Lifelong friends bring their shared values to the Texas homebuilding market.
When two lifelong friends come together to start a homebuilding company, there’s no debate regarding the ethics and values that will guide the firm and its decision-making process. That’s what potential homebuyers encounter when they work with PSW Real Estate in Texas.
“When you start a company with your friends, you know you are launching from a place of common understanding and shared values,” says Anthony Siela, managing member of PSW Real Estate who founded the company with Ryan Diepenbrock in 2001. “Ryan and I know how each other processes information and makes decisions, so we can move quickly on things that might take competitors much longer. We also have the same standards when it comes to doing the right thing, which plays a big part in building a company’s culture and deciding how to treat customers.”
Siela and Diepenbrock originally joined forces in Arizona by purchasing investment rental properties near their alma mater, Arizona State University. In those days, the only goal was to build a portfolio around the college while in school and after graduation.
In 2006, Diepenbrock and his wife moved to Austin, Texas, with plans to build a portfolio of residential rental properties. Siela and Diepenbrock were equity partners in some of those early acquisitions even though Siela stayed in Arizona working for Shea Homes, where he was responsible for master plan acquisitions and development.
When the economy took a dive in the latter part of the decade, Siela moved his family to join Diepenbrock in the Austin housing market.
“Ryan had developed an understanding of the local economy and development regulations, and I had learned a lot about how to run a homebuilding company,” Siela says. “We decided with land prices depressed but slowly rising, the time was right to build higher-density communities in urban locations.”
In 2011, Diepenbrock and Siela invited another high school and college classmate, Michael Padavic, to join PSW Real Estate in an effort to establish a holistic design vision while improving the efficiency of PSW’s development process. Padavic and his wife, Kristen, who is PSW’s lead project designer, lead an architecture team responsible for the design of all PSW’s communities and homes from acquisitions through construction.
“The alternative of hiring individual – and, most of the time, different – consultants did not consistently meet our quality standards of design,” Siela says. “With the recession hitting the national economy hard, we were able to acquire top talent in the industry to take our planning and design group to the next level. The improved, vertically integrated PSW is proving to be a differentiator in our opinion.”
The numbers speak for themselves. After forming its own design division, the number of active PSW projects quadrupled from 2011 to 2013. Building on this success, PSW expanded into the Dallas-Fort Worth area in early 2013 and hired another veteran from Shea Homes, Adam Stetson, to lead the division.
In 2013, PSW Real Estate was identified as the fifth-fastest growing company in Austin by the Austin Business Journal for companies with more than $10 million in revenue. It was also listed on Professional Builder’s Housing Giants list.
“I don’t think either one of us thought that PSW would eventually become the Texas-based homebuilder and developer that we have grown into,” Siela says. “We started slow – in the early years, we were completing less than 10 homes a year. But now we’ve got nearly 500 home sites in some of the most desirable locations of three major Texas markets and are keeping our eyes peeled for opportunities in other states as well.”
Siela says that Texas continues to grow by leaps and bounds, and PSW Real Estate intends to grow with it. However, the company prefers conservative, steady expansion versus gobbling up land in markets they don’t yet understand.
“The tendency is to stretch to make the land value work in a pro forma versus thinking about the customer buying the property in today’s dollars when the offer is made,” Siela says. “That level of conservatism along with our infill locations is designed to minimize the ebbs and flows and the cyclical nature of real estate both for us and our homeowners.”
“WE WERE ABLE TO ACQUIRE TOP TALENT IN THE INDUSTRY TO TAKE OUR PLANNING AND DESIGN GROUP TO THE NEXT LEVEL.” - Anthony Siela, managing member
A smart expansion philosophy coupled with the perspective of a fully integrated builder/developer business model keeps PSW Real Estate ahead of the competition in a crowded Texas homebuilding market.
“It is tough for other companies with scale to get comfortable with the unique, high-profile land positions that could impact their efficiency,” Siela says. “Smaller groups that do one deal at a time are in our locations, but they likely don’t have the infrastructure to get the first look at the premier infill housing opportunities that we would be interested in.”
Lone Star Future
Siela envisions PSW Real Estate expanding beyond Texas’ borders. By staying true to the ethos of these lifetime friends, he believes there will be no limit to the markets the company can penetrate down the road.
“It is unusual for someone in our space in the industry to be around for almost a decade,” Siela says. “Most folks would either come and go as the market cycle dictates or look to grow in a different fashion such as volume or density. We have a passion for our people and our customers, and recognize that these two groups are our biggest assets. Great infill locations and markets will be available to a group such as ours if we maintain our values centered around serving these folks.”