Middlefork LLC

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The recession gave Middlefork LLC space to grow within Chicago’s luxury home market.

By Tim O’Connor

Probably no industry was hit as hard by the Great Recession and the subprime mortgage crisis as America’s homebuilders. The Economic Census, a measure of American businesses conducted by the U.S. Census Bureau, shows the number of residential construction businesses fell from 98,067 in 2007 to 48,557 in 2012 – a 50 percent drop in just five years.

That was not a good time to start a homebuilding business. But the difficulty of the market did not deter Andy Bowyer, founder and managing director of Chicago’s Middlefork LLC, who saw an opportunity in the luxury market where other builders had failed. “I’m typically a pretty risk-averse person, so there was definitely anxiety about the whole thing,” Bowyer says. “But no risk, no reward.”

Creating Advantage

Bowyer worked in the architectural industry for six years before moving into professional services consulting for 14 years. Despite the career change, he wanted to eventually get back into home design. “It had always been my goal to combine architecture and business into a career,”middlefork Bowyer says.

The Great Recession provided that chance. While the market as a whole struggled in 2008, Bowyer noticed there was still demand for luxury housing - but a low supply in the Chicago area. Many luxury builders went out of business because their financial models could not cope with the sudden drop in buyers and tighter lending habits.

That left a vacancy for a new company to fill, leading Bowyer to start Middlefork. “I found a place with demand without supply,” he says.

Although he had a plan, Bowyer still faced the challenge of starting a new building company during the nationwide housing collapse. However, he possessed a few advantages over other builders. Many established companies were saddled with the falling values of properties they had previously acquired but could not develop.

Middlefork, on the other hand, was able to buy distressed land cheaply, allowing it to pass that savings along to the eventual buyer with a more economic sales price. Further, the company was backed by an investor and could bid for properties with cash, giving it an edge over builders that relied on tumultuous bank lending. “Cash was king” during those days, Bowyer explains.

Custom Approach

Middlefork has built homes in some of Chicago’s most upscale neighborhoods such as Lincoln Park and Lakeview, along with rehab projects along the suburban North Shore. The historic and dense nature of those communities creates a challenge to building new homes.002

That is especially true in Lincoln Park, where community groups are often resistant to development and change.  Things like reduced side yards (leading to wider homes), raised rear yards (enabling easier inside/outside living) and connected garages (providing security and protection from Chicago’s often harsh weather) are often a challenge to achieve. All are features which many would-be homeowners desire in their luxury homes. The difficulty in obtaining these amenities has made it more difficult to build luxury spec and custom homes, Bowyer says.

To stand out in those communities and meet building code and requirements, Middlefork takes a custom design approach to its spec homes. It’s the only way, Bowyer says, to achieve the fine interiors, energy efficient technology and modern equipment that luxury buyers demand.

“Everything is done unique for that site,” Bowyer says. “We never repeat a floor plan, we never repeat a façade. We’re trying to be contextual for the micro environment.”

Middlefork’s Chicago homes tend to be transitional in style, with exteriors that mimic features and materials from the surrounding neighborhood, but featuring open interiors and features such as high-efficiency variable speed furnaces that allow homes to be heated in multiple zones. “We can make it all harmonious, we can make it all fit together,” Bowyer says, “but we can also respond to the individual consumer.”

Technology is an important selling point in every home Middlefork builds. Since starting the company a decade ago, Bowyer has pre-wired every project for smart home compatibility. The setup is flexible enough so that customers can configure their home using specialized phone apps dedicated to features such as security and audio, or all of the smart components could be tied into one governing system.

“The technology for that has evolved over the years,” Bowyer says. “We still pre-wire for everything so it can all be connected, but there’s even more technology now, like light bulbs that function as speakers.”

Middlefork builds homes in the multimillion-dollar price range. As of the end of June, the company had two homes on the market: one was listed at $4.3 million and the other $4.5 million. The typical buyer works in the financial industry, is in their early 40s and has young children.

“What I think really distinguishes them is they are very savvy about the market,” Bowyer says of his customers. “All of them are considering not just what they want but what they need for resale.”

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A buyer may not need a built-in elevator for themselves, or plan on sending their children to the local public school, but they still want the home to be built so that an elevator could be easily added in the future and they want to be located near one of the city’s premier schools.

One customer, for example, had Middlefork design their home with a large second floor closet that could be converted into a fourth bedroom by the next owner. Those kinds of factors will make it a more appealing buy when the homeowner eventually decides to move on. “They want to make sure they aren’t boxing themselves out of the market when they go to sell,” Bowyer says.

Middlefork can create these solutions because its small size allows Bowyer to get to know every customer personally. When it started, the company was small and cautious, often only building one spec home at a time. While it has grown, it has intentionally stayed boutique.  “Today we tend to focus on about two custom home projects and one spec home at a time,” Bowyer says.  “This model has been preserved so that I can stay involved in each of the projects.”

Ten years later, Middlefork continues to follow the same hands-on approach. Bowyer is the only full-time employee of the company, forcing him to contract out the architecture, landscaping and building work. But it also means he works directly on every home. “I don’t see it growing to a point where I can’t be involved in every project,” he says. “I’m a little bit of a control freak. But in this business, I think that’s a good thing.”

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