Great Southern Homes Company Profile

Background

Great Southern Homes (GSH), founded in 2004 and headquartered in Irmo, South Carolina, has established itself as a leading homebuilder in the Southeastern United States. The company specializes in constructing high-quality, affordable homes tailored for entry-level and first-time move-up buyers. With a commitment to energy efficiency and modern design, GSH has built over 11,000 homes across South Carolina and Georgia, and is expanding into North Carolina. In March 2023, GSH transitioned into a publicly traded entity through a merger with DiamondHead Holdings Corp., rebranding as United Homes Group, Inc. (UHG) and trading on the Nasdaq under the ticker symbol "UHG".

Key Strategic Focus

GSH employs a "land-light" operating model, controlling land supply primarily through lot option contracts rather than owning large land inventories. This strategy enhances capital efficiency and reduces cyclical risks. The company's primary markets are in South Carolina and Georgia, regions experiencing rapid population growth and increased housing demand. GSH focuses on providing affordable, energy-efficient homes equipped with modern amenities, aligning with the needs of entry-level and first-time move-up buyers.

Financials and Funding

The merger with DiamondHead Holdings Corp. valued the combined company at a pro forma enterprise value of approximately $572 million as of December 31, 2022. The transaction delivered approximately $320 million in cash proceeds, net of estimated transaction costs, to the combined company. These funds are intended to support organic growth, strategic acquisitions, and the development of a build-to-rent platform.

Pipeline Development

GSH has access to over 11,000 finished lots in high-demand submarkets, positioning the company to meet the growing demand for affordable housing. The company is also expanding into North Carolina, further broadening its market presence.

Technological Platform and Innovation

GSH integrates energy-efficient features into its homes through the GreenSmart program, which includes:

Tankless water heaters

Programmable thermostats

HERS Rating testing

Energy Star appliances

Water-conserving fixtures

Low-E windows

These features enhance energy efficiency and reduce environmental impact.

Leadership Team

Michael Nieri: Founder and CEO of GSH, Nieri has over 20 years of experience in the homebuilding industry. He continues to lead the company following its transition to United Homes Group.

David Hamamoto: Former Co-CEO of DiamondHead Holdings Corp., Hamamoto joined UHG as a Director post-merger. He brings over 40 years of experience in real estate investing and operations.

Keith Feldman: Previously the CFO of DiamondHead Holdings Corp., Feldman assumed the role of CFO at UHG after the merger.

Leadership Changes

The merger with DiamondHead Holdings Corp. in March 2023 led to significant additions to the leadership team, including David Hamamoto and Keith Feldman, enhancing the company's strategic and financial expertise.

Competitor Profile

Market Insights and Dynamics

The U.S. housing market faces a significant shortage, with a 2021 Freddie Mac study estimating a deficit of 4.4 million homes. This shortage, particularly in the entry-level segment, presents substantial growth opportunities for homebuilders like GSH.

Competitor Analysis

Clayton Homes: A subsidiary of Berkshire Hathaway, Clayton Homes is the largest builder of manufactured and modular homes in the U.S., offering a range of affordable housing options.

Schumacher Homes: As the largest private custom homebuilder in the U.S., Schumacher Homes operates in multiple states, providing customizable home designs.

Shea Homes: A subsidiary of J.F. Shea Co., Shea Homes operates in various U.S. regions, focusing on new home construction with a history dating back to 1881.

Strategic Collaborations and Partnerships

The merger with DiamondHead Holdings Corp. provided GSH with significant capital to pursue strategic acquisitions and expand its build-to-rent platform, positioning the company for national growth.

Operational Insights

GSH's "land-light" operating model allows for greater flexibility and reduced financial risk compared to traditional homebuilders. This strategy, combined with a focus on energy-efficient, affordable homes, differentiates GSH in the competitive homebuilding market.