William Lyon's compass is pointed due west. That's where the homebuilder and its joint venture partners design and build single-family detached and attached houses. California accounts for about 80% of the company's home closings; William Lyon also builds and sells homes in Arizona and Nevada. The company targets entry-level and move-up buyers; its homes range from $110,000 to $700,000, averaging some $350,000. William Lyon owns about 10,000 development lots and holds options to buy more than 400 additional lots. The company assists with financing through William Lyon Mortgage. Chairman William Lyon and his family control the company.
The company filed for Chapter 11 bankruptcy in 2011, but emerged the following year. The filing, which listed some $600 million in liabilities, included a pre-approved restructuring plan to raise some $85 million and reduce its debt by 37%. The Lyon family invested $25 million as part of the recapitalization plan in exchange for additional equity.
Lyon Homes already is planning the development of two new projects in South Orange County that will include more than 190 single-family attached units. The company also acquired a 27-acre parcel of land in Palo Alto and Mountain View, California. The development will include about 300 units.
Like other homebuilders, William Lyon has been dealing with declining sales in the economic downturn. Because of decreased home orders and high cancellation rates in all but its California market, the company in 2008 slashed its workforce by about 25% and sold properties in 10 communities for about $90 million to raise cash. The company fared a bit better in 2009, as cancellations decreased and new home orders began picking up. William Lyon also cut the base prices of its homes and offered new incentives to keep sales up.
In 2010 sales continued to slump and new home orders slacked off at the end of the year after a federal tax credit for new homebuyers expired. Lyon Homes temporarily suspended development, sales, and marketing on certain projects. The company shifted its acquisitions on finished lots in stable markets. – less