What is measured development and how can it lead to the
pre-sale of 100% of your lots?
In the February of 2012, a second phase of Riverhills, consisting of 57 lots, was introduced to the Fort Worth market. When the first potential customers stepped on site, there were no streets, no utilities, no landscaping- just a site plan and a lot of construction equipment moving dirt.
Yet all 57 lots were completely pre-sold within a month. This success was the result of a measured development approach that allowed us to introduce a new product to Riverhills, test the waters of the market and mitigate initial risk through a segmented construction approach.
After delivering the first phase of Riverhills amidst the housing market crash of 2008, Trinity Works was hesitant to move too quickly into turning over another completed phase of lots into the market, especially with lots still available in Phase One. However, our sales and customer relations team seemed to be overwhelmed with requests for a slightly different lot and price offering than was currently available in the current phase.
This trend led us to revisit the site plan for Phase Two and design a layout that would meet the demand for finished homes in the $500-800,000 range. Trinity Works felt this was the next step in providing a diversified product mix paramount to the continued success of the Riverhills community- allowing homeowners to remain within the community as they progressed through the various phases of life. The lot layout and design of the phase directly corresponded to the needs and desires of the target demographic of both young families and empty nesters by tightening up on lot size and providing ample open space and community gathering areas.
Although we felt confident in regard to layout and lot offering, we took an unorthodox approach to the execution and development of the entire phase. In order to limit capital exposure and the inherent risk of residential development, we opted to only move forward with civil construction plans and mass grading of the site while simultaneously beginning to pre-sell lots.
By taking this approach, we were able to feel out the appetite of the local market but maintained the ability to step back and wait if the market dictated such without incurring any sunk costs.
With the completion of lot grading, potential customers were able to tour the site and visualize a home upon their lot, making the pre-sell process easier. The response from the market was overwhelmingly positive and all 57 lots had reservation agreements within three weeks of putting them on the market. Because of this, the rest of the construction to deliver a completed phase was initiated and delivered to the new homeowners in the fall of the same year.
Listening to customer feedback and implementing a segmented development approach in order to mitigate risk allowed Trinity Works to deliver a wonderful success story for the Edwards Ranch development.