Graystone Construction

Source: Construction Digital

Date :08/05/2008 06:50:45

How do you combat a sluggish construction market? Graystone has opted to diversify, offering a range of related services. Exec learns more

Written by Megan Santosus and Produced by Sean Bakke

As a high-end custom home builder, Mark Schneider knows that his company, Graystone Construction Co, has it better than many other construction firms. “We are somewhat insulated from the downturn,” says Schneider, Graystone’s founder and president. “The buyers we sell to have a significant amount of wealth.”

The people that Graystone targets — typically retirees or second home buyers — are in the market for homes that can encompass from between 3,500 to 9,000 square feet, and cost between $3 million and $8 million. Clearly, Graystone doesn’t cater to buyers who are feeling squeezed by the mortgage crisis.

Yet since Graystone was founded more than three years ago, the business climate has never been as challenging as it is now. More projects are on hold, fewer developers and buyers are building on speculation, and deals are taking a bit longer to negotiate. “For many buyers, the questions are whether they need 6,000 square feet or 4,000 square feet, and whether they want a house now or in a year-and-a-half,” he says.

Schneider originally launched his company in the areas around Dana Point and San Clemente, CA. When business drew him to the wealthy desert enclave of La Quinta, CA, and the surrounding area, he contemplated setting up an additional office before relocating his business outright.

To combat the sluggish market, Graystone has diversified, offering other related services, such as construction management, site selection, and planning and design. “Sometimes a developer will contact me and ask me to find a lot for a 7,000 square foot home, in a certain community with specific requirements, and then create a Performa for project,” Schneider says. In addition, Graystone is further diversified by building custom homes for both developers as well as individual home owners.

As a custom builder of luxury homes, Graystone sets its projects apart by using different materials and different designs: from a choice of slabs for countertops, to real stone on walls, inside and out, faux finishes, custom hand-made light fixtures and elaborate water features and landscaping. “Our goal is to create houses to be different, but you don’t want to get too far outside the box.”

Diverse background

Schneider has a diverse professional background – including a career in the automotive, industrial, and commercial industries – where he has learned the concepts of continuous improvement and uses them at Graystone. For example, he relies on quality assurance checklists for every phase of project to minimize mistakes.

“There may be 20 to 80 items on the checklists of things you have to do before you pour a concrete slab, wrap the exterior, or drywall the interior or some other stage of the project,” he says. “You can’t remember everything, so it helps to have the checklists.”

Another way he minimizes mistakes is to conduct frequent walkthroughs with architects, owners and designers so nothing has to be ripped out if it doesn’t meet their satisfaction.

Graystone also tends to have many tradespeople on site than most other builders, something that can reduce the construction phase of a project considerably. Schneider says that most builders prefer not to have more than three trades on a site at the same time; given the size and scope of Graystone’s projects, he is comfortable having several trades onsite including electricians, plumbers, tile installers, plasterers and the like.

“Realistically, you have to look at the project and figure out how to shorten it without affecting quality,” he says. Overlapping trades can trim a schedule by two-to-six months. And a shorter schedule can add up to significant savings for a buyer. “If you can take six months from a project that costs $35,000 a month in construction loans, that adds up to $210,000 in savings,” Schneider continues, then adding that Graystone has been able to land a few more jobs by reducing schedules.

Ensuring quality

Another way to ensure quality while reducing timeframes is working with a constant staple of subcontractors. “There are no more than four subcontractors per trade that I work with over and over,” Schneider says. The subcontractors are familiar with Graystone’s paperwork and processes, scheduling of trades, and quality and safety programs. Several of these subcontractors have worked with each other on numerous Graystone projects through the years “All of this leads to better timing and quality.”

Despite the level of co-ordination and teamwork required for a complex and large home construction project, Graystone is not a sophisticated user of IT. The company uses Quickbooks Premier Contractor for accounting, Mircrosoft Project for Scheduling, and Microsoft Word and Excel for everything else. “We really try to keep things simple as long as it works for us,” he says.

On average, Graystone is working on four or five projects at different stages at any given time. Typically, between two and four houses are under construction at any given time. “From the time you buy a lot to put a shovel in the ground can take six to eight months,” explains Schneider. And construction can take another eight to twelve months depending on the size of and complexity of the home. “I like to break ground every two to three months on a new home,” Schneider says.

Hands-on

As president of a small company – Graystone has five employees – Schneider is decidedly hands-on and likes to be onsite for up to four hours per day in the final month as construction winds down on a project. “When building homes of this caliber, people want and expect quality finishes and workmanship, it is my goal to meet and exceed their expectations in this area,” he explains. “For this reason, starting construction projects at the same time isn’t nearly so challenging as long as they are finished at different times.”

Up to this point, Schneider has built his business almost entirely on word of mouth and referrals, but in a sign of the times, even Graystone has to become more active in marketing. “I’m trying to find new home buyers or reach out to lot owners so I have the opportunity to build their houses,” Schneider says. “I’m networking with realtors and I have face-to-face meetings with architects and large developers so I can get on their preferred-builder lists.”

In the past several months, Graystone’s advertising and marketing budget “has gone from minimal to whatever it takes.” Still, with revenues on track to come in at $15 million this year, Schneider knows that Graystone is in a much better position than most home builders out there.

Click here to view the corporate brochure on Graystone Construction