MUSIC CITY DREAMS
Late last year, a new contender entered the Nashville, Tenn., new-home market. It wasn’t a large public or an Asian conglomerate–backed powerhouse;
instead, it was a smaller private builder from South Carolina. While Charleston, S.C.–based Crescent Homes isn’t a national name,
in less than a decade it has become the top private in its hometown, according to BUILDER’s 2016 Local Leaders data. The company was founded in the depth of
the recession by CEO and owner Ted Terry, a fifth-generation home builder. Prior to going out on his own and establishing Crescent Homes in 2009, Terry was the
regional president for Charleston-based Brentwood Homes. If a builder had dry powder and wanted lots, 2009 was not a bad time to get into
the arena. From those humble beginnings, Terry built a private company that not only is a power player in its home market, but also is able to compete in one of the
toughest markets in the country. “I took advantage of opportunities in the market,” he says. “The downturn did wipe out some of the private players.”
Crescent’s goal from the beginning was to include features that other builders viewed as upgrades and offer buyers the flexibility to personalize floor plans and
features to suit their lifestyle.
In Charleston, Crescent is in the move-up category. Its average price in 2016 was $300,000, and it hopes to see that increase to $330,000 in 2017. It currently has 14 actively selling communities in the Charleston area, not including its custom program, Flex. In 2015, Crescent closed 250 homes, resulting in a 6.9% market share. That placed it at No. 6 in the Charleston market overall and No. 1 among private builders, according to 2016 Local Leaders data. In
2016, Crescent closed 243 homes, or a little more than 6% of the new-home market in Charleston, according to the builder. That gave it the fourth-most closings in the Charleston MSA in 2016, with an average sales price of $303,516. Expansion Plans With his success in Charleston, Terry, who majored in finance and minored in real estate at the University of Georgia and then earned a master’s degree in real estate from Cornell University, began thinking about expansion. “In Charleston, with the land availability dwindling and prices
on the perpetual uprise, expansion was not a question of if, it was when,” Terry says.
Terry studied myriad locales before deciding on Greenville, SC., and Nashville. “While analyzing
these initial surrounding markets, we determined despite their close proximity (which may have provided us with an easier market entrance), they lacked stability, economic growth, and employment opportunities,” he says. “To see a return on investment and to create a sustainable and long-term division, we needed to expand to markets that mirrored or shared some of the driving growth factors of Charleston.” From a distance, Nashville—where job growth from 2010 to 2015 exceeded 20%, according to Forbes—made sense. “The unemployment rate is one of the lowest in the country for a large metropolitan city,” says Eugene James, the Atlanta and Nashville regional director for Metrostudy, a Hanley Wood company. Terry saw an opportunity to take a semicustom home buying experience to the market.
“The same reasons people are visiting and relocating to Charleston can be said for Nashville,
yet it is on a much larger scale in terms of size and density,” he says. “Employment opportunity
and growth, a strong higher-education presence, and tourism all are factors as to why
we felt Nashville would serve as a wise location for expansion efforts. The Nashville market is
not dominated by national home builders, which was a driving factor why we felt that we
could expand to the area and find success.” Terry wasn’t alone in eyeing Nashville,
according to James. The regional director says he has fielded inquiries from many builders
seeking to break into that market. But establishing a foothold there is not easy, James
adds, which is why many of those who contacted him never started homes there. “Nashville hasthe most-constrained lot supply in the country,” he says. “There are very few buildable lots
on the ground.” That lot-inventory hurdle didn’t deter Terry, who says Crescent’s track record in Charleston helped him secure land. “We were able to move into the Nashville market by using the same strategy as we do in Charleston by being opportunistic and being able to act swiftly when needed and focus on relationship building.” Crescent has approximately 750 lots under
control in the market and is building homes with an average price point of $450,000.
“With any new endeavor, there is always a learning curve,” Terry says. “Once expansion
had begun, our first priority was to learn the market and develop our positioning strategy.
Going into this expansion we knew we had to come into the experience being pliant and open
minded, and that we had to listen and learn from those who are experts in their respected
fields and industries in the area.”
Now that Terry has built a company that has a presence in three markets, strategy is a bit more
complicated than it was in the early days. Crescent currently has positions in three
neighborhoods in Greenville, S.C., about a three-hour drive from Charleston, but there is
more work ahead. “Our primary goal in 2017 in regards to Greenville is to establish a solid
land position,” Terry says. “We will use this time to fine tune our position, operations, and
construction to ensure we are creating a division that will allow for long-term growth and
profitability.” In the hyper-competitive Nashville market, Terry is keenly focused on expansion, concentrating on year-over-year growth and solidifying Crescent’s position as a key player.
In Charleston, as in other markets, Terry wants to increase market share, and he plans
to cross the 400-homes-sold threshold. He also wants to cultivate Crescent’s company culture;
grow the corporate giving program; and add new house plans and product lines. While those goals will keep any executive team busy, Terry’s main objective remains the same: We want to “stay true to our vision of building quality homes that people want to buy in locations where people Crescent established a foothold in the Charleston area by offering semi-custom homes. want to live,” he says.