contracting work for several other builders on
the project.
“Although we are competitors, we all worked as a team on this
and other projects,” Eilermann explained. “I think this is unique
to St. Louis. In other markets, homebuilders don’t always work
together.”
As far as homebuilding trends in the region, the infill/teardown
trend still continues to be big Sullivan says. “Demand for infill
is as strong as it’s ever been. People like the convenience.”
One of McBride’s current infill projects is in Brentwood where
11 neo-traditional homes are being built. Eilermann explains,
“Another homebuilding trend is the neo-traditional home. These
homes are bringing back a turn of the century style of architecture
with such features as front porches, detached garages, and rear-alley
access. This style is really in demand.”
And speaking of demand, Eilermann says there is a phenomenon
known as the “camp out.”
“We have pent-up demand for many of our developments, and it’s
not unusual for people to show-up on Thursday to get in line
for lots going on sale on Saturday,” Eilermann says. “We love
to make it fun and provide pizza, soda and TV for our customers.
We have even given customers a gift certificate for a night
at the Ritz Carlton,” he says.
Sullivan points to Botanical Heights as another landmark project
for McBride & Son which marked the company’s first project in
the City of St. Louis in 2004. It was so successful that 30
people camped out and 57 homes were sold the first day.
“We literally recreated a neighborhood covering six city blocks
at 39th and McRee near the Botanical Garden. Homes ranged from
row houses priced at $140,000 to single family homes at $400,000.
People told us that the homes wouldn’t sell very fast at these
prices in this area, but in fact, these homes sold very quickly,”
he says.
What’s in store for the future of McBride & Son Companies?
Eilermann says that each of the three companies has a 10-year
business plan.
“We will continue to plan for steady growth led by individual
teams of managers for each company,” Eilermann says.
He continued, “The Company’s two homes divisions anticipate
building 6,600 homes annually by the year 2014. Builder’s Bloc
hopes to be in seven markets in that period.”
Sullivan says the entrepreneurial culture and sense of ownership
among all the employees have made the company very responsive
to challenges and taking risks.
“A big part of our culture is responding to a challenge, especially
when we are told that something can’t be done,” Sullivan says.
“For example, we were told it didn’t make sense to have our
corporate headquarters in Gumbo Flats in late 1980s, which is
now the thriving Chesterfield Valley. We were also told that
new homes in North Country wouldn’t sell at higher prices and
not to build a master-planned community in West St. Charles
County, now WingHaven. In each case, these decisions proved
to be groundbreaking and led to our success.”
McBride
& Son Enterprises
fast facts: |
20th largest privately-held homebuilder in the U.S.
Largest homebuilder in Missouri
#1 market share in St. Louis market
#3 market share in Kansas City market
#3 market share in Louisville market
Largest residential land developer in Missouri
Largest residential employer of carpenters in Missouri
Largest residential foundation company
Industry leader in safety
McBride Homes markets: Louisville, Atlanta, St. Louis, St.
Charles, Kansas City
Builder Bloc markets: St. Louis, Chicago, Kansas City, Southwestern
Illinois, St. Charles
Vantage Homes markets: St. Charles, Southwestern Illinois,
Kansas City
Total McBride & Son Companies in 2006: 2100 homes with revenues
of $600 million |
Q&A
with RICK SULLIVAN, Chairman, McBride & Son Enterprises |
What
made you want to build your offices in Chesterfield Valley
in the mid-1980s?
We moved our corporate headquarters to the Chesterfield
Valley in 1987 because it was centrally located and it had
great access to all areas of the St. Louis region. It turned
out we were right.
Why did you stay after the flood in 1993?
It made good economic sense for us to rebuild. After the
flood, we had temporary offices set up within two days and
we were back in our main office in eight months. The same
reasons that brought us to this location, kept us here.
Which McBride projects are you proud of, and why?
Two examples are an older development that I worked on early
in my career and a more recent one.
Winghaven in O’Fallon was a landmark project for us in 1999.
We built a small city in less than five years, and it is
the largest master-planned community in the region. We sold
28 homes in the first day—a record at the time.
Another project I am very proud of is the Riverwood Neighborhood
in North County. This project was developed in the late
1970s and early 1980s. I was told that no one would pay
$100,000 for new homes in North County, but the residents
did. This neighborhood is still thriving and it’s clear
that the homeowners there are still very proud of their
community. Recently homes in the neighborhood sold for $300,000
and up.
What do you most want people to know about McBride &
Son?
It is important that people know we are an employee-owned
company, which gives us a distinct advantage. Our customers
know they are always working with a concerned owner of the
company.
We also encourage our employees to be active in the community
and numerous professional groups and charities. For example,
we have 35 people who volunteer for Mentor St. Louis, and
we have also had six McBride employees serve as president
of the Home Builders Association here.
Our third strength is that we operate like a series of small,
entrepreneurial companies despite our size and growth. The
manager of each neighborhood has full responsibility for
that community’s sales, budgets, quality of construction
and customer satisfaction and is compensated based on the
bottom line for that community or business.
Why is a strong downtown important for the rest of the
region to flourish?
Downtown is really how we are judged on a national level.
Everyone needs to contribute to the success of downtown.
If downtown is successful, then the entire region will be
successful. |
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