Heated Housing Market
WCI specialized in luxury and second homes and had solid growth since its founding reaching a height of $2.6B in sales and $186M in profit in 2005. They were sharply affected by the 2005 real estate downturn. Several factors contributed to their need to reorganize. First, a significant portion of their business was in high rise towers. Once construction is started on high rise towers, it is difficult to cease construction and thereby control cost. Second, WCI speculated on large land purchases, carrying large debt on land that was subsequently devalued. Third, their regular (non-tower) communities had large unsold inventories that were also devalued during the downturn. Eventually, the debt was too large to carry with their operating revenues and they filed for Chapter 11.
Read more about this topic: WCI Communities
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—Agnes E. Meyer (1887–1970)