Green Brick Partners, Inc. (GRBK)

[Enterprising Investor]

Q&A with David Einhorn & Jim Brickman: Homebuilder’s CEO, chairman discuss M&A, future plans (11/06/15)

By Candace Carlisle

The Green Brick Partners entity was once an ethanol-producing firm. How did it transition?

Einhorn: Green Brick Partners was never in the energy industry. The publicly traded shell was a biofuel company, which was a business that did not succeed and the assets were turned over to the lenders and as a result, was a publicly traded shell with a tax asset, which was ultimately merged by buying Green Brick Partners and became a public company a year ago.

What kind of real estate do you sell?

Brickman: Our average selling price is $430,000 and that’s where the bell curve of buyers is. We generally build more upscale product in each price point, which we call lifestyle product.

How much money do you have earmarked for M&A activity right now?

Brickman: Because we are unleveraged, we have the ability to do significant M&A activity if we chose to do so.

Einhorn: I think the strategy is flexible and it’s a question of what opportunities will come. I think the business started as pretty much nothing just six years ago. Jim and his team have built it into a really substantial operation already with just terrific positions in two markets and if the opportunities exist to expand into other markets the company would like to do that. If it doesn’t materialize, and we simply grow out our operations in the markets we’re already in, I think that will be very attractive as well.

Why did you come back to the Dallas real estate community after retirement?

Brickman: Really it was the opportunity to work with David and his team at Greenlight, which wasn’t in homebuilding. I really enjoyed working with David and I thought it was a great way to finish my career.

Do you have any plans to buy or purchase an equity stake in any new builders?

Brickman: I think the best way to describe that is we are going to deploy capital wherever we think it’s most profitably deployed and that’s one alternative we are looking at right now.

What does the future hold for Green Brick Partners?

Brickman: We have the opportunity to do a lot more than we are doing right now because of our balance sheet, but we are prudently looking at all those alternatives.

Einhorn: We are seven years into this investment and I think we’re just getting going.

Green Brick has flown under the radar for the past few years. Has this hurt you in growing a new company?

Brickman: Now that we’re a public company, it’s our débutante party. But those relationships have been there for decades.

http://www.bizjournals.com/dallas/print-edition/2015/11/06/q-a-with-david-einhorn-jim-brickman-homebuilder-s.html