Foxlane Homes is on a trajectory for soaring growth.
Launched by Joe Morrissey, a 20-year veteran of public builder NVR, in July 2017, the Warrington, Pennsylvania–based company built its first model by December 2017 and then sold 30 homes in 2018. The company projects 42 sales in 2019 and plans to grow to around 65 sales in 2020 before settling to around 85–90 sales a year.
Morrissey has found a successful niche in his suburban Philadelphia market, competing with the larger national builders but offering the service, customization, and standard offerings of a smaller custom builder. He builds single-family homes, twins, and townhomes starting in the low $400s but ranging to over $1 million. “We don’t look to 100 percent customize, but we’ll take any floorplan and adjust it to the family’s lifestyle, how the home will work for them,” Morrissey says.
Foxlane also differentiates itself by seeking land in A or A+ locations, with good schools, proximity to transportation, and a short commute to Philadelphia. But in many of these locations, getting access to natural gas is becoming increasingly costly and burdensome. “Sometimes townships don’t want growth,” Morrissey says, “so they’re not pushing for utilities” such as natural gas or sewer. “The cost to run natural gas to some of those locations, even though they’re in really good locations, close to urban areas, the cost of natural gas is so high that propane is a really good alternative in that situation.”
The builder turns to propane in part because going all-electric is simply not an option for the company’s market and price point, says Michael Long, Foxlane’s production manager. “We’re providing a high-end, semi-custom product, and when you’re dealing with the customers at that type of level, you definitely need to be able to supply a good fuel source for not only efficiency but also for the type of appliances they want,” Long says. “You can’t sell a $1 million home and have electric cooktops. It doesn’t fly in this market. So the best choice for us is to go with propane.”
Fueling in-demand options
The 10-home Anderson Preserve community is an illustrative example. Located in a desirable location 10 minutes from Newtown borough and with excellent schools, the community offers homes averaging about 4,000 square feet and priced a little over $1 million.
“It’s a neighborhood that if we didn’t have propane it probably wouldn’t have made sense for us to build in it,” Morrissey says. “The cost of natural gas in this neighborhood wouldn’t have made sense, and then the option to do electric, you just wouldn’t sell a house.” Buyers expect gas for cooking, heating, water heating, fireplaces, and, in this neighborhood, outdoor living. “Most customers will ask to do a rough-in for a propane line right out the back of the house, with the thought that they are going to do an outdoor kitchen somewhere on the patio, an outdoor fireplace, or even to the next level, if they’re going to do an in-ground pool and they’ll plan to heat that as well.”
Propane-fueled space heating is a particularly important feature to be able to offer, Morrissey says. Foxlane’s homes typically have two furnaces — one in the basement and one in the attic. “Gas heating is really important,” he says. “Especially in the Philadelphia market, it tends to get cold in the wintertime. With the gas heat, it’s a warmer heat, it feels better, and customers absolutely expect it. It’s more efficient, and it’s definitely better for the environment.”
Propane is also vital in the builder’s options process, giving buyers the flexibility to add fireplaces, tankless water heaters, and whole-house generators, a popular choice for customers seeking to protect their homes from power outages and flooding. “Any typical customer could look at 8–9 different communities within a 30-minute drive on a Saturday or Sunday,” Morrissey says. “And when they come in, I have one shot to make that impression on them to potentially get them to build one of our homes.” Having those propane options available is an important part of that experience.
A land development deal maker
As Foxlane evaluates future land opportunities, Morrissey says his experience and familiarity with propane provides him with flexibility when it comes to product type, density, and especially the financial viability of a project. In one upcoming project, for example, the cost to bring natural gas to the site is $232,000, making propane an attractive alternative.
“From a financial standpoint, just the cost savings that we have with propane over natural gas is a huge win when you’re trying to make the numbers work,” Morrissey says. “Sometimes the cost of propane is the difference between being able to do a development or not do a development.”
He also knows that building large, dense communities doesn’t rule out propane as an option. While at NVR, Morrissey oversaw the construction of several hundred townhomes and small-lot homes at Carriage Hill (alongside townhomes and condo units from Cornell Homes). The development used a community propane system with 52 tanks distributed in common spaces throughout the community and individual meters at each home.
“The home sites were small, so trying to put individual tanks on individual lots just wasn’t feasible,” Morrissey says. “But having the propane farm allowed us to be able to get more home sites in the neighborhood, more overall density in the overall neighborhood. The customers didn’t know any difference between having natural gas or propane.” And because the propane retailer absorbed the cost of the system, it offered savings of more than $500,000 compared with natural gas, Morrissey says.
The cost to bring natural gas to new neighborhoods in Foxlane’s market has become higher over the past 10 years. Whereas natural gas used to be standard practice, now it’s closer to 50/50 whether to pay for natural gas or install propane, Morrissey says. “The thing with propane vendors is you call them on a Tuesday, they’re out on a Friday, and there’s no other cost for it. They hook everything up and it’s a win-win. It’s a win for us; it’s a win for our homeowners. It’s a logical solution for us.”