Building on the Bust

Asked where his offices are, David Rotter, CEO of the Rottlund Company, replies: “3065 Centre Pointe Drive. That’s ‘Centre’ with an ‘r-e’ and ‘Pointe’ with an ‘e.’ Can you get any snootier than that?”

Snooty certainly isn’t a word one would use to describe either Rotter or Roseville-based Rottlund. The largest Minnesota-based homebuilder doesn’t have a public relations department, and Rotter is as accessible as he was in 1973, when he and Roy Lund founded Rottlund Homes. (Rotter’s brother Bernard joined shortly thereafter. The brothers bought Lund out in 1991). By the end of last year, Rottlund had built more than 20,000 homes. Nationally, Rottlund ranks 75th in revenues, the only Minnesota homebuilder to make the top 100, according to Builder magazine.

Just as it has for homebuilders across the country, business has slowed at Rottlund, which sells mostly in the entry-level and move-up price points through both its Rottlund Homes and David Bernard divisions in the Twin Cities, Tampa, and Des Moines metro markets. But that doesn’t seem to much bother the good-humored Rotter, whose work these days is mostly in strategic planning. “I get up at 5 a.m. and I think until 7 a.m.,” he says. “That’s my job, to think.”

So what is he thinking about? He believes that the current housing slowdown is an ideal time for his company to accomplish all of the administrative items it didn’t have time for during the housing boom—redoing its marketing materials with slightly larger type to accommodate aging baby boomers, revamping the company’s Web site, updating its signage, and making sure its model homes are in tip-top shape. He’s confident his company will emerge from the downturn stronger, and his people will have earned invaluable experience working through a tough market.

In the meantime, Rotter says, “business is trickling along. We’re doing fine.” The housing market is turning up some good deals for homebuyers, he adds. The downturn also could reveal some good buys for builders, whether that’s land sold at fire-sale prices or smaller builders that put up too many properties on spec during the boom.

“We’re very tenacious in prepping ourselves, getting ready for the market to turn,” Rotter says. “To do that, you have to continue to be in the market. You have to continue to sharpen all of the tools you have—your sales staff, your models, your new homes, the new developments you are working on. If you can do that, when business starts to turn, it will turn for you first. If you sit back and wait for it to turn, and then jump in and say, ‘Okay, now we are going to go do some business,’ you’ve missed the first portion of the market improvement.”

Rotter should know. He’s lived through downturns before.