Warmington Group Strives To Do The Right Thing For Partners, Lenders and Homebuyers At All Times.
By Allen Dorich
With its family ownership, The Warmington Group enjoys many advantages over other homebuilders, President and CEO Jim Warmington Jr. says. Along with having the ability to make decisions quickly,“The family’s reputation has also allowed us to get access to many sellers and opportunities,” he says.
The Costa Mesa, Calif.-based firm has a history in construction going back more than 85 years, Warmington says. The Warmington group of companies began as a custom homebuilder in Los Angeles and constructed estate homes for many celebrities, including actors Claudette Colbert, Henry Fonda, Tyrone Power and Douglas Fairbanks Jr.
“The family’s reputation has also allowed us to get access to many sellers and opportunities.”
By the 1930s, that first Warmington company had earned a reputation as a “builder to the stars” and had constructed homes in Beverly Hills, Bel Air and Westwood, Calif. Since then, the companies have built more than 40,000 single- and multifamily homes in California and Nevada.
In addition, The Warmington Group has many years of experience in both building and managing apartments. “This broad knowledge has proved invaluable in obtaining underwriting and designing the site and architecture for each new deal,” Warmington says.
Looking Out for Others
Jim Warmington Jr. began working for the group’s Southern California division in 1989 while he attended classes at Stanford University. After graduating four years later, he began working full-time at the company as a superintendent.
Warmington says one of the key factors in the group’s success is its dedication to strong ethics and doing the right thing.
“We strive to [build] communities which provide good financial returns for ourselves and our financial partners, while carefully accounting for the risks in today’s market,“ he says. “Plus, we never forget how important the home and community are to those that live there.”
For instance, “In 2005, we started slowing our land purchases as the market was clearly slowing,” he recalls.
“We felt that it was not in our interest, nor our partners and lenders’, to be overly aggressive on purchases at that time, even though we would have benefited financially from the extra work,” he explains. “During the subsequent years of the downturn, we built out thousands of homes and focused exceedingly hard on getting our banks paid off and our equity partners out as clean as possible, even though our company would lose money.”
The Warmington Group structured deals so that its banks got out sooner and whole, even if the group itself suffered additional losses. “Because of our focus of looking out for the best interests of our partners and lenders, we have been able to continue getting financing from the same groups, in addition to new groups who know our reputation,” he says.
Additionally, experience across for-rent and other types of for-sale products and price ranges allowed the firm to take advantage of other opportunities. “Early on in the downturn, we began working as a consultant to a number of banking partners to help them underwrite and manage their REO/distressed residential properties,” he says.
Although it was not very profitable, “It helped us retain some great team members and cover overhead,” Warmington reports. “Based on our relationships with our equity partners, we ended up helping to fee-build over 600 homes in five projects in California and Las Vegas.”
On the Outside
The Warmington Group has begun to acquire properties that are outside of what public builders are interested in, Warmington says. In recent years, the group has seen a rush of public builder activity in finished lot properties.
But the Warmington Group has focused on deals that the other firms overlooked, such as projects with less than 40 units or properties with remaining entitlement or other issues. “We also have focused on larger entitlement and land development projects, since publics are focused on mostly finished lots only,” Warmington says.
This year, Warmington says the group will use several strategies to cope with resale and foreclosure issues. “This includes buying properties where job growth is occurring and avoiding any locations where there is likely to be the risk of oversupply of houses, either from distressed resales or new home projects,” he says.
Warmington reports the strategies are working so far. “Today, the group is seeking revenue-generating projects that fall within its entitlement, land development and home-building expertise and is aggressively looking for new acquisitions that allow it to get back into its primary business of entitling and developing land, and building homes to create beautiful residential communities,” he says.
The Warmington Group also has sought more apartment opportunities. “Our affiliate, Warmington Properties Inc., has been managing 1,100 apartment units in California for about 40 years and nearly 1,000 in Nevada, as well as a portfolio of properties totaling in excess of $600 million that includes office, retail and industrial projects in California, Nevada and Arizona,” Warmington says.
The company is preparing to start construction on a 24-unit student housing apartment complex near San Diego State University, as well as an entitlement process on a apartment 500-unit complex in Temecula, Calif. “This is in addition to a 320-unit apartment project in [Las Vegas] that is currently being graded, with construction set to start in May/June this year,” he says.
“Also integral to our business plan, the group has focused on providing excellent service to its existing fee management clients and is seeking new fee management opportunities,” Warmington says. “These fee management deals allow us to retain employees and cover overhead.”
For the future, Warmington says he wants the group to take advantage of more opportunities that come as the market improves and grow its focus on multifamily. “The group has established and [maintained] successful relationships with its lenders, has protected its new capital and retained an excellent team to manage any opportunity,” he says.
“You don’t often hear of a “Grand Closeout” celebration, but in this case, we felt it was worth highlighting the sales success of these three neighborhoods in big way….”
Just a few months ago, Warmington was celebrating the grand opening of its newest San Diego area neighborhood, Seaside Highlands in Encinitas. At that time, Edgehill Terrace in Vista had just recently been introduced to the market and sales at Poinsettia Ridge in Carlsbad were underway, offering area new home buyers a tremendous selection of plans, price points and choice of locations.
Today, Warmington is reporting that this selection of homes is 75% sold out and is announcing the “Grand Close-out” of all three communities. According to Mike Williams, Vice President of Sales and Marketing for Warmington Residential California, strong interest and a quick sales pace has now led to the near sell-out of these popular new home neighborhoods.
The appeal of Seaside Highlands, Edgehill Terrace and Poinsettia Ridge can be traced to the popularity of their respective locations and some unique advantages offered by each.
As Warmington enters the close-out phase at all three neighborhoods, it is showcasing some very special Move In Ready homes that can be fully ready for occupancy in 30 days or less.
“Don’t delay,” advised Williams. “If you are in the market for a new home, you don’t want to miss the chance to purchase within one of these three very special neighborhoods. There is still a good selection of plans but a limited number of homes to choose from so shoppers must act quickly!”
You’re probably thinking, Well of course, I should hope a brand new home has brand new appliances!
In response, we’d like to say yes, they do — lovely Bosch® appliance including a range, dishwasher and microwave in fact. But, for buyers in Phase One at Celadon in San Jose, Warmington is offering an additional FREE appliance package that includes a Bosch® refrigerator, washer and dryer too!
Imagine moving into your brand new home and filling it full of brand new and sophisticated Bosch® appliances without having to make any special (and costly!) trips to Best Buy. Say goodbye to the delivery guy and hello to…. FREE appliances that will be ready and waiting for you the day you move in.* Learn more about the modern townhomes at Celadon in San Jose here.
*Limited time offer. See sales representative for full details. 2_28_2012
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