Century City
BUSINESS: Residential real estate development company building for-sale master-planned communities
FOUNDED: 2009
TWO-YEAR REVENUE GROWTH: 2,935 percent
2014 REVENUE: $52 million
Responses from Chief Executive Andrew Adler
What did you do to achieve this rate of growth?
We saw a unique opportunity to buy financially distressed master-planned communities and create and develop a new type of luxury housing for these developments that had never been seen before. The plan focused on building elegant but minimal residences with sustainable features and ultrachic modernist architecture. We studied an incoming demographic of retiring baby boomers and other homebuyers from U.S. urban markets seeking a design style found only in large ultra-expensive custom modern Architectural Digest-type homes. We reduced the scale – but not the modernist architectural statement.
How did you manage the growing workload? For example, did you have to add space, hire more employees or move into new facilities?
We focused on maintaining low centralized overhead in L.A. We actually stayed in the same three-room office for five years and just last year moved to Century City. Our plan was to spend more time hiring the best people for the project posts and not overstaffing a corporate headquarters. We now have about 30 dedicated employees.
What were the biggest obstacles holding you back from growing? How did you overcome them?
Capital for an emerging residential real estate company in 2009 was almost nonexistent. We persevered over the first two years with many turn-downs for construction loans despite having substantial equity to support the loans. Shortly thereafter, we got a break with City National Bank, who gave us our first construction loan in 2012. Now, after our sales performance and proof of concept, capital sources are chasing us. Funny how that works out.
How do you manage expectations after such strong growth?
We are a cautious and experienced team. When markets get hot, you need two key components to succeed: a differentiated product and absolutely best-in-class locations. We are in a time where forward-thinking design is the predominant factor driving most all consumer decisions. You have to be out ahead of the conventional market and understand your demographic better than everyone else.
Is there anything you would have done differently?
Be aware of everything you don’t control. Business risks have increased globally and locally. There are factors influencing consumers that are less obvious than 20 years ago. Interest rates, global economies, social and political fears influence consumer spending habits more than ever.
What’s the most important lesson you’ve learned over the last three years?
Nothing. Maybe we should have bought some more projects had I known it would have gone this well. That said, we like our current scale for now. We prefer staying selective and are now looking at other unique market areas suitable for our approach for growth. Unlike a lot of developers, we are not focusing on growth for growth’s sake.
Does your location in the L.A. area help or hinder your growth?
We have just diversified our firm into consumer finance in the medical space with the commencement of MD Credit, based in our Century City offices. We love our location in Century City for connectivity to our capital partners, banking sectors and our professional workforce. And the lifestyle on the Westside can’t be beat.
