NEWPORT BEACH, CA—It's unique for a smaller company like Trumark Cos. to have several platforms including urban, home-building and selling of improved lots to other builders, Peter Kiesecker, COO for the firm's new platform, tells GlobeSt.com. Trumark recently announced it has created a residential-land-development platform, Trumark Communities, which is capable of acquiring, developing and selling improved lots primarily to third-party builders. Kiesecker, a former executive at Standard Pacific Homes with more than 25 years of experience in the real estate industry, has been tasked with leading the new division. We spoke exclusively with Kiesecker about his new role at the firm, trends he's seeing in master-planned communities and why selling improved lots to third-party builders makes sense for his company.

GlobeSt.com: What do you hope to accomplish in your new role at Trumark?

Kiesecker: Trumark can be defined as both a developer and a builder, which is a really important distinction. Trumark not only has a building component, but it has also been successful in California at entitling properties so that they can be improved upon or sold to other builders. We want to expand on the development side of the business, which includes master-planned communities, but we would sell a portion of them to other builders while also having a platform for a home-building operation as well. That's what I'm excited about—not only helping to grow our business, but helping others do the same through our master-planned communities.

GlobeSt.com: What are the most-important trends you're seeing in today's master-planned communities?

Kiesecker: A current trend is a flight to quality. I don't know if anyone has a good enough crystal ball to say where we are in this cycle, but most builders say they feel we're past the halfway mark in this cycle. We're looking for master plans in better locations or that have a unique story. We focus on A locations in Northern California and B locations a little further out from there, but still in job-growth areas. They must be either in a great location or have something unique about the property that can create its own demand—not just a cookie-cutter community. That's what we target in our approval stage. It goes back to what you consider excellence. In Orange County, pretty much anything is going to sell, but I think if you have those unique qualities, something different, whether you rent or buy, it's a great compelling story. We still look for unique stories even in high-demand markets so we can raise prices and do better among our competition. We're not here to close 7,000 homes a year; we really do try and seek out things that are going to be profitable and really unique for buyers.

GlobeSt.com: How does selling improved lots to third-party builders make sense for your firm?

Kiesecker: It goes to diversification. In a master plan, you're dealing with 500 to 1,000-plus lots, and to get the necessary absorption in a cycle, you probably have to do it in two phases, with each phase of four to five unique neighborhoods being sold at the same time. We generally like the upper-end, move-up market, which leaves the first-time market to builders who do that better than we do. That's why we sell to other builders who have that focus.

GlobeSt.com: What else should our readers know about Trumark Cos.?

Kiesecker: It's unique for a smaller company like us to have several platforms. We have an urban platform that's been very successful in Downtown San Francisco and Downtown L.A., where we have 20- to 30-story high-rises doing really well. We also have the home-building side. We see opportunity in the third leg of our structure even when the economy slows, because when that happens most builders won't go to bigger positions in master-planned communities; they get small and take 50- to 100-unit communities. So it's the right time for us to buy bigger communities. We really hope the buy side will be big for us in the next few years, even with a potential downturn in the economy.

As for what we're looking to acquire in the next few years, right now in Northern and Southern California, we have two operations for master-planned communities. We want to build that up more, but next year we want to expand into the Southwest and Sunbelt states. I've focused historically on Arizona, Nevada, Texas, Florida and the Carolinas—those are really good markets for master-planned communities, and they are likely expansion areas. But, of course, we'd also like to be an hour or two by plane for our first market and then look to the others after that.