KB Here for Long Haul, Says New Chief
REAL ESTATE BY CHRISTIE SMYTHE
Like all builders, KB Home has struggled in the aftermath of the real estate slowdown and sluggish economy.
Revenue for the first half of the year fell to just about half as much as the first six months of 2007, according to financial statements. In Tucson, the builder suffered a setback when a development partner in Marana’s Saguaro Springs backed out of the project last year, effectively putting the 2,462-home development on hold.
Elsewhere in the country, KB Home is scaling back operations. But the builder has no plans to leave Tucson, said Mark Rodocker, KB Home’s new division president for Tucson. Rodocker is taking over for former Division President John Bremond, who will retire.
Still in the process of relocating from the Midwest, Rodocker answered some questions from the Star about KB Home’s strategy for the future here.
Q: How did you come into your current position in Tucson?
A: I had joined KB six years ago and most recently was the division president in Illinois, Wisconsin and Indiana. We have closed down those operations. We’re still in the process of closing down the operations in those markets; however, we’re still maintaining customer-service support.
Q: In how many communities is KB Home still active in Tucson?
A: We’re basically at eight . . . (there will be) six by the closeout of the year.
Q: How well are things going in Tucson and Arizona compared with KB’s operations elsewhere?
A: I think Arizona, like many other states, has been challenged. But at the same time, we still feel real bullish about Tucson as well as Phoenix for the long term. It lends itself well here in Arizona and specifically in Tucson toward our target market of first- time home buyers.
Q: Is there anything new KB Home is focusing on here as a strategy, such as first-time buyers or “green” home features?
A: First off with KB, we’re focusing our strategy (on) the first- time home buyer. That’s where our bread and butter has always been. . . . We’ve been actively looking at our floor plans and sizes that we offer. . . . Right now, we’re focusing on producing smaller floor plans, which will help drive affordability. . . . When you start talking about green, the benefit that we really have is a lot of our homes are already environmentally friendly. And we offer (buyers) a lot of options in our KB Home studio (a new-home showroom) to help them with their concerns as well.
Q: Is there a specific price range you’re trying to hit for first- time buyers?
A: We look at the individual submarkets and really look at the median prices and try to understand the affordability of that individual marketplace. Today, (in Tucson) we offer home prices starting from the high $120,000s to the mid-$200,000s.
Q: We’ve heard rumors about KB Home or other builders moving out of Tucson. Is KB Home here for the long term?
A: KB does plan to stay here for the long term. It’s a big move, obviously, for me and my family to come down here. I don’t think I would be moving unless we were staying here and maintaining our foothold. Tucson has been very successful for KB Home over the years. Traditionally, it’s represented one of the highest market shares in the country for KB Home.
* Christie Smythe covers real estate for the Star and writes a weekly column on the industry. Send news about commercial and residential real estate to her at Business, Arizona Daily Star, P.O. Box 26807, Tucson, AZ 85726; fax to 573-4144; or e-mail to csmythe@azstarnet.com.
Originally published by JENNIFER STERBA, ARIZONA DAILY STAR.
(c) 2008 Arizona Daily Star. Provided by ProQuest LLC. All rights Reserved.