DIRC Homes provides first-time homebuyers with outdoor-friendly features at attainable market-rate prices.
By Tim O’Connor
Denver is a city known for vistas an outdoor lifestyle, mountain views and 300-plus days of sunshine. Those who enjoy the outdoor lifestyle are drawn to the metropolitan area, with its easy-access to the mountains, and they expect their homes to match their desire for a natural environment with low maintenance. “One of the big things that has become expected in Denver these days is a rooftop patio,“ says Paul Malone, president of DIRC Homes. “Five or six years ago, that wasn’t common. Now it’s almost standard.”
DIRC Homes is quickly becoming a leader in providing these amenities. The company has between 30 and 35 units under construction at any one time and 200 total in various stages of development – most of which are designed by Boulder, Colo., architect Daniel Rotner of Daniel Rotner Architects (www.danielrotner.com). DIRC Homes acts as a developer and general contractor.
After nearly four years in business, DIRC has established itself as a homebuilder on the forefront of urban revitalization. “In the urban Denver market we’re very quickly rising to be one of the larger urban infill developers,“ Malone says.
When Mike Martines and Cory Palmeiro founded DIRC in 2012, the company had only one employee. Since then, it has grown to 10 employees and added Paul Malone as managing partner and president. Malone joined the company in 2013 to take over as the managing partner while Martines and Palmeiro put more of their focus on their commercial construction company, Martines Palmeiro Construction.
DIRC Homes began as a general contractor performing construction management services, mostly for projects in northwest Denver. In the last few years the company has grown the development side of its business starting with developing and building spec homes. About 60 percent of the company’s work is now developing their own projects, and the remaining 40 percent is serving as a general contractor or consultant for other developers’ projects. “Now we’re growing into larger developments where we are partnering with landowner developers in different joint ventures,“ Malone notes.
As its capabilities have grown, so too has DIRC’s revenue. In 2013, the company brought in about $1 million in revenue. That jumped to $5.8 million in 2014 and $9.5 million in 2015. Marketing Manager Michaela Derenne attributes that growth to Malone’s ability to network within the Denver market. “I think a significant part of it is our reputation and word of mouth,“ she says.
Adjusting to Market
From 2013 to 2015, DIRC concentrated on semi-custom homes ranging in price from $600,000 to $850,000. But starting this year, the company backed off semi-custom homes in favor of attainable market-rate projects targeting first-time homebuyers and empty nesters. “We’ve seen the market in Denver appreciate at such a rate, that many areas have become unaffordable,“ Malone explains. “We realize there is a lack of inventory and a need for market-rate affordable housing.”
Many of the features DIRC Homes includes in its pricier homes – such as rooftop patios – are finding their way into its market-rate projects. However, a few tradeoffs must be made to fit the budgets of first-home buyers. The size of the average DIRC Homes project is between 1,100 and 1,500 square feet – smaller than before – while finishes are not as luxurious and two-car garages have become one-car garages to increase density. Malone says that final item has not been an issue with most customers. “We’re realizing first-time home buyers are more likely to utilize public transportation,“ he explains.
As a result, DIRC Homes is becoming more strategic in where it locates its projects. Many developments target areas along light rail and bus stops to take advantage of Denver’s expanding public transit network. In addition to its own projects, DIRC is in the site planning stages of a joint venture transit-oriented development for 135 units, consisting of a mixture of single-family homes, duplex homes and rowhomes. While pricing has not been released, it is anticipated that new construction units will be priced in the mid-$200,000s to low-$300,000s.
Of its current projects, Mayfair Row is the newest community with several units currently available. The development consists of 14 homes divided between seven duplexes. The duplexes have a front-back orientation and share a common entrance, which Malone says creates more of a community feel. Each building has private yards and rooftop patios for residents, and units feature large clerestory windows to allow for abundant natural light.
The first four units were completed in July and DIRC was preparing to bring them to market. Early reception has been positive as DIRC recently began hosting open houses and other events for the project.
The Mayfair Row development is an example of how DIRC designs around the features of each property site. Malone says the dimensions of the property play a part in determining the best unit mix and layout.
Another influence on design is the technology that goes into each home. DIRC works with Josh Stewart of LYCEUM Company to ensure each project is fully wired and adaptable to the technology of today and tomorrow, including smart home controls of lights, heat and AV.
DIRC follows up on those technologies and individual home amenities with strong customer service for each homeowner. Before closing, the company conducts a walkthrough with the new homeowner, during which it covers the warranty process and supplies the resident with a manual of tips and suggestions to help maintain the home. Additional walkthroughs are held after 11 months to ensure everything is working properly and there are no structural issues.
If a problem does arise, DIRC offers 24/7 emergency response. “We focus a lot of our time and energy on the end-consumer and bringing that professionalism and detail,“ Derenne states.
The appeal of the outdoor lifestyle is bringing more residents – and more potential homebuyers – into the Denver area, but it’s also adding competition to the industry. “There is more opportunity, but at the same time it’s more difficult to find land for these projects,“ Malone says.
“Getting deals done in Denver is becoming tougher and tougher. Relationships and connections are vital,“ he adds. “Not only with subcontractors but with the cities and municipalities.” DIRC’s reputation and Malone’s networking abilities have enabled the company to form valuable relationships with city officials and utility providers, helping the company move through the approvals process more efficiently.
DIRC Homes success in navigating changes in the Denver market has it anticipating another year of doubling revenues. “That’s a challenge but a welcome challenge for us – trying to grow responsibly,“ Malone says.
It’s the employees whom the company believes have the biggest impact on its growth. “Our people are the most important part of our successes,” Malone says.