Pacific Northwest builder exits Chapter 11
A U.S. federal court in Vancouver, Wash., has approved the bankruptcy exit plan for Pacific Lifestyle Homes, one of the largest home builders in the Pacific Northwest.
This company voluntarily entered Chapter 11 protection in October 2008. At the time, the company was active in 10 communities.
“While the need for reorganization stemmed from the company’s debt structure, Pacific Lifestyle Homes has adapted business practices over the last two years to have success in a depressed new home market,” according to president and CEO Kevin Wann. “We have made adjustments to the standard size of our floor plans, and have created value by adding more included features in our homes,” he added.
Other factors credited to this rebound include the ability to secure construction financing from the company’s lenders to continue building, and the decision to sell its existing inventory at bargain prices.
“We executed operationally by selling over 160 homes during the process.” Wann said. Pacific Lifestyle Homes was very quick to strike. As part of its original reorganization filing, the company also launched a massive sale of all completed homes at reduced prices. The company felt it was better to move the homes off the books, then to hold out for normal sale margins. “We were aggressive and we acted swiftly. In retrospect, both were very good decisions,” Wann said.
Founded in 1996, Pacific Lifestyle has built more than 2,000 homes in the greater Portland area. The company is currently building five neighborhoods in Vancouver and Washougal, Wash., as well as Salem and Clackamas, Ore. Another initiative will be to secure more lots for future development. Wann said he and his team are already sifting through proposals from financial institutions and developers looking to unload distressed lot inventory.
“I’m excited about the opportunities of the current market in terms of lot availability and affordability. I think we can provide a solution for banks and developers who need to sell inventory,” he said.