Last week, Pulte Homes announced in a $1.3 billion all stock acquisition of Centex homes. Pulte, which has an extensive Active Adult Community portfolio through its DelWebb brand, sees the merger creating opportunities for “move ups” from Centex’s more entry level products into Pulte’s DelWebb communities.
Homebuilders are a large part of the senior housing equation and they currently share a common problem with assisted living, CCRCs and nursing homes: lack of cash. In order to survive, both senior housing operators and builders have been hoarding cash and with no convincing signs of recovery, both groups will begin burning through that cash soon.
Much of the cost savings the Pulte/Centex merger will be the elimination of offices and headquarters that overlap in both area and function. Will other senior housing participants look at this merger as the blue print to save more cash and weather the economy?
