Illustration by TBD‘s Maggie Goldstone: (left) Michael Nieri, CEO, United Homes Group, Brian Herring, President, Great Southern Homes, Raleigh

Looking to ignite a built-to-scale business model that has already proved itself in an algorithmically-growing South Carolina-Georgia axis, America’s newest public homebuilder has now established a Raleigh, N.C. beachhead to the north.

United Homes Group

Source: Diamond Head Holdings 

What’s ahead now for United Homes Group — accounting for a backdrop of near-term volatility, the ongoing threat of a recession, and otherwise tricky operating conditions – is an ambitiously steep arc of growth. The focus is three-pronged:

(1) market expansion, mostly via acquisitions

(2) built-to-rent building-as-a-solution services

(3) mortgage and other consumer value enhancing services

Already, Hamamoto and Nieri have gotten the M&A engines running, looking for deals private single-market and regional homebuilding firm matches, that fit the bill for business culture, footprint, customer segment, and upside growth opportunity criteria:

The Herring Homes acquisition, then, is the first of a spree of deals just like it that UHG has its sights set on as part of its masterplan to become a Southeastern “mega-regional” powerhouse.

Brian’s going to take responsibility from Raleigh east to Wilmington, N.C., and really actually lead as our fourth division head,” Jack Micenko, president of UHG tells The Builder’s Daily. “We’re excited  it’s a way to get market intel and market knowledge in a capital-efficient way in a market we want to be in that Brian and his team gave us the opportunity to enter. As we talk with others about combinations, we’re almost exclusively talking folks that, like Brian, are in their 40s that one that want to stay involved in the business, but need capital need a bigger foundation underneath them, right. And that’s kind of exciting. And that’s what we want to do, right? We want we want to bring folks into the fold that can grow with us..”

Additional states UHG has targeted in particular for an accelerated path to regional critical mass include its current strong position in South Carolina, Georgia, North Carolina, Virginia, Tennessee, Florida, and Alabama.

We’ve noted:

By taking just 1% share in each of those states, it could increase revenues by upwards of $1.5 billion, on home volume growth of nearly 5,000 closings per year.”

In a recent SEC filing, UHG notes:

Of the four main U.S. regions, the south experienced the most favorable migration patterns, with more people moving in than moving out domestically between 2021 and 2022, according to the U.S. Census Bureau.”

Now, that’s part of the good news as a sustainable demand stream expected to continue non-stop through the end of the 2020s and beyond. It’s also part of the particular challenge to UHG and its own urgencies to activate its pan-regional scale strategy on a fast-track. Prior to Covid, algorithmic economic and population growth trends were beginning to pop up on a wider radar of opportunity, but still regarded as a “better-kept-secret” compared with the glare of the spotlight the region is now experiencing.

For UHG, these acupuncture-style first acquisitions in the early-going will be super important to get right, integrate fast, and begin replicating the same velocity and operational excellence the original Great Southern Homes group has been known for.

Expect more to come on the M&A front as UHG chairman and ceo Michael Nieri and his growing time strive to make their grand vision a reality. The critical thing is that with each new “family-member” addition, the roll-up needs to get better as it gets bigger.