Franco Tenerelli – Landsea Homes
Franco Tenerelli likens the homebuilding business at Landsea Homes to zipping around in a small handy speedboat, darting between a fleet of lumbering, slow-moving ships.
“We are able to do things quickly and in a timely manner, more so than our competitors,” says Tenerelli, executive vice president and chief legal officer at the Newport Beach, California-based homebuilding business.
While Tenerelli says startups are not commonplace in the national homebuilder market, the young firm is competing against those in the game for upwards of 40 years, thanks in part to its emphasis on high performance enabled by technology. Founded in 2013, Landsea currently has 43 communities under construction with more than 3,000 lots in California, metro New York and Arizona.
“There’s tremendous growth and we fully expect to hit a billion in revenues next year,” Tenerelli says.
A market that’s hot, hot, hot
Steps toward achieving that goal were made easier last June with the eight-figure acquisition of Pinnacle West Homes in Arizona. That transaction made Landsea Homes one of the Top 15 homebuilders in Greater Phoenix only 12 months after it had entered the market.
The growth isn’t too surprising, says Tenerelli, who managed the mergers and acquisition (M&A) documentation and due diligence. The firm did its homework, researching areas of growth in the country and the job market. Phoenix, as the fifth-largest city in the United States, checked all the boxes for success.
By folding the cutting-edge green technology gleaned from its global parent company into its stateside developments, Landsea brings huge appeal to the table, Tenerelli says. Strategic partnerships with companies like Apple are also allowing it to leverage smart home technology into its designs.
Taking the process a step further, Tenerelli says Landsea also went after the first-time, affordable homebuyer market, offering millennials technology-rich, responsibly-built, single-family homes with prices ranging between the high $200,000s and $300,000s.
“Affordability is key in this market, something the average person can buy. … There is a tremendous amount of outflow from California to Arizona for that very reason,” he says.
So, exactly what technological home innovations can you get for your money?
Quite a bit, Tenerelli says.
For starters, Landsea is building smarter and eliminating waste. As an example, if building materials come in a particular size, Landsea incorporates these sizes into its plans, greatly reducing the amount of construction waste.
With extreme temperatures, especially in Arizona, well-insulated energy-efficient homes are needed to reduce energy consumption. To that end, Landsea’s partnership with Apple pays dividends as homeowners can implement a variety of technologies—from timed and automated thermostats and ambient lighting to electronically operated shades. Energy-generating solar options—prevalent in the sun-drenched Southwest—are also being implemented to produce clean energy and reduce costs.
Outside of thermo-regulation, homeowners can also enjoy everything from smart door locks to high-tech internal maps to ensure that there are no dead wi-fi spots anywhere in the homes.
The goal of these innovations is sustainability and to preserve—not waste—resources. Many of the technologies are also being implemented in newly-growing projects in Manhattan, and in Northern California where Landsea also operates.
“Phoenix is harsh environmentally, with temperatures frequently exceeding the triple digits,” he says. “We have the high-quality product in desirable areas with technologies homeowners like at a price they are willing to pay.”
Given the niche for first-time homebuyers, the company also has high-end upscale versions of its homes. Luxury offerings in Newport Beach, made available in 2019, are almost sold out, with prices up to $3 million. A high-rise project underway in Manhattan has units priced between $3 and $4 million.
“I liken it to owning a Mercedes; we have cutting-edge luxury offerings in our S-Class models, which we strive to make accessible in our more affordable C-class models,” he explains. “There are options and they all perform well.”
A matter of DNA
From the get-go Tenerelli possessed that same high-performance drive to achieve.
Earning a bachelor’s degree in philosophy at the University of California in Los Angeles in 2002, he later earned a law degree from Loyola Law School in in 2006. As busy as he is these days he’s going back for more, studying for an MBA at UCLA Anderson School of Management in his spare time.
“There are so many business applications in law and real estate these days,” he says.
Following law school, Tenerelli found himself interning in the Office of Governor Arnold Schwarzenegger in 2005, later landing a job as senior associate at Holland & Knight LLP in 2006. For seven years he handled matters of real estate, corporate law, intellectual property and white collar defense investigations.
Tenerelli also saw plenty of activity involving high-level homes and construction as regional counsel in the western United States for construction giant Toll Brothers. Covering the territories of California, Washington, Nevada and Arizona, he was involved in the company’s various day-to-day legal matters and the company’s biggest acquisition to date: Shapell Homes.
“Quality was in their DNA,” he says. “I learned what worked, or didn’t work, and brought that experience to my current position.”
Joining Landsea Homes in 2016, Tenerelli is the first and only lawyer in a legal team that includes him and a paralegal.
An important job outside of the acquisitions and corporate governance is implementing new technologies, automating several timesaving and cost-effective processes.
“We put in a lot of systems technology from e-signatures and electronic document packages. It’s remarkable how much efficiency you can have at your fingertips, which used to be handled manually,” he says. “We can track our costs and expenses down to the penny.”
For Tenerelli, a great deal of satisfaction comes from seeing the company’s exciting growth and the role he has played.
“When I arrived, I was the 30th employee and now we number more than 200,” Tenerelli says, noting by the end of next year Landsea Homes will be 10 times the size it was when he started. “I love being directly involved on a day-to-day basis, helping to share and mold where we are going in the future decades. I see a lot of growth and it’s been a wild ride.”
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