Costa Mesa’s Zellner Housing Sold to Virginia Firm
NVR L.P., the large Virginia-based home builder, intensified its thrust into the Southern California market Tuesday with the acquisition of Zellner Housing Corp. here for $28 million in stock.
The acquisition of Zellner--which specializes in lower-price homes in planned communities in Orange, Riverside and San Bernardino counties--follows NVR’s $7-million purchase last year of H.R. Remington Properties, which is active in the luxury market in South County and the San Francisco Bay Area.
The purchase comes as the California housing market is slowing down, particularly in the high-priced coastal counties, and some experts are concerned about a coming slump.
NVR, which is based in McLean, Va., and holds a dominant share of the home-building market in the Washington area, was ranked as the nation’s largest builder of non-rental housing in 1988 by Professional Builder magazine.
Donald G. Zellner, founder and chairman of Zellner Housing, will become a director of NVH and head the company’s California operations.
NVR, a limited partnership formed in 1987 by the merger of Ryan Homes and NV Homes, had revenues of $1.3 billion last year and profits of $33.5 million.
The company’s strategy, spokesman Doug Poretz said, involves participating in all four segments of the home construction market: land acquisition; manufacture and sale of house components; construction and sale of houses, and financing. The land development unit and mortgage units are therefore expanding in California to support the construction activities of Zellner and Remington.
He added that no decision had yet been made on moving into the home components market in California.
Zellner said he decided to sell the company because “the industry is going through a consolidation, and the building companies of the future are going to be larger and more integrated than in the past. The competition for land is such that you need to be part of a larger operation.”
Poretz emphasized that NVR has a highly decentralized management structure and that the California units would continue to operate autonomously.
NVR seeks a dominant position in its markets, Poretz said, and has pulled out of such markets as Houston, Atlanta, Cleveland and parts of Florida, where it could not establish such a presence.
