The Estridge Group, a fixture in the Indianapolis-area’s homebuilding industry for more than 40 years, is now part of a Houston-based company.
David Weekley Homes announced Tuesday morning that it has entered the local market by teaming with Carmel-based Estridge to form Estridge by David Weekley Homes.
Estridge’s decision to team with David Weekley Homes, the nation’s second-largest privately held home builder, follows Estridge’s struggle in recent months to keep afloat.
Owner Paul Estridge Jr., who will become Indianapolis division president of David Weekley Homes, said in March that he would be forced to discontinue sales operations within 30 days if he could not line up investors.
Estridge said that he succeeded in raising $4 million in capital to secure construction financing but ultimately chose to join with David Weekley Homes.
“At the end of the day, the decision was made largely because of the unbelievable respect I have for David Weekley,” Estridge told IBJ. “Although I have raised the capital, I have very little confidence that the banking environment would be as such that we could do this on our own going forward.”
Estridge, which traces its roots to 1967, becomes the latest in a string of local home builders to succumb to one of the worst housing markets in decades. C.P. Morgan Communities LP and Davis Homes folded in 2009, and Hansen & Horn Group Inc. followed suit in 2010.
Nationally, new-home sales declined from 1.2 million in pre-recession 2005 to 321,000 in 2010. According to the Builders Association of Greater Indianapolis, home permits during the same five-year period in central Indiana dropped from 13,202 to 3,720.
New-home construction could fall even more this year. Building permits filed in the Indianapolis area during the first three months of 2011 fell by 31 percent compared with the same period a year ago.
David Weekley Homes, however, is confident it can tap into the Indianapolis market.
“I was intrigued by the idea because I knew we had similar philosophies to business [as Estridge] and saw an opportunity,” company Chairman David Weekley said in a prepared statement.
Founded in 1976, David Weekley Homes operates in 14 cities across the country and is the latest outside home builder to enter the Indianapolis market.
Potterhill Homes Ltd. and Fischer Homes Inc., both based in the Cincinnati area, arrived last year.
David Weekley Homes will begin sales next month in Anderson Hall in Fishers and Highland Green in Brownsburg, both Estridge developments. The company is expected to begin building homes in June.
Estridge had been offering home sites in 17 neighborhoods, according to the company’s website.
Estridge is leaving its headquarters at Clay Terrace in Carmel for 7,500 square feet of space at 1041 W. Main St., also in Carmel. About six employees will accompany Estridge to the new venture. Estridge said he is hopeful that number could grow to 24 within the next year.