Regional Builder Liquidates, Exits Atlanta Market

ATLANTA -- A regional home builder is liquidating its assets through the bankruptcy courts as it exits the troubled metro Atlanta market, which is showing some signs of recovery.

Comstock Homebuilding Companies Inc. filed Chapter 7 liquidation bankruptcy Nov. 12 on its metro Atlanta holdings: Buckhead Overlook LLC, Post Preserve LLC and Parker Chandler Homes LLC.

All of the companies were subsidiaries of Reston, Va.-based Comstock. Parker Chandler Homes was formerly known as Comstock Homes of Atlanta LLC.

The bankruptcy filings were part of "the company's strategic realignment plan that includes the liquidation of Parker Chandler Homes and the winding down of all operations in the Atlanta market," Comstock CEO Christopher Clemente announced in a Nov. 13 filing with the Securities and Exchange Commission.

Comstock entered the Atlanta market in 2006 with the purchase of Parker Chandler Homes Inc.

Although Parker Chandler Homes was Comstock's entity name in metro Atlanta, Buckhead Overlook and Post Preserve were both single-family subdivisions the company had planned in Forsyth County.

Buckhead Overlook was a 60-lot subdivision in Cumming.

Post Preserve was a 60-lot single-family project that also included 62 townhouses in western Forsyth County.

Bankruptcy petitions for all three subsidiaries list each as having up to 49 creditors and debts of up to $10 million and assets of up to $10 million. A breakdown of the debt was not listed in the court filings.

Paul Reece Marr, attorney for Comstock in Atlanta, declined comment.

Comstock announced in November 2008 it was exiting the metro Atlanta market and most of its metro Atlanta properties had gone inactive.

Positive signs

Metro Atlanta home builders have had a rough go of it over the past two years, but the market is starting to show signs of recovery. "Almost all housing indicators have reversed and are now heading in a positive direction," said Eugene James, director of Metrostudy Inc.'s Atlanta division. "Finished inventory has been reduced to a level where builders have been forced to resume building new homes."

Pulte Homes Inc., metro Atlanta's top home builder, recently reported sign-ups for new homes in the third quarter in the Southeast were up 55 percent to 753 homes.

Pulte, which sold 970 homes in metro Atlanta in 2008, continues "to experience good demand in Georgia, Charlotte and in South Carolina," Steve Petruska, Pulte's executive vice president and chief operating officer told investors Nov. 4. "We expect these markets to be areas of strength for Pulte not only now, but into 2010 and beyond."

Metrostudy's third-quarter numbers show that in September, metro Atlanta's finished inventory was reduced to about 11,000 units, a 37 percent decline from September 2008 and a 48 percent decline from September 2007. Finished vacant housing inventory is one of the fundamental indicators Metrostudy, a residential research firm, uses to monitor the health of the market, James said.

"The reduction of inventory has encouraged Atlanta builders to switch gears during the third quarter and instead of slowing the pace of starts, they started more homes than in the previous quarter," James said.

Metro Atlanta builders started 1,152 homes in the third quarter, up 17.2 percent over the second quarter's 983 starts, he said.

James doesn't expect a fourth-quarter lull in home starts, which is the historic norm.

"I think at worst [housing starts] will be flat," he said. "But I think there will be a slight uptick. I'm hearing there are a lot of builders that are out of inventory."

Starts are up slightly, but it is mostly the national builders in metro Atlanta who are building, said Steve King, president of the Greater Atlanta Home Builders Association and manager of Ivy Chase LLC.