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Kara Homes Inc., the East Brunswick-based home builder, might be close to seeking protection from creditors under Chapter 11 of the bankruptcy law.
Earlier this week, at least some Kara Homes employees received a letter from the company notifying them that they were being laid off and stating that Kara "anticipates filing Chapter 11." Under that provision of the bankruptcy code, creditors claims are frozen by the court while the company can continue to operate as it attempts to reorganize. It was unknown how many employees were laid off, and the company official who signed the letter, Roberta W. Schultz, vice president of human resources and organizational development, could not be reached for comment. Patrick W. Turner, the general counsel for Kara, told the Home News Tribune that filing for Chapter 11 "is one of the alternatives we're considering." He said he would not comment on the letter.
For years, construction companies worked on the assumption that if they built homes, buyers would come. But that no longer holds true, and hundreds of new homes are sitting empty in a cooling Twin Cities market. What can a builder do when the housing market slows down and nearly 3,000 new single-family homes sit empty? Rick Storlie decided to act on his hunch that builders would need extra help to sell those speculative homes as well as draw new customers. He figured that most builders wouldn't want to hire more staff and that he could fill the gap by launching a new business called New Home Sales Coach. "Now, with the market shifting, homebuilders and salespeople can't rely on the market to bring them business," said Storlie, a former general manager at Custom One Homes in Cottage Grove.
Existing home sales across South Florida could rebound in the next three to six months, but demand for new homes probably won't pick up until 2008, a real estate analyst said Wednesday.
"The Realtors will get happy before the builders," Brad Hunter told more than 400 people attending an Urban Land Institute conference at the Palm Beach County Convention Center in West Palm Beach.
If hurricane season ends Nov. 30 without another storm hitting the region, hesitant buyers will start making offers on the glut of unsold homes, said Hunter, who runs the South Florida division of MetroStudy, a West Palm Beach consulting firm. It will take about 18 months after that for new home sales to increase, he said.
Other real estate observers are more skeptical of short-term improvement in a local housing market that slowed dramatically in 2006 after the five-year boom when the price of a typical home more than doubled to well above $300,000.
24 Hour Fitness Worldwide Inc. announced it has named Carl Liebert III as chief executive officer, replacing company founder Mark Mastrov. Mastrov will remain chairman of the board of the San Ramon-based fitness center company, which has revenue of more than $1.25 billion. "We continue to see tremendous growth potential, both domestically and in Asia," Mastrov said. "It is the right time to bring in an experienced leader who will help us continue to execute our long-term business plan." 24 Hour Fitness is owned by investment firm Forstmann Little & Co. Prior to taking the reins at 24 Hour Fitness, Liebert was executive vice president at Home Depot Inc. He was responsible for sales, execution and operations for Home Depot's 2,000-plus stores in the United States and Mexico.
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