Posted at 3:59 PM on November 17, 2011
by Annie Baxter
A major name in the Minnesota homebuilding industry is winding down its business and planning to liquidate.
Rottlund Homes is liquidating its assets because of sluggish demand for new homes and difficulty procuring loans from banks, according to chief financial officer Steve Kahn:
"The bank syndicate we currently have no longer wanted to support the housing market," Kahn said, "and really there are no banks that want to invest in private homebuilders. So they felt it best if they just sold off the remaining assets that the company has."
The company largely builds townhomes. Kahn says at its height in 2005 or so, Rottlund used to do $350 million in sales, but that's dropped off to about $50 million.
The company's peak employment exceeded 200 workers spread across offices in Minnesota, Florida, and Iowa. Now only 18 workers remain.
Kahn says Rottlund is completing all the remaining homes under construction:
"It's not like we're going out of business tomorrow. All the subcontractors that are completing those homes will get paid. We hope to sell those remaining homes. There are about 30 homes that we have left to sell in the Minnesota market," Kahn said.
Rottlund must also sell off its finished lots and raw land. If it's not possible to do so, Kahn says the bank would likely foreclose on those assets.
According to the company's web site, Rottlund Homes is one of the industry's largest privately-held homebuilders and land developers operating in the Twin Cities. Rottlund started building homes in 1973.