Tacoma-based Harbor Custom Development shuffles top execs amid tough economic times
Tacoma-based Harbor Custom Development on Thursday announced its founder and CEO Sterling Griffin is stepping down in July and other changes were ahead for top leadership positions in the company.
In a news release, Harbor said that Griffin, also the company’s president and chairman of its Board of Directors, “will be retiring from all roles with the company effective July 12.”
It added that Griffin “will serve as a non-executive strategic advisor through January 12, 2025.”
Harbor’s chief operating officer, general counsel and corporate secretary Jeff Habersetzer, is expected to be named interim CEO and interim president, to start upon Griffin’s departure, according to the release.
Habersetzer “brings an extensive background in the real estate industry and previously owned a legal practice specializing in real estate and corporate law,” the release added.
Griffin on Thursday thanked everyone who’d been connected to the company. “I am confident in the direction and future of the company under Jeff’s leadership,” he said in the release.
Karen Bryant, lead independent director with Harbor, said in the release, “The Board appreciates Sterling’s vision in the development of Harbor since its inception. He has been instrumental in driving our vision, strategy, and direction toward achieving growth. The Board is thankful for his continued support as a strategic advisor.”
Harbor’s chief financial officer Lance Brown is expected to move into an expanded role of interim chief operating officer along with his current role.
Griffin founded Harbor Custom Development in 2014. The company, formerly based in Gig Harbor, moved its headquarters to Tacoma last year. He told The News Tribune at that time the company’s rapid growth sparked the move.
The publicly traded company last year finished Pacific Ridge, 8445 Pacific Ave. in Tacoma. It was initially developed as condominiums, later switching to apartments.
The company also made headlines in early 2022 when it announced it would accept cryptocurrency for real estate payments for its product line: single-family homes, condos, land, apartment projects, with a third-party business handling the conversion.
“As a company we don’t take any risk associated with the volatility of the cryptocurrency. Whatever the price is, that’s the amount we get into U.S. dollars,” he said then.
Griffin noted at that time, “Right about the time we announced it, the cryptocurrency market took a pretty major hit.”
In April 2022, the company put six of its area properties on the market for a combined value of $278 million, including Pacific Ridge in Tacoma.
Two of the sites so far have attracted buyers.
On Wednesday, the company announced the buyer of one was waving contingencies in its contract to buy the 36-unit Mills Crossing townhomes in Bremerton. The buyer, Kitsap Community Resources, released its $400,0000 of non-refundable earnest money to Harbor in the $14.25 million deal. In April, it announced its Bridge View Trail apartment site was under contract for $11 million. That site was also one of the six properties marketed last year.
The company last year also announced intent to develop an approximately 200-unit luxury waterfront-view apartment property in Tacoma. The News Tribune identified the site as the 200 block of Broadway on undeveloped parcels next to Sky Terrace Condo, with views of the Port of Tacoma and waterfront.
Griffin at that time said, “The project will be our first pedestal-style apartment in an urban setting. In our opinion, it is a class A location that when completed, will garner top-of-the-market rents.”
For all its progress pivoting into multifamily housing developments, the company’s fourth quarter and full year earnings took a hit amid broader economic real estate forces in play.
It saw sales of $4.8 million compared with $26.3 million in the same period for 2021 and reported a gross loss of $5 million compared with a gross profit of $10.9 million a year earlier. For the full year, it reported sales of $55.4 million compared with $72.4 million in 2021 and a gross loss of $500,000 compared with gross profit of $21.9 million a year earlier.
“Our fourth quarter and full-year 2022 results came in below internal expectations,” Griffin said in a release announcing the results at the end of March. “Challenges in the market environment include supply chain disruption contributing to delays in the construction of multifamily projects, rising interest rates, and overall decreased buyer demand. Despite these challenges, we made strategic progress transitioning focus toward our multifamily projects to help offset the impact of the fastest interest rate increase cycle since the 1980s.”
Shares of the company closed Thursday at $8.72. Its 52-week high of $49.40 was reached nearly a year ago, according to MarketWatch.
Soon-to-be new interim leader Habersetzer said in Thursday’s release, “As we move forward, my top priority is to get us back on the path to stability and restore public trust in the HCDI brand. Our business objectives are within reach, and by utilizing our current and future asset base, I am confident in our ability to increase shareholder value.”
The News Tribune archives contributed to this report.
