Condominiums and Residential Real Estate and Homebuilders and Construction and Real Estate & Retail

Portrait and Pasquinelli Homes winding down in Indianapolis

January 12, 2009
One of the area's largest condominium builders may have to exit the market because of slowing demand and problems with financing.

Portrait and Pasquinelli Homes was building 250 homes a year here a few years ago, but the firm—one of the nation's largest privately owned home builders—now is struggling to stay alive in its 13 metro markets, where it has built more than 45,000 homes during more than 50 years in business.

The Chicago-based company wants to maintain a presence in the Indianapolis market but it won't be able to stick around without bringing at least some of its lenders along, said Joe Kopec, a company spokesman.

The firm is facing similar challenges in each of the metro markets where it has done business. It has lending agreements with separate banks for many of its projects, including those in Indianapolis. He would not name the banks.

"This is a culmination of a series of events that started last year with the credit crunch," Kopec said. "Pasquinelli and its businesses in your market are negotiating with a number of banks. Some of the banks are continuing negotiations, and some have decided not to."

The developer still lists a couple of Indianapolis-area projects on its Web site, including Prairie Lakes in Noblesville, The Oaks in Westfield, and Townes at Noble West. But others, including Hannover on the Green at Saxony, have been taken back by the banks.

If Portrait has to retreat entirely, it won't be the first home builder forced to shut down in the Indianapolis market. Locally based powerhouse Davis Homes closed in July, after a 23-year run in which it built 12,000 homes in central Indiana. Los Angeles-based KB Home Inc. left in 2007. DayMarc Homes, a local custom builder, had to close last year.

The problem is low demand and lower prices. In 2008, only about 4,500 homes were built in the region, a steep drop from the 13,000 constructed in peak years. Market observers expect about 5,500 new homes for 2009, but it could take a few years for the market to return to "equilibrium" of about 8,000 homes a year.

Portrait had been building roughly 150 homes a year since 2005, and it seemed to have carved out a "pretty solid niche" for itself, said Steve Lains, CEO of the Builders Association of Greater Indianapolis.

The firm's specialty is attached units, town houses or duplexes—which the company markets to the empty-nest market. Portrait projects popped up in Hamilton, Hendricks, Johnson and Marion counties.

"Like the rest of the industry, it's all about how quickly they can respond and work with their banks on credit and financing packages," Lains said. "When the industry changed the rules and standards, that creates a hardship on all builders."

The Indianapolis division manager for the builder, Tina Pasquinelli, did not return a phone message left at her local office. In an early 2007 IBJ story, she said she expected the condominium market to hold up better than single-family homes.

"We came to the Indianapolis area about 10 years ago because it is a good market and easily accessible," she said then. "We have felt the impact of the market, but not as much as other areas and we've sold more homes this year than in 2005."

The company is facing a federal lawsuit accusing it of failing to pay a now-bankrupt excavating company in Illinois. Locally, Portrait is facing lawsuits from Atlas Excavating, K&S Landscape Inc. and the Mapleton at Countryside Condominium Association.
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