Atlanta Business Chronicle From the March 28, 2005 print edition Lisa R. Schoolcraft - Staff Writer Fathers of suburbia sire community Levittown creators build active adult neighborhood in Canton The home-building company that created suburbia is entering the metro Atlanta market. Levitt and Sons LLC, a wholly owned subsidiary of Fort Lauderdale, Fla.-based Levitt Corp. (NYSE: LEV), is planning a 766-home community in Canton aimed at "active adults," 55 years and older. Started in 1929, Levitt and Sons is credited with building the first planned suburban community in the country -- Levittown -- in 1949 on Long Island, N.Y., a 17,400-home neighborhood. It also built Levittowns in New Jersey and Pennsylvania. The company also is credited with starting the process of production building for single-family homes. One of the company's original founders, William Levitt, is often called the "Father of Suburbia." Construction on Seasons at Laurel Canyon, a gated, age-restricted community off Reinhardt College Parkway, is expected to start in April, with homes ranging from the low $200,000s to the upper $300,000s, said Dan Grosswald, president of Levitt and Sons Atlanta region. "We're planning three to four communities around the city," he said. Levitt and Sons has land under contract in Gainesville and Peachtree City as well and plans communities of 750 to 800 homes there. The company also has property under contract in Savannah and Bluffton, S.C., near Hilton Head Island. Levitt and Sons enters the Atlanta market with its active adult community "that we've been perfecting in Florida," Grosswald said. "Demographically speaking, Atlanta is a young market, but Levitt and Sons' market research found over the next 10 years, 50,000 people a year will turn 55." Metro Atlanta's median age is 33.5, according to data from the U.S. Census Bureau, but 607,440 residents are aged 45 to 54. Levitt and Sons' active adult communities cater to residents who want smaller homes, but still want to stay close to family, church and friends following retirement, he said. Once Levitt and Sons establishes itself with its active adult communities, "we'll fill in with other types of communities," Grosswald said. Levitt and Sons has built condominium projects in Boca Raton, Fla., and townhouse projects in Orlando, Fla., for example. "This [active adult product] is the anchor and starting point to get a foothold in a market," Grosswald said. "We don't want to go head-to-head with Pulte [Homes Inc.] or Ryland [Group] right now." Besides Atlanta, Levitt and Sons is also entering the Nashville, Tenn., and Jacksonville, Fla., markets this year, according to its annual report, filed March 16 with the U.S. Securities and Exchange Commission. "We have not previously operated in these markets and may not recognize any revenues from these operations during the next 12 months or longer," the company stated in its report. For the year 2004, Levitt reported net income of $57.1 million, compared with $26.8 million in 2003, a 113.1 percent increase. Levitt also owns part of Bluegreen Corp. (NYSE: BXG), which is building the golf course community Traditions of Braselton on 1,142 acres in Braselton. Chuck Fuhr, president of Ryland Homes' Atlanta division, part of The Ryland Group (NYSE: RYL), is not surprised Levitt and Sons has entered the market. "We're the largest or the second-largest [home-building] market, depending on where Phoenix lands," he said. "Why shouldn't you be here? I don't know why all the publicly- held home builders aren't here." Entering the market with its active adult community is a smart move for Levitt and Sons, Fuhr said. "The first-time home-buyer market isn't played out, but more and more of our customers are asking for ranch-style or master [bedrooms] down [on the main floor], which is what their active adult product offers," he said. "We have our own age-targeted community in Madison." Still, Levitt and Sons will have a balancing act ahead of them as they enter the market, said Roger Tutterow, director of the Econometric Center at Coles College of Business at Kennesaw State University. "2005 should be a good year for home builders, but I think people are conceding it won't be as good as 2004," he said. "Inventory is coming up." In 2004, home builders pulled 47,483 single-family home permits in the 20-county metro area, up from 42,599 or 11 percent, in 2003, according to research by the Greater Atlanta Home Builders Association. "The entry-level market has been so strong for so long, and it might be in line for a little rebalancing this year," Tutterow said. "One of the things that may be in their favor is the well-designed communities that have amenities, and some type of identity. Even if market softens, that product with reasonably attractive price points will do OK." Reach Schoolcraft at firstname.lastname@example.org.
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