LAKEWOOD RANCH - Luxury home builder John Cannon Homes has taken to the other end of the spectrum by creating a small division to complete and sell homes that are unfinished because the buyers or builders walked away from the work site.
WHO: Lakewood Ranch-based John Cannon Homes
WHAT: Cannon has started a small division to complete and sell homes that are unfinished because buyers or builders walked away from them.
WHY: Founder John Cannon is looking for other revenue streams as the building industry continues struggling with the sluggish housing market. Cannon has cut its staff to 57 from 100 since the bursting of the real estate bubble.
WHAT HE SAID: "We've had some situations where customers have more or less said, 'Here, bank, this didn't work out for me,' and they are turning their keys into the lender before construction is finished. It's a very small niche."
The move is the latest by Cannonto help make ends meet and retain staff after already paring down to about 57 employees from 100 and moving into commercial construction, where business remains strong.
"We've had some situations where customers have more or less said, 'Here, bank, this didn't work out for me,' and they are turning their keys into the lender before construction is finished," founder John
Cannon said Tuesday. "It's a very small niche. I can't imagine there being many of these."
Sarasota-based real estate brokerage Michael Saunders & Co. recently announced that it had created a division to sell homes reclaimed by banks and other lenders. Competitor Coldwell Banker already is one of the biggest players in that market.
Cannon's effort is an interesting addition for an upscale builder that in 2003 was named one of the nation's "50 Best Companies to Work For" in the residential construction industry by Professional Builder Magazine.
Cannon has built in some of the most expensive subdivisions in Southwest Florida, including the Country Club at Lakewood Ranch; the Lake Club, also in Lakewood Ranch; The Founders Club on Fruitville Road east of Interstate 75 in Sarasota County; and the Concession Golf Club and Residences at the eastern end of University Parkway.
Cannon's idea was welcomed by a couple of interested observers.
"It's not only an interesting way to stay alive, it's also a community service," said Mary Dougherty-Slapp, executive officer of the Home Builders Association of Manatee County. "I have one of these homes in my neighborhood, and it's sad, because it's a reminder of how bad things have gotten.
"It's a great, creative way to add to his business model, so good for him," she said.
Edie Ousley of the Florida Home Builders Association also said Cannon's idea is innovative.
"It is not something I've heard of from our members, but it certainly does sound like they are being creative and expanding their business practices to get through the downswing," Ousley said.
Cannon will work out a flat fee with a lender, then his crew will go to work finishing walls, windows, doors and other punch-out items. He will hire swimming-pool cleaners and lawn care companies to maintain the properties.
He already is working on two homes where buyers walked away during construction.
Cannon is optimistic that he will not have to rely on his niche building for too much longer. He is starting to see an uptick in all the things one does before building a home, such as plan preparation, home design, site inspection and cost analyses.
"We're doing a lot of that type of work for people," Cannon said. "It's not a matter that they won't buy, it's a matter of when are they going to pull the trigger."