Steve Phua, President and CEO; Mike Hart, Vice President Sales and Marketing; John Picon, CFO; Kolby O’Herron, Director of Operations
By: Lisa Wirthman, Special to the Denver Business Journal
A narrowed focus on profitable segments of the housing market helped CDL Homes Inc. (doing business as Wonderland Homes) not only survive the economic downturn, but also capitalize on its rebound.
Wonderland Homes more than doubled its revenue from $16 million in 2011 to $34 million in 2012. Part of that growth came from a housing surge that helped create Denver’s strongest economic outlook since 2008, according to the city’s Office of Economic Development (OED).
In May, Denver’s housing market was the strongest in the nation, with home values up 8.3 percent in one year and 5.1 percent in five years, the OED reports.
Like many companies during the recession, Wonderland Homes went through a severe layoff, dropping from 51 to 12 employees.
“We got as thin as we could,” said Steve Phua, president of the Westminster-based company. “Then we just concentrated on the most successful product lines that we were delivering to the market.”
The company focused on building homes costing around $300,000, said Phua, and generated sales both from grandparents downsizing from larger properties and young families buying their first homes.
Most of those homes were built in Denver’s Stapleton district, one of the largest master-planned communities in the country.
In the last 10 years, Stapleton has built 4,600 for-sale homes and 700 rental apartments, according to the Stapleton Business Ready report.
Wonderland Homes also maximized productivity during the downturn by investing in a “soup to nuts” software package that helps the company track customers’ activity, from their first office visit all the way through their contracts and warranties.
“It allowed us to remain efficient without having to add people,” Phua said.
With the economy improving, Wonderland Homes has increased its product offerings in Stapleton and is also moving into the Northern Colorado housing market. Beginning next year, the company will be building in Loveland and Fort Collins.
Even with a careful eye on the housing market, Phua said the recent surge in building was a surprise. “We were not prepared for the explosion of growth,” he said. “It almost happened overnight, where all of a sudden it was OK to buy a new house.”
Uncertain whether the rebound was real, Wonderland Homes held off on hiring for as long as possible, asking staff to speak up when they felt overwhelmed so new staff could be hired only as needed. The company now is back up to 23 employees.
Wonderland Homes will continue to target young families, and is shifting more of its focus to multifamily townhouses and attached projects, which will account for about half the company’s business moving forward, compared to 25 percent before the recession, Phua said.