Market presents opportunity to be aggressive

Being a builder today is like playing a high stakes chess game.

According to Mark Thomas, president of Shodeen Residential of Geneva, it is all about buying land in locations that fit your overall business strategy and then designing communities in which the amenities and price fit your target market.

Despite the economy, Thomas has been taking an aggressive stance with regard to purchasing distressed properties at reduced prices so that he can grow the venerable old family business over the next three to five years, expanding it beyond the Fox Valley area where Shodeen has traditionally done business.

In fact, they are opening "Reston Ponds" in Sycamore in February with move-up single-family homes starting in the $200,000s. Shodeen purchased the 184-lot community from another builder and, because it was already partially developed, they are able to bring it to market very quickly. This works well since its long-term, mega-community, Mill Creek in Geneva, is 90 percent sold.

His background: Thomas, 50, became president of Shodeen Residential in August 2008. Previously he had spent 10 years with Pulte Homes in Chicago, Indianapolis and Dallas; 13 years with PepsiCo and several more years with a large private builder in Atlanta.

A native of Tennessee, Thomas received his bachelor's degree in marketing from the University of Memphis and his MBA from Northwestern University.

Company history: Shodeen Residential was founded in 1961 by Kent Shodeen and it has operated as a semi-custom homebuilder ever since, primarily building in the Fox Valley. Craig Shodeen, son of the founder, served as president until he chose to start his own high-end custom home building firm. Thomas was brought in to replace him.

The details: In a normal, pre-recession year, Shodeen would have sold about 200 homes. Over the past two years they have averaged 80 homes per year with an average selling price of just under $400,000.

Who is your typical buyer?

"We build homes primarily for move-up buyers and empty-nesters. We focus on semi-custom homes for the move-up buyers and, while we are not ruling out age-targeted communities, we have learned that most empty-nesters seem to prefer to live in smaller, maintenance-free ranch homes in mainstream communities where they are not segregated from others."

Shodeen Residential also builds condominiums of up to four stories, which they design to sell but start out renting. Most of these are built in or near Geneva and they seem to appeal equally to empty-nesters and young professionals.

What's the best part about being a builder?

Thomas said he most enjoys the strategic part of the residential construction business involving consumer targeting, seeking appropriate land positions, and then designing communities for the land which differentiate it from the competition.

"Mill Creek in Geneva was the poster child for this. It consists of 45 percent open space, two golf courses, 17 miles of walking trails and much more.

"Our new community in Sycamore, as another example, is designed for move-up buyers with full basements, three-car garage availability, etc. We designed the community to compete with the entry-level homes that other builders are putting in Sycamore.

"In addition, the community is immediately next door to an elementary school. So it looks and feels like an on-site school and we were able to get the school to give us an easement so that we could put a walkway from Reston Ponds directly to the school.

"Our motivation for doing this, of course, was marketing. The school's motivation was convenience for residents, so it works for both us."

Coming up with unique solutions like these is the fun part of the business for Thomas.

What are the biggest changes you've seen in the business?

"In the past, consumers were looking for as much house as they could afford. Today they are being more practical. They are buying houses that meet their needs, are easier to take care of and are in school districts and locations they prefer.

"The last three years have been wake-up calls for a lot of people. So they are being much more practical with regard to size, price and needs."

Builders have also learned a lesson, Thomas admitted.

"Those who were careless with land acquisitions and management of their capital are the ones who have been at risk."

What changes have you made at Shodeen?

"I am putting lots of emphasis on our sales organization and our product designs and offerings. I am also trying to bring more consistency to our marketing and brandage."

What are your future plans?

"In five years, I see Shodeen Residential as one of the top five builders in the Chicago area, doing 600 to 800 home closings a year.

"We are currently expanding our scope to include the entire Chicago area and even the Lake Geneva, Wis., area. We already have some commercial properties in DeKalb and have several hotels, banquet halls and apartments around the area that we own and manage.

"We also have three large parcels of land that we own in Pingree Grove, Elburn and Lake Geneva that are ripe for large, master-planned communities."

Describe your dream house.

"I would some day like to build a large ranch home with an extensive outdoor deck and lots of windows on the oceanfront in Cabo San Lucas."

What are your favorite amenities?

"I like the large great room/kitchen/nook areas and volume ceilings in any room of the house."