Joint Venture to Help McBride Build 1,000 Homes a Year

By on April 10, 2018

From St. Louis Post-Dispatch:  A shrinking supply of newly built single-family homes — both nationwide and in St. Louis — and demand for homes has spurred two St. Louis companies to form a joint venture to develop homesites and offer construction management services for smaller homebuilders.

McBride Homes, the region’s largest homebuilder, and J.H. Berra Construction Co., a major St. Louis-area development firm, have partnered to form a new independent company called Elite Development Services.

McBride built 854 houses in 2017, up from 742 in 2016. Revenue for the Chesterfield-based company increased from $206 million to $257 million during that same time period.

McBride CEO and Chairman John Eilermann said Elite, which would sell its homesites to McBride once they are developed, should help McBride increase new home starts to approximately 1,000 per year.

“This will certainly make us a bigger operation,” Eilermann said. “It will help us grow and give us more opportunity to acquire homesites.”

Site acquisition and land development costs can account for approximately half of a single-family home’s construction budget, said Ken Kruse, president of Payne Family Homes. As St. Louis’ second-largest homebuilder, Payne closed on 263 homes in 2017, up from 232 in 2016, and develops most of its lots in-house.

“It’s a major capital expenditure,” he said. “It’s getting the ground under contract, closing the deal, getting the property entitled and zoned.”

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