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What changed in Green Brick Partners, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Green Brick Partners, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+223 added−212 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-29)

Top changes in Green Brick Partners, Inc.'s 2024 10-K

223 paragraphs added · 212 removed · 180 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

46 edited+12 added−9 removed30 unchanged
Biggest changeCommunity sales managers are trained by us and generally have had prior experience selling new homes in the local market. Our personnel, along with subcontracted marketing and design consultants, carefully design the exterior and interior of each home to appeal to the lifestyles of targeted homebuyers. We also sell homes through independent realtors.
Biggest changeTo ensure our homes appeal to the lifestyles of targeted buyers, we collaborate with marketing and design consultants to carefully craft the exterior and interior designs of each home. In addition to our in-house sales team, we also work with independent realtors to sell our homes. We offer homeowners a comprehensive warranty on each home.
We currently intend to pursue targeted expansion of our entry-level builder, Trophy Signature Homes, into markets within our current states. We believe Trophy’s more affordable product and quicker inventory turns make its platform uniquely scalable to expand outside of the DFW metroplex.
We currently intend to pursue targeted expansion of our entry-level builder, Trophy Signature Homes (“Trophy”), into markets within our current states. We believe Trophy’s more affordable product and quicker inventory turns make its platform uniquely scalable to expand outside of the DFW metroplex.
We partner our expertise with that of our builders to design attractive neighborhoods and homes to appeal to a wide variety of potential homebuyers. Our homebuilding projects include single family homes, townhomes, luxury homes, and patio homes.
We partner our expertise with that of our builders to design attractive neighborhoods and homes to appeal to a wide variety of potential homebuyers. Our homebuilding projects include single family homes, townhomes, condos, luxury homes, and patio homes.
We are focused on creating environmentally sustainable products, and our purchasing power enables us to include green features in our homes.
We are focused on creating environmentally sustainable products, and our purchasing power enables us to include green-friendly features in our homes.
ITEM 1. BUSINESS Green Brick Partners, Inc. and its subsidiaries (“Green Brick”, “the Company”, “we” or “us”) is a diversified homebuilding and land development company. We acquire and develop land and build homes through our seven brands of builders in four major markets.
ITEM 1. BUSINESS Green Brick Partners, Inc. and its subsidiaries (“Green Brick”, “the Company”, “we” or “us”) is a diversified homebuilding and land development company. We acquire and develop land and build homes through our seven brands of builders in three major markets.
Our homebuilder operations consist of our division employees, led by management with significant homebuilding experience and who possess a depth of knowledge in their particular markets, and include employees responsible for the design, construction oversight, marketing, and sales of our homes.
Our homebuilder operations consist of our division employees, led by management with significant homebuilding experience and who possess a depth of knowledge in their particular markets, and include employees responsible for the design, construction scheduling, marketing, and sales of our homes.
With the exception of a normal cancellation rate, we expect all of the backlog as of December 31, 2023 to be delivered during 2024. The following table sets forth the information about selling communities and backlog of our builders.
With the exception of a normal cancellation rate, we expect all of the backlog as of December 31, 2024 to be delivered during 2025. The following table sets forth the information about selling communities and backlog of our builders.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the 6 TABLE OF CONTENTS Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
In addition, we have traditionally, and may in the future, grow through the acquisition of homebuilders in our current markets or other markets that meet our demographic and economic growth criteria.
In addition, we have historically, and may in the future, grow through the acquisition of homebuilders in our current markets or other markets that meet our demographic and economic growth criteria.
We continuously review the allocation of our investments in these markets taking into account demographic trends and the likely impact on our operating results and will reallocate our investments when necessary. • Deliver Superior Designs, Broad Product Ranges and Enhanced Homebuying Experience.
We continuously review the allocation of our investments in these markets, taking into account demographic trends and the likely impact on our operating results and will reallocate our investments when necessary. 1 TABLE OF CONTENTS • Deliver Superior Designs, Broad Product Ranges and Enhanced Homebuying Experience.
Our ability to deliver our homes is dependent on the availability and quality of the subcontractors, such as electricians, plumbers, drywall installers, and bricklayers with whom we partner to build our homes. We do not have collective bargaining agreements relating to any of our employees.
Our ability to deliver our homes is dependent on the availability and quality of the 5 TABLE OF CONTENTS subcontractors, such as electricians, plumbers, drywall installers, and bricklayers with whom we partner to build our homes. We do not have collective bargaining agreements relating to any of our employees.
Our Builders and Homes The following table presents general information about each of our builders, including the types of homes they build and their price ranges as of December 31, 2023.
Our Builders and Homes The following table presents general information about each of our builders, including the types of homes they build and their price ranges as of December 31, 2024.
As of December 31, 2023, we believe our extensive land and lot inventory will allow us to maximize our profitability and return on capital. In DFW, Austin, and Atlanta, we seek to acquire land with convenient access to metropolitan areas which have diverse economic and employment bases and demographics that we believe will support long-term growth.
As of December 31, 2024, we believe our extensive land and lot inventory will allow us to maximize our profitability and return on capital. In DFW, Austin, Houston, and Atlanta, we seek to acquire land with convenient access to metropolitan areas that have diverse economic and employment bases and demographics that we believe will support long-term growth.
We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings, and other market factors.
We typically experience the highest new home order activity in spring and early summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings, interest rate volatility, and other market factors.
In consultation with 1 TABLE OF CONTENTS nationally and locally recognized architecture firms, interior and exterior consultants, and homeowner focus groups, we research and design a diversified range of products for various levels and price points. • Disciplined Investment Strategy Combined with the Prudent Use of Leverage.
In consultation with nationally and locally recognized architecture firms, interior and exterior consultants, and homeowner focus groups, we research and design a diversified range of products at various levels and price points. • Disciplined Investment Strategy Combined with the Prudent Use of Leverage.
Our centralized management sets our strategy and leads decisions related to our land acquisition, national purchasing, marketing analytics, risk management, finance, cash management, capital allocation, human resources management, and IT support for our builders.
Our centralized management sets our high level strategy and leads decisions related to our land acquisition, national purchasing, marketing analytics, risk management, finance, accounting and audit, cash management, capital allocation, human resources management, and IT support for our builders.
Each new home we build is healthier and more energy efficient, and has less impact on the environment than prior generations of homes as a result of features like: • Low-VOC paint that reduces pollution; • WaterSense® faucets that reduce water flow without sacrificing performance; • Low-E windows that reduce infrared and ultraviolet light coming into the home; and • Energy Star® appliances that reduce energy consumption.
Many of the new homes we build are more energy efficient, and have less impact on the environment than prior generations of homes as a result of features like: • Low-VOC paint that reduces pollution; • WaterSense® faucets that reduce water flow without sacrificing performance; • Low-E windows that reduce infrared and ultraviolet light coming into the home; and • Energy Star® appliances that reduce energy consumption.
We offer our employees a compensation package with a broad range of company-paid benefits, including medical, dental, life insurance, a 401(k) plan, and other health and welfare plans we believe are competitive. 5 TABLE OF CONTENTS We believe having a diverse and inclusive work environment, where everyone has a sense of belonging, not only drives engagement but fosters innovation, which is critical to driving growth.
We offer our employees a compensation package with a broad range of company-paid benefits, including medical, dental, life insurance, a 401(k) plan, and other health and welfare plans we believe are competitive. We believe having a diverse and inclusive work environment, which not only drives engagement but fosters innovation, which is critical to driving growth.
Our website and the information contained or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K. 6 TABLE OF CONTENTS
Our website and the information contained or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K.
We act solely as a general contractor, and all construction operations are coordinated by our project managers and field superintendents who schedule and monitor the progress of third-party independent subcontractors.
We act solely as a general contractor, and all construction operations are coordinated by our project managers and field superintendents who schedule and monitor the progress of third-party independent subcontractors who are responsible for performing the work at our job sites.
We have chosen to focus our operations on sunbelt and sunbelt-adjacent states because we believe these markets offer attractive residential real estate investment characteristics, such as growing economies, improving levels of employment, population growth relative to national averages, favorable migration patterns, general housing affordability, and desirable lifestyle and weather characteristics.
We have chosen to focus our operations on sunbelt states because we believe these markets offer attractive residential real estate investment characteristics, such as growing economies, improving levels of employment, population growth relative to national averages, favorable migration patterns, general housing affordability, and desirable lifestyle and weather characteristics. We currently generate income from home sales in Texas, Georgia, and Florida.
We currently generate income from home sales in Texas, Florida, and Georgia. In 2023, Texas, Florida and Georgia were ranked first, second and fourth, respectively, in terms of population growth according to the U.S. Census Bureau. • Strategically Increase Market Positions in our Existing Markets. We believe there are significant opportunities to profitably expand in our core markets.
In 2024, Texas, Florida and Georgia were ranked first, second and seventh, respectively, in terms of population growth according to the U.S. Census Bureau. • Strategically Increase Market Positions in our Existing Markets. We believe there are significant opportunities to profitably expand in our core markets.
We plan to expand Trophy into markets compatible with our existing markets that demonstrate strong trends in demographics, employment, and in-migration by leveraging existing relationships with land developers and homebuilders. In this regard, in 2023 we continued our expansion into the Austin, TX market, which began in 2022.
We plan to expand Trophy into markets compatible with our existing markets that demonstrate strong trends in demographics, employment, and in-migration by leveraging existing relationships with land developers and homebuilders. In this regard, in 2024 we continued our expansion into the Austin and the Houston, Texas markets.
We seek to maximize value over the long term and operate our business to mitigate risks in the event of a downturn by controlling costs and quickly reacting to regional and local market trends.
We seek to not only maximize value over the long term but to mitigate risks in the event of a downturn by minimizing leverage, controlling costs, and quickly reacting to regional and local market trends.
Most are standard items carried by major suppliers. However, a rapid increase in the number of homes started could cause shortages in the availability of such materials or in the price of services, thereby leading to delays in the delivery of homes. We continue to monitor the supply markets to achieve the best prices available.
However, a rapid increase in the number of homes started could cause shortages in the availability of such materials or in the price of services, thereby leading to delays in the delivery of homes. We closely monitor the supply markets to achieve the best prices available.
In response to our customers’ expressed desire for an expedited and transparent sales process, we offer a selection of homes with simplified, all-upgrades-included options. Our Trophy Signature Homes and CB JENI X lines have been at the forefront of creating a straightforward sales experience that offers simplified solutions with top-of-the-line finishes regardless of a homebuyer’s price range.
In response to our customers’ expressed desire for an expedited and transparent sales process, we offer a selection of homes that include curated features and upgrades. Our Trophy Signature Homes and CB JENI lines have been at the forefront of creating a straightforward sales experience that offers simplified solutions with upscale finishes.
Our land teams focus on acquiring well located land that will position us to deliver future earnings growth in 2024 and beyond. As of December 31, 2023, we had 28,681 lots owned and controlled.
Our land teams focus on acquiring land in desirable locations that will position us to deliver future earnings growth in 2025 and beyond. As of December 31, 2024, we had 37,831 lots owned and controlled.
Homes are generally covered by a six to ten-year warranty for structural concerns, one year for workmanship issues and products used, and two years for electrical, plumbing, heating, ventilation, and air conditioning systems.
Homes are generally covered by a six to eight-year warranty for structural concerns, one year for workmanship issues and products used, and two years for electrical, plumbing, heating, ventilation, and air conditioning systems. Our marketing strategies integrate both traditional and digital channels.
At December 31, 2023, we had approximately 600 full-time employees, including approximately 550 who were involved in our homebuilding operations, with locations in Dallas-Ft. Worth and Austin, Texas, Atlanta, Georgia, and Treasure Coast, Florida, and approximately 50 in management and administration. Our operations are carried out through both local and centralized management.
As of December 31, 2024, we had approximately 650 full-time employees, including approximately 550 who were involved in our homebuilding operations, with locations in DFW, Austin and Houston, Texas, Atlanta, Georgia, and Treasure Coast, Florida, and approximately 100 in management and support services. Our operations are carried out through both local and centralized management.
Builder* Ownership Market Products Offered Price Range Trophy Signature Homes LLC (“Trophy”) 100% DFW and Austin Single family $260,000 to $1,100,000 CB JENI Homes DFW LLC (“CB JENI”) 100% DFW Townhomes $270,000 to $640,000 Normandy Homes (“Normandy”) 100% DFW Single family $460,000 to $910,000 SGHDAL LLC (“Southgate”) 100% DFW Luxury homes $790,000 to $1,880,000 CLH20 LLC (“Centre Living”) 90% DFW Townhomes and Single Family $340,000 to $710,000 The Providence Group of Georgia LLC (“TPG”) 50% Atlanta Townhomes, Condominiums and Single Family $390,000 to $1,260,000 GRBK GHO Homes LLC (“GRBK GHO”) 80% Treasure Coast Patio homes and Single Family $370,000 to $2,100,000 * The Company sold its 49.9% ownership interest in GB Challenger, LLC (“Challenger”) effective February 1, 2024. 2 TABLE OF CONTENTS Our backlog reflects the number and value of homes for which we have entered into sales contracts with customers but we have not yet delivered the home.
Builder Ownership Market Products Offered Price Range Trophy Signature Homes LLC (“Trophy”) 100% DFW and Austin Single family Low $200s up to $800s CB JENI Homes DFW LLC (“CB JENI”) 100% DFW Townhomes Mid $200s to mid $600s Normandy Homes (“Normandy”) 100% DFW Single family Mid $400s to over $1 million SGHDAL LLC (“Southgate”) 100% DFW Luxury homes High $700s to over $1.8 million CLH20 LLC (“Centre Living”) 90% DFW Townhomes and Single Family Mid $300s to mid $800s The Providence Group of Georgia LLC (“TPG”) 50% Atlanta Townhomes, Condominiums and Single Family Mid $300s to over $1.2 million GRBK GHO Homes LLC (“GRBK GHO”) 80% Treasure Coast Patio homes and Single Family High $300s to over $2.1 million 2 TABLE OF CONTENTS Our backlog reflects the number and value of homes for which we have entered into sales contracts with customers but we have not yet delivered the home.
Our core markets are in the high growth U.S. metropolitan areas of Dallas-Fort Worth (“DFW”) and Austin, Texas, and Atlanta, Georgia, as well as the Treasure Coast, Florida area.
Our core markets are in the high growth U.S. metropolitan areas of Dallas-Fort Worth (“DFW”) and Austin, Texas, and Atlanta, Georgia, as well as the Treasure Coast of Florida area. We have begun land acquisition activities in Houston, Texas and plan to commence home construction and sales during 2025.
Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occur during the third and fourth quarters. We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry.
Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occur during the third and fourth quarters.
We target a debt to total capitalization ratio of approximately 30%, which we expect will continue to provide us with significant additional growth capital. As of December 31, 2023, our debt to total capitalization ratio was 21.1%. • Targeted Expansion into Adjacent Markets.
With the increases in short-term and long-term rates, we have reduced our targeted debt to total capitalization ratio to approximately 20%, which we expect will continue to provide us with significant additional growth capital. As of December 31, 2024, our debt to total capitalization ratio was 17.2%. • Targeted Expansion into Adjacent Markets.
Through our rigorous national underwriting program, we seek to identify attractive properties that are typically located in prime neighborhood locations or in preferred growth corridors. We focus on the development of entitled parcels in communities where we can generally sell all homes within 24 to 72 months from the start of sales.
Through our rigorous national underwriting program, we seek to identify attractive properties that are typically located in prime neighborhood locations or in preferred growth corridors. We generally target entitled parcels that we develop that can begin delivering finished lots to our builder subsidiaries within 12 to 24 months from acquisition.
This has allowed us to attract more qualified and knowledgeable homebuyers and has helped us reduce our selling, general and administrative expenses as a percentage of home sales revenues.We also advertise through more traditional media on a limited basis, including newspapers, radio, other local and regional publications, and billboards where appropriate.
This approach has attracted more qualified and informed buyers, that has enabled us to improve our selling, general, and administrative expenses as a percentage of home sales revenue. While our focus is on digital marketing, we also use traditional media on a limited basis, including newspapers, radio, and regional publications, where appropriate.
Our marketing strategies utilize traditional and digital channels, which include third-party real estate listing sites, billboards, USPS mailers, ads in publications, paid search ads, remarketing, display ads, social media posts, and e-mail and text campaigns, all of which drive traffic to our builders’ websites.
These include third-party real estate listing platforms, billboards, direct mail campaigns, ads in print publications, paid search and display advertising, social media posts, and email and text campaigns, all aimed at driving traffic to our builders’ websites.
Year Ended December 31, 2023 December 31, 2023 December 31, 2022 Builder Average Selling Communities Selling Communities Backlog, Units Backlog, in thousands Selling Communities Backlog, Units Backlog, in thousands Trophy 28 30 124 $ 56,929 28 143 $ 78,840 CB JENI (1) 17 20 264 169,773 16 121 72,395 Southgate 3 4 70 77,529 4 38 44,045 Centre Living 4 5 61 32,587 3 22 12,352 TPG 21 20 142 112,675 20 111 77,431 GRBK GHO 12 12 109 105,707 9 102 84,032 Total (2) 85 91 770 $ 555,200 80 537 $ 369,095 (1) Includes Normandy Homes.
Year Ended December 31, 2024 December 31, 2024 December 31, 2023 Builder Average Selling Communities Selling Communities Backlog, Units Backlog, in thousands Selling Communities Backlog, Units Backlog, in thousands Trophy 36 37 163 $ 66,236 30 124 $ 56,929 CB JENI (1) 21 24 200 132,891 20 264 169,773 Southgate 4 5 74 84,736 4 70 77,529 Centre Living 6 6 53 32,828 5 61 32,587 TPG 20 19 99 85,367 20 142 112,675 GRBK GHO 14 15 79 93,825 12 109 105,707 Total 101 106 668 $ 495,883 91 770 $ 555,200 (1) Includes Normandy Homes.
We are a leading lot developer in our markets and believe that our strict operating discipline provides us with a competitive advantage in seeking to maximize returns while minimizing risk. As of December 31, 2023, we owned or controlled approximately 28,700 home sites in high-growth submarkets throughout the DFW, Austin, and Atlanta metropolitan areas and the Treasure Coast, Florida market.
We are a leading lot developer in our markets and believe that our strict operating discipline provides us with a competitive advantage in seeking to maximize returns while minimizing risk.
We believe we offer higher quality homes with more distinctive designs and floor plans than those built by our competitors at comparable prices. Many of our communities are located in premium locations and we seek to enhance homebuyer satisfaction by utilizing high-quality materials, and building well-crafted homes.
Many of our communities are located in premium locations and have high-end common areas and amenities. We seek to enhance our homebuyers’ experience by utilizing high-quality materials, and building well-crafted homes.
When excluding land held for future development, as of December 31, 2023, we had 20,315 lots owned and controlled. 3 TABLE OF CONTENTS Marketing and Sales Process We sell our homes primarily from models we have designed and constructed. We employ community sales managers who are paid primarily via commissions to conduct on-site sales of our homes.
When excluding land held for future development, as of December 31, 2024, we had 34,031 lots owned and controlled. 3 TABLE OF CONTENTS Marketing and Sales Process Our primary method of selling homes is through model homes that we design and construct. These model homes serve as sales offices, where our community sales managers—primarily commission-based professionals—conduct on-site sales.
Our financial service platforms help our customers bring their homebuying dreams into reality by providing mortgage and title services, allowing for a one-stop-shop solution. Through BHome Mortgage, we endeavor to have our buyers receive personal attention from their first meeting through the closing of their new home regarding their financing options.
We also retained a 49% ownership in BHome Mortgage, which substantially completed the winding down of its operations at the end of 2024. Our financial service platforms help our customers bring their homebuying dreams into reality by providing mortgage, insurance, and title services, allowing for a one-stop-shop solution.
As a result, we have launched updated plans with a focus on dedicated office spaces, home integrations with the newest technology, and the latest in energy-efficient solutions, including tankless water heaters, high-efficiency LED lighting, ENERGY STAR rated appliances, and low flow bathroom fixtures.
We believe this streamlined process and focus on operational efficiency has enabled us to adapt to changes in our homebuyers’ lifestyles. As a result, we often offer included features that reflect the latest in energy-efficient solutions, including tankless water heaters, high-efficiency LED lighting, ENERGY STAR rated appliances, and low flow bathroom fixtures.
We believe we can adapt quickly to changing market conditions and optimize performance and returns while strategically reducing portfolio risk because of our diversified product strategy. One of our core operating philosophies is to create a culture that provides a positive, memorable experience for our homebuyers.
Additionally, we are transitioning to a more spec home business model with a focus on quick move-in homes. • We believe we can adapt quickly to changing market conditions and optimize performance and returns while strategically reducing portfolio risk because of our diversified product strategy.
We tailor our marketing strategy and message based on the community being advertised and the customers being targeted. Financial Services In addition to independently branded subsidiary homebuilders, Green Brick Partners retains 100% ownership in Green Brick Title and 49% ownership in BHome Mortgage.
Each marketing strategy and message is tailored to a specific community and targeted customer base. Financial Services In addition to independently branded subsidiary homebuilders, Green Brick retains 100% ownership in Green Brick Title and Green Brick Insurance, and we launched wholly-owned GRBK Mortgage at the end of the fourth quarter of 2024.
We are engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, title and mortgage services, marketing and sales and the creation of brand images at our residential neighborhoods and master planned communities. We previously owned a noncontrolling interest in a builder in Colorado Springs, Colorado, which was sold on February 1, 2024.
We are engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, title, mortgage, insurance services, and marketing and sales, and the creation of master planned communities. We believe we offer higher quality homes with more distinctive designs and floor plans than those built by our competitors at comparable prices.
Land Policy Our land inventory strategy provides us with a multi-year supply of lots for each of our brands for future homebuilding while limiting excess supply that would be subject to market cycle risk.
Land Policy Our land inventory strategy provides us with a multi-year supply of lots for each of our brands for future homebuilding. We generally target entitled parcels that we develop that can begin delivering finished lots to our builder subsidiaries within 12 to 24 months from acquisition of the entitled parcel.
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Notwithstanding, we will also invest in longer-term land investments if our return criteria is generated. • Focus on Markets with a Favorable Growth Outlook and Strong Demand Fundamentals.
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As of December 31, 2024, we owned or controlled approximately 37,800 home sites in high-growth submarkets throughout the DFW, Austin, Houston, and Atlanta metropolitan areas, as well as the Treasure Coast of Florida market.
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(2) GB Challenger is not included in the table above as Green Brick does not have a controlling financial interest in Challenger.
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We will also purchase finished lots from 3rd-party developers, but to a much lesser extent. Our neighborhoods vary in size, depending on lot count and density.
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Prior to the sale of our interest in Challenger on February1, 2024, our investment in Challenger was treated as an unconsolidated investment under the equity method of accounting and was included in investments in unconsolidated entities in our consolidated balance sheets.
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As such, project durations, from the beginning of development to the last delivery, can range from a couple of years to eight or more years depending on the number of product lines and the sales pace of each product line.
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We believe this streamlined process and focus on operational efficiency has enabled us to adapt to changes in our homebuyers’ lifestyles.
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Our investment and capital allocation strategies vary by market, but we typically target minimum underwriting thresholds for returns and margins. • Focus on Markets with a Favorable Growth Outlook and Strong Demand Fundamentals.
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With certain exceptions, we focus on the development of entitled parcels in communities where we can generally sell all lots and homes within 24 to 72 months from the start of sales. This focus allows us to limit exposure to land development and land risks while pursuing favorable returns on our investments.
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One of our core operating philosophies is to create a culture that provides a positive, memorable experience for our homebuyers.
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Our in-house sales force typically works from sales offices located in model homes in or near each community. Community sales managers assist potential buyers by providing them with floor plans, price information, development and construction timetables, virtual and in-person tours of model homes, and upgrade options.
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We will also purchase finished lots from 3rd-party developers, but to a much lesser extent. Our neighborhoods vary in size, depending on lot count and density.
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We offer a preferred lender referral program, including through our mortgage joint venture, to provide lending options to homebuyers in need of financing. We also offer homeowners a comprehensive warranty on each home.
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As such, project durations, from the beginning of development to the last delivery, can range from a couple of years to eight or more years depending on the number of product lines and the sales pace of each product line. Our investment and capital allocation strategies vary by market, but we typically target minimum underwriting thresholds for returns and margins.
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As part of the Green Brick Partners family, Green Brick Title’s access to resources beyond those of a traditional title company enables us to stay one step ahead of our competition and bring buyers unmatched customer service. 4 TABLE OF CONTENTS Raw Materials Typically, all the raw materials and most of the components used in our business are readily available in the United States.
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These sales managers guide potential buyers by providing floor plans, pricing details, construction and development timelines, virtual and in-person tours, and information on available upgrades. Our sales team is trained internally and often brings prior experience in selling new homes within the local market.
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Due to the significant increase in home demand and the more limited supply of both existing homes and speculative home inventory from all builders in recent years, such seasonal patterns have been less pronounced in our business operations. Competition Competition in the homebuilding industry is intense and there are relatively low barriers to entry.
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Our insurance agency operations serve as an agency for home, auto, and other personal insurance policies to buyers of homes we sell.
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All such insurance policies are placed with third party insurance carriers. 4 TABLE OF CONTENTS Through our financial services companies, we endeavor to have our buyers receive personal attention from their first meeting through the closing of their new home. By offering a one-stop solution for our customers, we enhance their overall buying experience while gaining a competitive advantage.
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Raw Materials Typically, all the raw materials and most of the components used in our business are readily available in the United States. Most are standard items carried by major suppliers.
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We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry as well as by our transition to a more spec home business model with a focus on quick move-in homes. Competition Competition in the homebuilding industry is intense and there are relatively low barriers to entry.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+12 added−9 removed152 unchanged
Biggest changePoor relations with the residents of our communities, or with local real estate agents, could negatively impact our home sales, which could cause our revenues or results of operations to decline. Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities.
Biggest changeIf either of these events occurs, our revenue and net income could decline or we may not have sufficient capital necessary to implement our growth strategy. Poor relations with the residents of our communities, or with local real estate agents, could negatively impact our home sales, which could cause our revenues or results of operations to decline.
The current and continued economic conditions of high inflation and high interest rates, especially increased mortgage rates, could lead to a decrease in demand for new homes. Current or future efforts by the government to stimulate the economy may increase the risk of significant inflation and its adverse impact on our business or financial results.
The current and continued economic conditions of high inflation and high interest rates, especially increased mortgage rates, could lead to a decrease in demand for new homes. Current or future efforts by the government to stimulate the economy may increase the risk of significant inflation and its adverse impact on our business and financial results.
Further, slower rates of population growth or population declines in the DFW, Austin, Atlanta or Treasure Coast markets, especially as compared to the high population growth rates in prior years, could affect the demand for housing, causing home prices in these markets to decline and adversely affect our business, financial condition and results of operations.
Further, slower rates of population growth or population declines in the DFW, Austin, Houston, Atlanta or Treasure Coast markets, especially as compared to the high population growth rates in prior years, could affect the demand for housing, causing home prices in these markets to decline and adversely affect our business, financial condition and results of operations.
Further, acts of war, any outbreak or escalation of hostilities between the United States and any foreign power or acts of terrorism may cause disruptions to the U.S. economy or the local economies of the markets in which we operate, cause shortages of building materials, increase costs associated with obtaining building materials, affect job growth and consumer 12 TABLE OF CONTENTS confidence or cause economic changes that we cannot anticipate, all of which could reduce demand for our lots, homes and construction loans and adversely impact our business and results of operations.
Further, acts of war, any outbreak or escalation of hostilities between the United States and any foreign power or acts of terrorism may cause disruptions to the U.S. economy or the local economies of the markets in which we operate, cause shortages of building materials, increase costs associated with obtaining building materials, affect job growth and consumer confidence or cause economic changes that we cannot anticipate, all of which could reduce demand for our lots, homes and construction loans and adversely impact our business and results of operations.
In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify community development plans, which could adversely affect our results of operations. 13 TABLE OF CONTENTS Most of our potential homebuyers engage local real estate agents who are unaffiliated with us in connection with their search for a new home.
In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify community development plans, which could adversely affect our results of operations. Most of our potential homebuyers engage local real estate agents who are unaffiliated with us in connection with their search for a new home.
We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. 9 TABLE OF CONTENTS Our future growth may include additional strategic investments, joint ventures, partnerships and/or acquisitions of companies that may not be as successful as we anticipate and could disrupt our ongoing businesses and adversely affect our operations.
We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Our future growth may include additional strategic investments, joint ventures, partnerships and/or acquisitions of companies that may not be as successful as we anticipate and could disrupt our ongoing businesses and adversely affect our operations.
We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no-growth” initiatives that could be implemented in the future. Local governments also have broad discretion regarding the imposition of development and service fees for projects in their jurisdiction.
We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no- 15 TABLE OF CONTENTS growth” initiatives that could be implemented in the future. Local governments also have broad discretion regarding the imposition of development and service fees for projects in their jurisdiction.
If we are unable to obtain required bonds for our future projects, or if we are required to provide credit enhancements with respect to our current or future bonds, our business, liquidity, financial condition and results of operations could be materially and adversely affected. A negative change in our credit rating could adversely affect our business.
If we are unable to obtain required bonds for our future projects, or if we are required to provide credit enhancements with respect to our 16 TABLE OF CONTENTS current or future bonds, our business, liquidity, financial condition and results of operations could be materially and adversely affected. A negative change in our credit rating could adversely affect our business.
However, the market value of land, building lots and housing inventories can fluctuate significantly due to changing market conditions. The measures we employ to manage inventory risk may not be 10 TABLE OF CONTENTS adequate to insulate our operations from a severe drop in inventory values.
However, the market value of land, building lots and housing inventories can fluctuate significantly due to changing market conditions. The measures we employ to manage inventory risk may not be adequate to insulate our operations from a severe drop in inventory values.
If we cannot successfully implement our business strategy, our business, liquidity, financial condition and results of operations will be adversely affected. 7 TABLE OF CONTENTS Our business and financial results could be adversely affected by significant inflation or deflation. Inflation can adversely affect our homebuilding operations by increasing costs of land, financing, materials, labor and construction.
If we cannot successfully implement our business strategy, our business, liquidity, financial condition and results of operations will be adversely affected. Our business and financial results could be adversely affected by significant inflation or deflation. Inflation can adversely affect our homebuilding operations by increasing costs of land, financing, materials, labor and construction.
Should an uninsured loss or a loss in excess of insured limits occur or be subject to deductibles, we could sustain financial loss or lose capital invested in the affected property as well as anticipated future income from that property.
Should an uninsured loss or a loss in excess of insured limits occur or 14 TABLE OF CONTENTS be subject to deductibles, we could sustain financial loss or lose capital invested in the affected property as well as anticipated future income from that property.
Moreover, holders of our 17 TABLE OF CONTENTS depositary shares and outstanding preferred stock have preferential dividend and liquidation rights compared to holders of our common stock. We are permitted to incur additional debt.
Moreover, holders of our depositary shares and outstanding preferred stock have preferential dividend and liquidation rights compared to holders of our common stock. We are permitted to incur additional debt.
Their interests may not coincide with ours and they may make decisions with which we may disagree. Greenlight Capital, Inc. and its affiliates (“Greenlight”) and James R. Brickman own approximately 25.2% and 3.6%, respectively, of our voting power.
Their interests may not coincide with ours and they may make decisions with which we may disagree. Greenlight Capital, Inc. and its affiliates (“Greenlight”) and James R. Brickman own approximately 23.6% and 4.3%, respectively, of our voting power.
As of December 31, 2023, we had 45,005,175 shares of common stock and 2,000 shares of Series A preferred stock outstanding. Our common and preferred stock are equity securities and are subordinate to our existing and future indebtedness and effectively subordinated to all indebtedness and other non-equity claims against our subsidiaries.
As of December 31, 2024, we had 44,498,097 shares of common stock and 2,000 shares of Series A preferred stock outstanding. Our common and preferred stock are equity securities and are subordinate to our existing and future indebtedness and effectively subordinated to all indebtedness and other non-equity claims against our subsidiaries.
If our controlled builder fails to successfully execute its business strategies for any reason, it may be unable to purchase lots from us, repay outstanding construction finance loans made by us or borrow from us in the future, any of which could negatively impact our business, financial condition and results of operations.
If our controlled builder fails to successfully execute its business strategies for any reason, it may be unable to purchase lots from us, repay outstanding construction finance loans made by us or borrow from us in the future, any of which could negatively impact our business, financial condition and results of operations. 11 TABLE OF CONTENTS Increases in the after-tax costs of owning a home could reduce demand for our homes and lots.
Demand for our homes and lots is dependent on the cost and availability of mortgage financing. Our business depends on the ability of our homebuyers, as well as the ability of those who buy homes from the third-party homebuilding entities to which we sell lots (our “homebuilding customers”), to obtain financing for the purchase of their homes.
Our business depends on the ability of our homebuyers, as well as the ability of those who buy homes from the third-party homebuilding entities to which we sell lots (our “homebuilding customers”), to obtain financing for the purchase of their 10 TABLE OF CONTENTS homes.
The homebuilding industry experiences seasonal fluctuations in quarterly results of operations and capital requirements. We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors.
We typically experience the highest new home order activity in spring and summer, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors.
In addition, periods of economic slowdown or recession, rising or high interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchases of homes or an increased incidence of home order cancellations.
This, in turn, could adversely affect our results of operations and financial condition. 7 TABLE OF CONTENTS In addition, periods of economic slowdown or recession, rising or high interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchases of homes or an increased incidence of home order cancellations.
The projection of losses related to these liabilities requires actuarial assumptions that are subject to variability due to uncertainties regarding construction defect claims relative to our markets and the types of products we build, insurance industry practices, and legal or regulatory actions and/or interpretations, among other factors. 14 TABLE OF CONTENTS Our quarterly results of operations may fluctuate because our business is seasonal in nature.
The projection of losses related to these liabilities requires actuarial assumptions that are subject to variability due to uncertainties regarding construction defect claims relative to our markets and the types of products we build, insurance industry practices, and legal or regulatory actions and/or interpretations, among other factors.
Our ability to retain our management team or to attract suitable replacements should any members of our management team leave is dependent on the competitive nature of the employment market.
Our results of operations could suffer if any of the management team members decided to terminate their employment with us. Our ability to retain our management team or to attract suitable replacements should any members of our management team leave is dependent on the competitive nature of the employment market.
Our results of operations could be adversely affected if we are unable to develop communities successfully or within expected timeframes. Before a community generates any revenue, time and material expenditures are required to acquire and develop land, entitle and finish lots, obtain development approvals, pay taxes and construct significant portions of project infrastructure, amenities, model homes and sales facilities.
Before a community generates any revenue, time and material expenditures are required to acquire and develop land, entitle and finish lots, obtain development approvals, pay taxes and construct significant portions of project infrastructure, amenities, model homes and sales facilities.
Our failure to successfully identify and manage future investments, joint ventures, partnerships or acquisitions could harm our results of operations. Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets decline. In the DFW metropolitan area, we primarily operate in the counties of Dallas, Collin, Denton, Ellis, Rockwall, Tarrant, Kaufman, Hunt, and Johnson.
Our failure to successfully identify and manage future investments, joint ventures, partnerships or acquisitions could harm our results of operations. Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets decline.
If these holders sell substantial amounts of these shares, the price of our common stock could decline. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional equity securities. As of January 2, 2024, 11,336,493 shares were held by Greenlight. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If these holders sell substantial amounts of these shares, the price of our common stock could decline. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional equity securities. As of December 31, 2024, 10,509,411 shares were held by Greenlight.
The loss of services from key management team members or a limitation in their availability could materially and adversely impact our 8 TABLE OF CONTENTS business, liquidity, financial condition and results of operations. Such a loss could also be negatively perceived in the capital markets.
The loss of services from key management team members or a limitation in their availability could materially and adversely impact our business, liquidity, financial condition and results of operations. Such a loss could also be negatively perceived in the capital markets. We do not maintain key person insurance with respect to any member of our named executive officers.
Any of these events could increase our operating expenses, impair our cash flows and reduce our revenues. To the extent that climate change increases the frequency and severity of weather-related disasters, we may experience increasing negative weather-related impacts to our operations in the future.
To the extent that climate change increases the frequency and severity of weather-related disasters, we may experience increasing negative weather-related impacts to our operations in the future.
We are subject to several local, state, federal and other statutes, ordinances, rules and regulations concerning the environment. The particular environmental laws that apply to any given homebuilding or development site vary according to multiple factors, including the site location, environmental conditions and the present and former uses of the site and adjoining properties.
The particular environmental laws that apply to any given homebuilding or development site vary according to multiple factors, including the site location, environmental conditions and the present and former uses of the site and adjoining properties.
In the event that a buy-sell event occurs, our builder will have the right to initiate a buy-sell process, which may happen at an inconvenient time for us.
The operating agreements governing our partially owned controlled builders contain buy-sell provisions that may be triggered in certain circumstances. In the event that a buy-sell event occurs, our builder will have the right to initiate a buy-sell process, which may happen at an inconvenient time for us.
Any of these outcomes could have an adverse effect on our results of operations. Risks Related to Our Financing and Capital Structure We may be unable to obtain suitable bonding for the development of our housing projects.
Risks Related to Our Financing and Capital Structure We may be unable to obtain suitable bonding for the development of our housing projects.
In any of these situations, we may be unable to amend the applicable instrument or obtain a waiver without significant additional cost, or at all. Any such situation could have a material adverse effect on our liquidity and financial condition.
In any of these situations, we may be unable to amend the applicable instrument or obtain a waiver without significant additional cost, or at all.
The availability of suitable land assets could also affect the success of our land acquisition strategy, which may impact our ability to maintain or increase the number of active selling communities, grow our revenues and margins, and to achieve or maintain profitability.
The availability of suitable land assets could also affect the success of our land acquisition strategy, which may impact our ability to maintain or increase the number of active selling communities, grow our revenues and margins, and to achieve or maintain profitability. 9 TABLE OF CONTENTS Our results of operations could be adversely affected if we are unable to develop communities successfully or within expected timeframes.
Land acquisition, development and construction activities may be adversely affected by any shortage or increased cost of financing or the unwillingness of third parties to engage in partnerships, joint ventures or other alternative arrangements. 16 TABLE OF CONTENTS In addition to the financing provided by the senior unsecured notes, we currently have access to a senior secured revolving credit facility and a senior unsecured revolving credit facility.
Land acquisition, development and construction activities may be adversely affected by any shortage or increased cost of financing or the unwillingness of third parties to engage in partnerships, joint ventures or other alternative arrangements.
Additionally, we are subject to laws and regulations related to workers’ health and safety, and there are efforts to subject homebuilders to other labor related laws or rules, some of which may make us responsible for things done by our subcontractors over which we have little or no control. 15 TABLE OF CONTENTS Our business and financial results could be adversely affected by the failure of persons who act on our behalf to comply with applicable regulations and guidelines.
Additionally, we are subject to laws and regulations related to workers’ health and safety, and there are efforts to subject homebuilders to other labor related laws or rules, some of which may make us responsible for things done by our subcontractors over which we have little or no control.
Risks Related to Ownership of Our Common Stock Future issuances of our common stock or Series A preferred stock could adversely affect the market for our common and preferred stock or dilute the ownership interest of our stockholders.
Any such situation could have a material adverse effect on our liquidity and financial condition. 17 TABLE OF CONTENTS Risks Related to Ownership of Our Common Stock Future issuances of our common stock or Series A preferred stock could adversely affect the market for our common and preferred stock or dilute the ownership interest of our stockholders.
Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect sales or our reputation.
Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities. Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect sales or our reputation.
Many of these competitors also have longstanding relationships with subcontractors, suppliers, and developers in the markets in which we operate. Our homebuilding business also competes for sales with resales of existing homes and with available rental housing.
Many of these competitors also have longstanding relationships with subcontractors, suppliers, and developers in the markets in which we operate.
Changes to existing laws or regulations or adoption of new laws or regulations could require our joint venture to incur significant compliance costs. A material failure to comply with any of these laws or regulations could result in the loss or suspension of required licenses or other approvals, the imposition of monetary penalties, and restitution awards or other relief.
A material failure to comply with any of these laws or regulations could result in the loss or suspension of required licenses or other approvals, the imposition of monetary penalties, and restitution awards or other relief. Any of these outcomes could have an adverse effect on our results of operations.
Increases in the after-tax costs of owning a home could reduce demand for our homes and lots. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made major changes to the Internal Revenue Code that, in part, affect the after-tax cost of owning a home.
We may not realize our favorable growth outlook if housing demand and population growth stagnate or decrease in our core markets. Furthermore, we may be unable to compete effectively with the resale home market in our core markets.
Furthermore, we may be unable to compete effectively with the resale home market in our core markets.
We cannot ensure that we will be able to extend the maturity of these credit facilities or arrange another facility on acceptable terms or at all. Furthermore, in the future, we may seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financings and/or securities offerings.
Furthermore, in the future, we may seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financings and/or securities offerings.
We do not maintain key person insurance with respect to any member of our named executive officers. Furthermore, key employees working in the land development, homebuilding and construction industries are highly sought after. Experienced employees in the homebuilding, land acquisition, and construction industries are fundamental to our ability to generate, obtain and manage opportunities.
Furthermore, key employees working in the land development, homebuilding and construction industries are highly sought after. Experienced employees in the homebuilding, land acquisition, and construction industries are fundamental to our ability to generate, obtain and manage opportunities. In particular, local knowledge and relationships are critical to our ability to source attractive land acquisition opportunities.
The cost of complying with our warranty obligations may be significant if we are unable to recover the cost of repairs from subcontractors, materials suppliers and insurers. Laws and regulations governing the residential mortgage industry could have an adverse effect on our business and financial results.
The cost of complying with our warranty obligations may be significant if we are unable to recover the cost of repairs from subcontractors, materials suppliers and insurers. Risks Related to Government and Regulations Our developments are subject to government regulations, which could cause us to incur significant liabilities or restrict our business activities.
The annual deduction for real estate taxes and state and local income taxes (or sales taxes in lieu of income taxes) is now generally limited to $10,000. These changes increased the after-tax cost of owning a new home for many of our potential homebuyers and the potential homebuyers of our homebuilding customers.
These changes increased the after-tax cost of owning a new home for many of our potential homebuyers and the potential homebuyers of our homebuilding customers.
Our success depends on the continued performance of key employees, including management team members at both the corporate and homebuilder subsidiary levels. Our results of operations could suffer if any of the management team members decided to terminate their employment with us.
Failure to recruit, retain and develop highly skilled, competent employees may have a material adverse effect on our business and results of operations. Our success depends on the continued performance of key employees, including management team members at both the corporate and homebuilder subsidiary levels.
Data protection and privacy laws continue to evolve and become more complex in various U.S. federal and state jurisdictions. Such regulatory changes, variations in requirements across jurisdictions and ongoing discussions about a national privacy laws could present compliance challenges. The costs of complying with such changes could adversely affect our business.
Such regulatory changes, variations in requirements across jurisdictions and ongoing discussions about a national privacy laws could present compliance challenges. The costs of complying with such changes could adversely affect our business. 13 TABLE OF CONTENTS We maintain insurance coverage for potential breaches but the costs to remedy a breach may not be fully covered by our insurance.
Our capital resources and liquidity could be adversely affected if we are required to repurchase or sell a substantial portion of the equity interest in our controlled homebuilding subsidiaries. The operating agreements governing our partially owned controlled builders contain buy-sell provisions that may be triggered in certain circumstances.
Our homebuilding business also competes for sales with resales of existing homes and with available rental housing. 12 TABLE OF CONTENTS Our capital resources and liquidity could be adversely affected if we are required to repurchase or sell a substantial portion of the equity interest in our controlled homebuilding subsidiaries.
If either of these events occurs, our revenue and net income could decline or we may not have sufficient capital necessary to implement our growth strategy. We are subject to environmental laws and regulations, which may increase our costs, limit the areas in which we can build homes and develop land and delay completion of our projects.
We are subject to environmental laws and regulations, which may increase our costs, limit the areas in which we can build homes and develop land and delay completion of our projects. We are subject to several local, state, federal and other statutes, ordinances, rules and regulations concerning the environment.
The Tax Act made major changes to the Internal Revenue Code that, in part, affect the after-tax cost of owning a home. Specifically, the Tax Act limited the ability of homebuyers to deduct (i) property taxes, (ii) mortgage interest, and (iii) state and local income taxes.
Specifically, the Tax Act limited the ability of homebuyers to deduct (i) property taxes, (ii) mortgage interest, and (iii) state and local income taxes. The annual deduction for real estate taxes and state and local income taxes (or sales taxes in lieu of income taxes) is now generally limited to $10,000.
Such a condition could have an adverse impact on our business both by reducing demand for our homes, lots and construction loans and by increasing the supply of homes for sale. 11 TABLE OF CONTENTS Our results of operations could be adversely impacted by negative events at, or performance of, our partially owned controlled builders.
Significant cancellations could have a material adverse effect on our business as a result of lost sales revenue and the accumulation of unsold housing inventory. Our results of operations could be adversely impacted by negative events at, or performance of, our partially owned controlled builders.
As a result, shortages or increased costs of labor and raw materials could have a material adverse effect on our business, prospects, financial condition and results of operations. Failure to recruit, retain and develop highly skilled, competent employees may have a material adverse effect on our business and results of operations.
As a result, shortages or increased costs of labor and raw materials could have a material adverse effect on our business, prospects, financial condition and results of operations. 8 TABLE OF CONTENTS Potential tariffs, if enacted into law, could adversely affect our business and financial results, especially since we may not be able to raise home prices sufficiently to offset increased prices caused by any such tariffs.
In 2020, we established a joint venture, BHome Mortgage, to provide mortgage related services to homebuyers. The residential mortgage lending industry remains under intense scrutiny and is heavily regulated at the federal, state and local levels. Although we do not originate mortgages, we are directly or indirectly subject to certain of these regulations.
The residential mortgage lending industry remains under intense scrutiny and is heavily regulated at the federal, state and local levels. Changes to existing laws or regulations or adoption of new laws or regulations could require our joint venture to incur significant compliance costs.
Removed
This, in turn, could adversely affect our results of operations and financial condition.
Added
Additionally, changes in immigration laws and/or their enforcement could result in tighter overall labor conditions and a shortage of labor.
Removed
In particular, local knowledge and relationships are critical to our ability to source attractive land acquisition opportunities.
Added
The incoming Trump administration has proposed the implementation of a number of tariffs, including a 25% tariff on imports from Canada and other countries, which could, if enacted into law, likely significantly increase the cost of lumber in the U.S.
Removed
In Austin, we primarily operate in the counties of Bastrop and Travis. In Atlanta, we primarily operate in the counties of Fulton, Gwinnett, Forsyth, and Cherokee. In Florida, we primarily operate in the counties of Indian River and St. Lucie.
Added
As noted above with respect to the impact of inflation, while we attempt to pass along price increases to our consumers to help offset price increases we incur, we may not be able to continue to do so, thereby adversely impacting our margins as a result of any tariffs imposed on our operations.
Removed
Our developments are subject to government regulations, which could cause us to incur significant liabilities or restrict our business activities.
Added
We currently operate in only four core markets and, outside of DFW, our operations are typically concentrated in a limited number of communities within those markets. We may not realize our favorable growth outlook if housing demand and population growth stagnate or decrease in our core markets.
Removed
Significant cancellations could have a material adverse effect on our business as a result of lost sales revenue and the accumulation of unsold housing inventory. Any increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions, which would have an adverse impact on our business.
Added
Demand for our homes and lots is dependent on the cost and availability of mortgage financing.
Removed
People who are unemployed, underemployed, who have left the labor force or are concerned about the loss of their jobs are less likely to purchase new homes. They may also be forced to sell their homes as they face difficulties in making required mortgage payments.
Added
In addition, adverse weather events could prompt governmental authorities to adopt more stringent building codes, which would likely increase construction and development costs in affected areas and negatively impact home affordability and/or demand. Any of these events could increase our operating expenses, impair our cash flows and reduce our revenues.
Removed
Therefore, any increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions.
Added
It is conceivable that we might integrate artificial intelligence (“AI”) solutions into our information systems in the future, potentially assuming a more critical role in our operations over time. AI programs can incur significant costs and demand substantial expertise for development, pose challenges in setup and management, and necessitate periodic updates.
Removed
We maintain insurance coverage for potential breaches but the costs to remedy a breach may not be fully covered by our insurance.
Added
Competitors or other entities may integrate AI into their information systems and business operations more swiftly or effectively than us, potentially impairing our competitive edge and negatively impacting our financial performance Data protection and privacy laws continue to evolve and become more complex in various U.S. federal and state jurisdictions.
Removed
For example, in December 2021, we offered 2,000,000 depositary shares each representing a 1/1000th interest in our 5.75% cumulative perpetual preferred stock.
Added
Our quarterly results of operations may fluctuate because our business is seasonal in nature. The homebuilding industry experiences seasonal fluctuations in quarterly results of operations and capital requirements.
Added
Our business and financial results could be adversely affected by the failure of persons who act on our behalf to comply with applicable regulations and guidelines.
Added
Laws and regulations governing the residential mortgage industry could have an adverse effect on our business and financial results. In 2024, we established GRBK Mortgage, a wholly owned subsidiary, to provide mortgage related services to homebuyers. We previously provided such services through our joint venture, BHome Mortgage.
Added
In addition to the financing provided by the senior unsecured notes, we currently have access to a senior secured revolving credit facility and a senior unsecured revolving credit facility. We cannot ensure that we will be able to extend the maturity of these credit facilities or arrange another facility on acceptable terms or at all.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−0 removed13 unchanged
Biggest changeThe Company maintains a cyber incident response plan to timely, consistently, and compliantly address cybersecurity threats that may occur despite the Company’s safeguards. The response plan covers preparation, detection and analysis, containment and investigation, notification (which may include timely notice to the Board if deemed material or appropriate), eradication and recovery, and incident closure and post-incident analysis.
Biggest changeThe response plan covers preparation, detection and analysis, containment and investigation, notification (which may include timely notice to the Board if deemed material or appropriate), eradication and recovery, and incident closure and post-incident analysis. The Company retains a third-party cyber security firm to leverage in the event of a cyber security incident.
Cybersecurity risk management and strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: • Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the disclosure and reporting of such material incidents may be made by management in a timely manner. • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, 18 TABLE OF CONTENTS anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. • Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans that address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis. • Third-Party Risk Management: The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact the Company’s business in the event of a cybersecurity incident affecting those third-party systems. • Outside Consultants: The Company engages various outside consultants, including contractors, auditors, and other third parties, to among other things : ◦ monitor Company networks, servers and endpoints to identify vulnerabilities; ◦ conduct bi-weekly email phishing campaigns for Company employees to evaluate employee responses to such campaigns, identify vulnerabilities and advise on possible attack preparedness and responses; ◦ obtain information of a cybersecurity incident and isolate compromised systems and electronic data from further exposure; and ◦ determine and execute mitigation and remediation options and plans. • Education and Awareness: The Company provides annual, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
Cybersecurity risk management and strategy As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is focused on the following key areas: • Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the disclosure and reporting of such material incidents may be made by management in a timely manner. • Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. • Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans that address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis. • Third-Party Risk Management: The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact the Company’s business in the event of a cybersecurity incident affecting those third-party systems. • Outside Consultants: The Company engages various outside consultants, including contractors, auditors, and other third parties, to among other things : ◦ monitor Company networks, servers and endpoints to identify vulnerabilities; ◦ conduct regular email phishing campaigns for Company employees to evaluate employee responses to such campaigns, identify vulnerabilities and advise on possible attack preparedness and responses; ◦ obtain information of a cybersecurity incident and isolate compromised systems and electronic data from further exposure; and ◦ determine and execute mitigation and remediation options and plans. • Education and Awareness: The Company provides annual, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
The Company’s Vice President of IT, Randall Anderson, in coordination with the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and General Counsel (“GC”), works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
The Company’s Vice President of IT in coordination with the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and General Counsel (“GC”), works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
Risks from Cybersecurity Threats Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
Risks from Cybersecurity Threats Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected nor are they reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
The Company’s Vice President of IT reports to the Audit Committee as part of every regularly scheduled quarterly meeting of the Audit Committee (or more frequently, as needed) regarding technological risk exposure and cybersecurity risk management strategy.
The Company’s Vice President of IT, Randall Anderson, reports to the Audit Committee as part of every regularly scheduled quarterly meeting of the Audit Committee (or more frequently, as needed) regarding technological risk exposure and cybersecurity risk management strategy.
Through ongoing communications with management, the Company’s Vice President of IT monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee when appropriate. 19 TABLE OF CONTENTS Management’s Expertise Mr.
Through ongoing communications with management, the Company’s Vice President of IT monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee when appropriate. Management’s Expertise Mr.
The results of such assessments, audits and reviews are reported to the Audit Committee, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.
The results of such assessments, audits and reviews are reported to the Audit 19 TABLE OF CONTENTS Committee, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.
A cybersecurity threat is any potential unauthorized occurrence, on or conducted through, the Company’s information systems that may result in adverse effects on the confidentiality, integrity or availability of the Company’s information systems or any information residing therein.
A cybersecurity threat is any potential unauthorized occurrence or a series of related unauthorized occurrences, on or conducted through, the Company’s information systems that may result in adverse effects on the confidentiality, integrity or availability of the Company’s information systems or any information residing therein.
The Company retains a third-party cyber security firm to leverage in the event of a cyber security incident. The Company’s response planning is reviewed annually and kept up to date with industry developments. The scope of this plan is enterprise-wide and includes the Company’s business units and subsidiaries.
The Company’s response planning is reviewed annually and kept up to date with industry developments. The scope of this plan is enterprise-wide and includes the Company’s business units and subsidiaries.
Added
The Company maintains insurance coverage for potential breaches and a cyber incident response plan to timely, consistently, and compliantly address cybersecurity threats that may occur despite the Company’s safeguards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We lease our principal executive office located at 5501 Headquarters Drive, Suite 300W, Plano, Texas, 75024. Our homebuilding and title division offices are located in leased space in the markets where we conduct business. We believe that such properties are suitable and adequate to meet the needs of our businesses.
Biggest changeITEM 2. PROPERTIES We lease our principal executive office located at 5501 Headquarters Drive, Suite 300W, Plano, Texas, 75024. Our homebuilding, title, and mortgage division offices are located in leased space in the markets where we conduct business. We believe that such properties are suitable and adequate to meet the needs of our businesses.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in various claims and litigation arising in the ordinary course of business. We do not believe that any such claims and litigation will have a material adverse effect upon our results of operations or financial position.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in various claims and litigation arising in the ordinary course of business. We do not believe that any such claims and litigation will have a material adverse effect upon our results of operations or financial position. 20 TABLE OF CONTENTS

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Removed
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on The New York Stock Exchange under the ticker symbol “GRBK”. Holders of Record On February 23, 2024, there were 67 stockholders of record of our common stock.
Added
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On October 25, 2024, the Company renewed its employment agreement with Mr. Brickman (the “Brickman Employment Agreement”) extending the term of his employment until December 31, 2027. The Brickman Employment Agreement increases Mr.
Removed
We believe the number of beneficial owners of our common stock is substantially greater than the number of record holders because a large portion of our outstanding common stock is held of record in broker “street names” for the benefit of individual investors. As of February 23, 2024, there were 44,971,005 common shares outstanding.
Added
Brickman’s annual base salary to $1,600,000 commencing November 1, 2024, and his target bonus to $3,700,000, subject to increase, but not decrease, by the Compensation Committee. Payment of the bonus is contingent upon the achievement of performance goals established and assessed solely at the discretion of the Compensation Committee of the Board.
Removed
Dividends on Common Shares We have not paid any dividends on our common stock since our inception and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future.
Added
The annual bonus may be payable partially in cash and partially in equity, as determined by the Compensation Committee. The Brickman Employment Agreement also provides that Mr. Brickman is eligible to be granted an annual equity-based award under the Company’s long-term incentive compensation plan, subject to the terms and conditions of the Company’s 2024 Omnibus Incentive Plan.
Removed
Payment of future dividends, if any, will be at the discretion of our Board of Directors (the “Board”) and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and condition, legal requirements and other factors as our Board deems relevant.
Added
In the event that Mr. Brickman’s employment is terminated due to a Qualified Retirement (as defined in the Brickman Employment Agreement), the Company will provide Mr. Brickman with (i) any equity award granted to Mr.
Removed
Common Stock Performance Graph The following graph compares the yearly dollar change in the cumulative total shareholder return on the Company’s common stock against the cumulative total shareholder return of the Russell 3000 Index and the S&P Homebuilders Select Industry Index for the five-year period that commenced December 31, 2018 and ended December 31, 2023. 21 TABLE OF CONTENTS Issuer Purchases of Equity Securities The following table provides information about repurchases of our common stock during the three months ended December 31, 2023: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (1) October 1 - October 31, 2023 — $ — — $ 121,000,000 November 1 - November 30, 2023 299,174 46.50 299,174 107,097,000 December 1 - December 31, 2023 74,797 49.44 74,797 103,401,000 Total 373,971 47.09 373,971 (1) On April 27, 2022, the Board authorized a $100.0 million stock repurchase program (the “2022 Repurchase Plan”).
Added
Brickman, pursuant to the long-term incentive compensation plan, and (ii) any restricted stock units or other equity awards that have not previously vested will remain subject to the performance requirements and vesting dates set forth in the respective award agreement.
Removed
Repurchases through December 31, 2023 were executed pursuant to the 2022 Repurchase Plan. On April 27, 2023, the Board approved a new stock repurchase program (the “2023 Repurchase Plan”) that authorizes the Company to purchase, from time to time, up to an additional $100.0 million of our outstanding common stock, upon completion of our 2022 Repurchase Plan.
Added
All other material terms of the Brickman Employment Agreement remain the same, including the provisions for severance benefits, change in control benefits, and for the non-competition, non-solicitation an d confidentiality provisions during his employment and for a period of twelve months after termination.
Removed
The 2023 Repurchase Plan has no time deadline and will continue until otherwise modified or terminated by the Board at any time in its sole discretion. As of December 31, 2023, the remaining dollar value of shares that may yet be purchased was approximately $3.4 million under the 2022 Repurchase Plan and $100.0 million under the 2023 Repurchase Plan.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeForward-looking statements included or incorporated by reference in this Annual Report on Form 10-K include statements concerning (1) our balance sheet strategy and belief that we have ample liquidity; (2) our goals and strategies and their anticipated benefits, including expansion into new markets or new related businesses; (3) our intentions and the expected benefits and advantages of our product and land positioning strategies; (4) our expectations regarding future finished lots, the quality of those lots and the timing of backlog fulfillment; (5) expectations regarding our industry and our business in 2024 and beyond; (6) the contribution of certain market factors to our growth; (7) our land and lot acquisition strategy; (8) the sufficiency of our capital resources to support our business strategy and to service our debt; (9) the impact of new accounting standards and changes in accounting estimates; (10) trends and expectations regarding sales prices, sales orders, sales pace, cancellations, construction costs, gross margins, land costs and profitability and future home inventories; (11) our future cash needs; (12) our strategy to utilize leverage to invest in our business; (13) seasonal factors and the impact of seasonality in future quarters; (14) our expectations regarding access to additional growth capital; (15) our expectations regarding future land revenue recognition; (16) our ability to adapt to changing market conditions; and (17) our expectations regarding the sale of our ownership in Challenger; and (18) the disposition of legal claims and related contingencies.
Biggest changeForward-looking statements included or incorporated by reference in this Annual Report on Form 10-K include statements concerning (1) our balance sheet strategy and belief that we have ample liquidity; (2) our goals and strategies and their anticipated benefits, including expansion into new markets or new related businesses and the attractiveness of the new markets; (3) our intentions and the expected benefits and advantages of our product and land positioning strategies; (4) our expectations regarding the reduction in our targeted debt to total capitalization ratio; (5) our expectations regarding future finished lots, the quality of those lots and the timing of backlog fulfillment; (6) expansion through Trophy Homes; (7) expectations regarding our industry and our business in 2025 and beyond; (8) the contribution of certain market factors to our growth; (9) the impact of elevated mortgage rates and high interest rate volatility on our absorption rate; (10) our land and lot acquisition strategy; (11) the sufficiency of our capital resources to support our business strategy and to service our debt; (12) our expectations regarding backlog; (13) the impact of new accounting standards and changes in accounting estimates; (14) trends and expectations regarding sales prices, sales orders, sales pace, cancellations, construction costs, gross margins, land costs and profitability and future home inventories; (15) our expectations regarding increased regulations on homebuilders and land developers; (16) our future cash needs; (17) our strategy to utilize leverage to invest in our business; (18) seasonal factors and the impact of seasonality in future quarters; (19) our expectations regarding access to additional growth capital; (20) our expectations regarding future land revenue recognition; (21) our ability to adapt to changing market conditions; and (22) the disposition of legal claims and related contingencies.
These risks include, but are not limited to: (1) general economic conditions in our markets, seasonality, cyclicality and competition in the homebuilding industry; (2) changes in macroeconomic conditions, including interest and unemployment rates, that could adversely impact demand for new homes or the ability of our buyers to qualify; (3) shortages, delays or increased costs or performance issues of raw materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) significant periods of inflation or deflation; (5) a shortage of labor, (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including the successful development of our communities within expected timeframes and the growth and expansion of our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) the geographic concentration of our operations; (10) government regulation risks; (11) adverse changes in the availability or volatility of mortgage financing; (12) severe weather events or natural disasters; (13) difficulty in obtaining sufficient capital to fund our growth; (14) our ability to meet our debt service obligations; (15) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (16) our ability to adequately self-insure; and (17) changes in accounting standards that adversely affect our reported earnings or financial condition.
These risks include, but are not limited to: (1) general economic conditions in our markets, seasonality, cyclicality and competition in the homebuilding industry; (2) changes in macroeconomic conditions, including interest rates, that could adversely impact demand for new homes or the ability of our buyers to qualify; (3) shortages, delays or increased costs or performance issues of raw materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) significant periods of inflation or deflation; (5) a shortage of labor, (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including the successful development of our communities within expected timeframes and the growth and expansion of our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) the geographic concentration of our operations; (10) government regulation risks; (11) adverse changes in the availability or volatility of mortgage financing; (12) severe weather events or natural disasters; (13) difficulty in obtaining sufficient capital to fund our growth; (14) our ability to meet our debt service obligations; (15) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (16) our ability to adequately self-insure; and (17) changes in accounting standards that adversely affect our reported earnings or financial condition.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese homebuilders had an average sales price below the Company average due to a mix of product type and selling more inventory in perimeter locations. 24 TABLE OF CONTENTS New Home Orders and Backlog The table below represents new home orders and backlog related to our builder operations segments, excluding mechanic’s liens contracts (dollars in thousands): Years Ended December 31, 2023 2022 Change % Net new home orders 3,356 1,973 1,383 70.1 % Revenue from net new home orders $ 1,953,903 $ 1,210,315 $ 743,588 61.4 % Average selling price of net new home orders $ 582.2 $ 613.4 $ (31.2) (5.1) % Cancellation rate 6.6 % 13.8 % (7.2) % (52.2) % Absorption rate per average active selling community per quarter 9.9 6.5 3.4 52.3 % Average active selling communities 85 76 9 11.8 % Active selling communities at end of period 91 80 11 13.8 % Backlog $ 555,200 $ 369,095 $ 186,105 50.4 % Backlog units 770 537 233 43.4 % Average sales price of backlog $ 721.0 $ 687.3 $ 33.7 4.9 % Net new home orders increased by 70.1% over the prior year, and our absorption rate per average active selling community increased 52.3% year over year.
Biggest changeNew Home Orders and Backlog The table below represents new home orders and backlog related to our builder operations segments, excluding mechanic’s liens contracts (dollars in thousands): Years Ended December 31, 2024 2023 Change % Net new home orders 3,681 3,356 325 9.7 % Revenue from net new home orders $ 2,010,439 $ 1,953,903 $ 56,536 2.9 % Average selling price of net new home orders $ 546.2 $ 582.2 $ (36.0) (6.2) % Cancellation rate 7.3 % 6.6 % 0.7 % 10.6 % Absorption rate per average active selling community per quarter 9.1 9.9 (0.8) (8.1) % Average active selling communities 101 85 16 18.8 % Active selling communities at end of period 106 91 15 16.5 % Backlog revenue $ 495,883 $ 555,200 $ (59,317) (10.7) % Backlog units 668 770 (102) (13.2) % Average sales price of backlog $ 742.3 $ 721.0 $ 21.3 3.0 % Net new home orders increased by 9.7% over the prior year and our average active selling communities increased by 18.8% due to the continued opening of new communities that outpaced the sellout of existing communities.
Principal on the 2028 Notes is due in increments of $25.0 million annually on February 25 in each of 2024, 2025, 2026, 2027, and 2028. • In December 2021, we issued $100.0 million of senior unsecured notes (the “2029 Notes”). Interest accrues at an annual rate of 3.25% and is payable quarterly.
Interest accrues at an annual rate of 3.25% and is payable quarterly. Principal on the 2028 Notes is due in increments of $25.0 million annually on February 25 in each of 2025, 2026, 2027, and 2028. • In December 2021, we issued $100.0 million of senior unsecured notes (the “2029 Notes”).
The increase in new homes delivered is attributable to the limited competition in our infill and infill-adjacent community sites, our reduced cycle times, and the continued low supply of existing and new home inventory in our markets.
The increase in new homes delivered is attributable to our increase in community count, the limited competition in our infill and infill-adjacent community sites, our reduced cycle times, and the continued low supply of existing and new home inventory in our markets.
See Note 13 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion on the Company’s income tax expense for the year ended December 31, 2023.
See Note 13 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion on the Company’s income tax expense for the year ended December 31, 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For business overview and developments during the year ended December 31, 2023, refer to Part I, Item 1 of this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For business overview and developments during the year ended December 31, 2024, refer to Part I, Item 1 of this Annual Report on Form 10-K.
Backlog refers to homes under sales contracts that have not yet closed at the end of the relevant period, and absorption rate refers to the rate at which net new home orders are contracted per average active selling community during the relevant period.
Backlog refers to homes under sales contracts that have not yet closed at the end of the respective period, and absorption rate refers to the rate at which net new home orders are contracted per average active selling community during the respective period.
Preferred Equity As of December 31, 2023 and December 31, 2022 we had 2,000,000 Depositary Shares issued and outstanding, each representing 1/1000 of a share of our 5.75% Series A Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”).
Preferred Equity As of December 31, 2024 and December 31, 2023 we had 2,000,000 Depositary Shares issued and outstanding, each representing 1/1000 of a share of our 5.75% Series A Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”).
For discussion and analysis our cash flows for the year ended December 31, 2022 as well as for comparison to our cash flows for the year ended December 31, 2021, refer to Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2022.
For discussion and analysis our cash flows for the year ended December 31, 2023 as well as for comparison to our cash flows for the year ended December 31, 2022, refer to Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.
It is common that actual 31 TABLE OF CONTENTS results differ from budgeted amounts for various reasons, including delays, changes in costs that have not been committed, unforeseen issues encountered during project development that fall outside the scope of existing contracts, or items that ultimately cost more or less than the budgeted amount.
It is common that actual results differ from budgeted amounts for various reasons, including delays, changes in costs that have not been committed, unforeseen issues encountered during project development that fall outside the scope of existing contracts, or items that ultimately cost more or less than the budgeted amount.
Generally Accepted Accounting Principles (“GAAP”), it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation, as a substitute for, or superior to, financial measures prepared in accordance with GAAP. 28 TABLE OF CONTENTS The closest GAAP financial measure to the net debt to total capitalization ratio is the debt to total capitalization ratio.
Generally Accepted Accounting Principles (“GAAP”), it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation, as a substitute for, or superior to, financial measures prepared in accordance with GAAP. The closest GAAP financial measure to the net debt to total capitalization ratio is the debt to total capitalization ratio.
For our builder operations segments, during each reporting period, contribution margins on closed homes, average margins of homes under construction, and forecasted margins for future starts are reviewed at a community level by management.
For our builder operations segments, during each reporting period, contribution margins on closed homes and homes under construction, and forecasted margins for future starts are reviewed at a community level by management.
These discounted cash flows are impacted by expected risk based on estimated land development activities, construction and delivery timelines, market risk of price erosion, uncertainty of development or construction cost increases, and other risks specific to the asset or market conditions where the asset is located when the assessment is made.
These discounted cash flows are impacted by expected risk based on estimated land development activities, construction 32 TABLE OF CONTENTS and delivery timelines, market risk of price erosion, uncertainty of development or construction cost increases, and other risks specific to the asset or market conditions where the asset is located when the assessment is made.
We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and remain poised for continued growth. Cash flows for each of our communities depend on the community’s stage in the development cycle.
We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and remain poised for continued growth. 28 TABLE OF CONTENTS Cash flows for each of our communities depend on the community’s stage in the development cycle.
Overview and Outlook Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, and net new home orders, which refers to the number of sales contracts executed reduced by the number of sales contracts canceled during the relevant period.
Overview and Outlook Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, net new home orders, which refers to the number of sales contracts executed reduced by the number of sales contracts canceled during the relevant period, and homebuilding gross margin.
Under the rules governing shelf registration statements, we will file a prospectus supplement and advise the SEC of the amount and type of securities each time we issue securities under this 30 TABLE OF CONTENTS registration statement. The Company has not issued any securities under this registration statement through the date of this filing.
Under the rules governing shelf registration statements, we will file a prospectus supplement and advise the SEC of the amount and type of securities each time we issue securities under this registration statement. The Company has not issued any securities under this registration statement through the date of this filing.
Our utilization of lot option contracts is dependent on, among other things, the availability of land sellers willing to enter into these arrangements, the availability of capital to finance the development of optioned lots, general housing market conditions and local market dynamics.
Our utilization of lot option contracts is dependent on, among other things, the availability of lot developers willing to enter into these arrangements, the availability of capital to finance the development of optioned lots, general housing market conditions, and local market dynamics.
Net cash used in financing activities for the year ended December 31, 2023 was $93.8 million, compared to a $84.5 million during the year ended December 31, 2022.
Net cash used in financing activities for the year ended December 31, 2024 was $93.5 million, compared to a $93.8 million during the year ended December 31, 2023.
Our debt to total capitalization ratio, which is calculated as the sum of borrowings on lines of credit, the senior unsecured notes, and notes payable, net of debt issuance costs (“total debt”), divided by the total capitalization, which equals the sum of Green Brick Partners, Inc. stockholders’ equity and total debt, was approximately 21.1% as of December 31, 2023.
Our debt to total capitalization ratio, which is calculated as the sum of borrowings on lines of credit, the senior unsecured notes, and notes payable, net of debt issuance costs (“total debt”), divided by the total capitalization, which equals the sum of Green Brick Partners, Inc. stockholders’ equity and total debt, was approximately 17.2% as of December 31, 2024.
As of December 31, 2023, we had a rolling average ratio of 21.9%. As of December 31, 2023, we believe that our cash on hand, capacity available under our lines of credit and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months and fund our operations.
As of December 31, 2024, we had a rolling average ratio of 18.0%. As of December 31, 2024, we believe that our cash on hand, capacity available under our lines of credit, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months and fund our operations.
Additionally, as of December 31, 2023, our net debt to total capitalization ratio, which is a non-GAAP financial measure, remained low at 11.4%. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding activities.
Additionally, as of December 31, 2024, our net debt to total capitalization ratio, which is a non-GAAP financial measure, remained low at 10.7%. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding activities.
(2) Total lots excludes lots with homes under construction. 27 TABLE OF CONTENTS The following table presents additional information on the lots we owned as of December 31, 2023 and December 31, 2022.
(2) Total lots excludes lots with homes under construction. The following table presents additional information on the lots we owned as of December 31, 2024 and December 31, 2023.
We also utilize option contracts with lot sellers as a method of acquiring lots in staged takedowns, which are the schedules that dictate when lots must be purchased to help manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources.
To a much lesser extent due to limited availability in our market of true lot developers, we also utilize option contracts with lot sellers as a method of acquiring lots in staged takedowns, which are the schedules that dictate when lots must be purchased to help manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources.
Our principal uses of capital for the year ended December 31, 2023 were home construction, land purchases, land development, repayments of lines of credit, operating expenses, payment of routine liabilities and stock repurchases. Historically, we have used funds generated by operations and available borrowings to meet our short-term working capital requirements.
Our principal uses of capital for the year ended December 31, 2024 were home construction, land purchases, land development, operating expenses, and payment of routine liabilities. Historically, we have used funds generated by operations and available borrowings to meet our short-term working capital requirements.
Cash Flows The following summarizes our primary sources and uses of cash for the year ended December 31, 2023 as compared to the year ended December 31, 2022: • Operating activities. Net cash provided by operating activities for the year ended December 31, 2023 was $213.3 million, compared to $90.7 million during the year ended December 31, 2022.
Cash Flows The following summarizes our primary sources and uses of cash for the year ended December 31, 2024 as compared to the year ended December 31, 2023: • Operating activities. Net cash provided by operating activities for the year ended December 31, 2024 was $25.9 million, compared to $213.3 million during the year ended December 31, 2023.
Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 6.6% for the year ended December 31, 2023, compared to 13.8% for the year ended December 31, 2022.
Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 7.3% for the year ended December 31, 2024, compared to 6.6% for the year ended December 31, 2023.
Interest accrues at an annual rate of 3.35% and is payable quarterly. Principal on the 2027 Notes is due on August 26, 2027. • In February 2021, we issued $125.0 million of senior unsecured notes (the “2028 Notes”). Interest accrues at an annual rate of 3.25% and is payable quarterly.
Interest accrues at an annual rate of 3.35% and is payable quarterly. Principal on the 2027 Notes is due on August 26, 2027. • In February 2021, we issued $125.0 million of senior unsecured notes (the “2028 Notes”) of which $100.0 million was outstanding as of December 31, 2024.
Debt Instruments Borrowings on lines of credit outstanding, net of debt issuance costs, as of December 31, 2023 and December 31, 2022 consisted of the following (in thousands): December 31, 2023 December 31, 2022 Secured Revolving Credit Facility $ — $ — Unsecured Revolving Credit Facility — 20,000 Debt issuance costs, net of amortization (2,328) (2,605) Total borrowings on lines of credit, net $ (2,328) $ 17,395 Secured Revolving Credit Facility – As of December 31, 2023 and 2022, we had no outstanding amounts under our Secured Revolving Credit Facility.
Debt Instruments Borrowings on lines of credit outstanding, net of debt issuance costs, as of December 31, 2024 and December 31, 2023 consisted of the following (in thousands): December 31, 2024 December 31, 2023 Secured Revolving Credit Facility $ — $ — Unsecured Revolving Credit Facility 25,000 — Debt issuance costs, net of amortization (2,355) (2,328) Total borrowings on lines of credit, net $ 22,645 $ (2,328) Secured Revolving Credit Facility – As of December 31, 2024 and 2023, we had no outstanding amounts under our Secured Revolving Credit Facility.
A required principal prepayment of $30.0 million is due on December 28, 2028. The remaining unpaid principal balance is due on December 28, 2029. Optional prepayment is allowed with payment of a “make-whole” premium that fluctuates depending on market interest rates. Interest is payable quarterly in arrears.
Interest accrues at an annual rate of 3.25% and is payable quarterly. A required principal prepayment of $30.0 million is due on December 28, 2028. The remaining unpaid principal balance is due on December 28, 2029. Optional prepayment is allowed with payment of a “make-whole” premium that fluctuates depending on market interest rates.
As of December 31, 2023, our interest coverage on a last 12 months’ basis was 26.4 to 1.0; • a Consolidated Tangible Net Worth of no less than approximately $820.8 million. As of December 31, 2023, our Consolidated Tangible Net Worth was $1,298.9 million; and • a maximum debt to total capitalization rolling average ratio of no more than 40.0%.
As of December 31, 2024, our interest coverage on a last 12 months’ basis was 34.76 to 1.0; • a Consolidated Tangible Net Worth of no less than approximately $1,010.7 million. As of December 31, 2024, our Consolidated Tangible Net Worth was $1,621.9 million; and • a maximum debt to total capitalization rolling average ratio of no more than 40.0%.
We pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by the Board, at the rate of 5.75% of the $25,000 liquidation preference per share. Dividends are payable quarterly in arrears.
We pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by the Board, at the rate of 5.75% of the $25,000 liquidation preference per share. Dividends are payable quarterly in arrears. During each of the years ended December 31, 2024 and 2023, we paid dividends of $2.9 million on the Series A Preferred Stock.
Borrowings under the Secured Revolving Credit Facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A. as its “Prime Rate” less 0.25%, subject to a minimum rate.
Borrowings under the Secured Revolving Credit Facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A. as its “Prime Rate” less 0.25%, subject to a minimum rate. As amended, this credit agreement matures on May 1, 2025 and carries a minimum interest rate of 3.15%.
Liquidity and Capital Resources Overview As of December 31, 2023 and December 31, 2022, we had $179.8 million and $76.6 million of unrestricted cash, respectively.
Liquidity and Capital Resources Overview As of December 31, 2024 and December 31, 2023, we had $141.5 million and $179.8 million of unrestricted cash and cash equivalents, respectively.
December 31, 2023 December 31, 2022 Total lots owned (1) 23,801 21,481 Land under option for future acquisition and development 2,170 128 Lots under option through unconsolidated development joint ventures 1,541 1,700 Total lots self-developed 27,512 23,309 Self-developed lots as a percentage of total lots owned and controlled (1) 95.9 % 91.3 % (1) Total lots owned includes finished lot purchases, which were less than 3.2% of total lots self-developed as of December 31, 2023.
December 31, 2024 December 31, 2023 Total lots owned (1) 32,716 23,801 Land under option for future acquisition and development 1,440 2,170 Lots under option through unconsolidated development joint ventures 2,869 1,541 Total lots self-developed 37,025 27,512 Self-developed lots as a percentage of total lots owned and controlled (1) 97.9 % 95.9 % (1) Total lots owned includes finished lot purchases, which were less than 1.4% of total lots self-developed as of December 31, 2024.
The net cash inflows for the year ended December 31, 2023 were primarily generated from business operations of $306.7 million, partially offset by an increase in inventory of $109.2 million. • Investing activities.
The net cash inflows for the year ended December 31, 2024 were primarily generated from business operations of $417.2 million offset by an increase in inventory of $403.3 million. 29 TABLE OF CONTENTS • Investing activities.
Builder Operations Selling, general and administrative expenses as a percentage of revenue for builder operations increased from 9.5% to 10.9% due to an increase in brokerage commissions. Builder operations expenditures include salaries, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.
Builder Operations Selling, general and administrative expenses as a percentage of revenue for builder operations remained flat year over year. Builder operations expenditures include salaries, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.
Corporate, Other and Unallocated Selling, general and administrative expense for the corporate, other and unallocated non-operating segment for the year ended December 31, 2023 was income of $0.3 million, compared to income of $3.5 million for the year ended December 31, 2022.
Corporate, Other and Unallocated Selling, general and administrative expense for the corporate, other and unallocated non-operating segment for the year ended December 31, 2024 was $8.1 million, compared to income of $0.3 million for the year ended December 31, 2023. The increase was driven by incentive compensation and charitable donations during the year ended December 31, 2024.
See Note 5 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a summary of Green Brick’s share in net earnings by unconsolidated entity. 26 TABLE OF CONTENTS Other Income, Net Other income, net, increased to $19.4 million for the year ended December 31, 2023, compared to $11.8 million for the year ended December 31, 2022.
See Note 5 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a summary of Green Brick’s share in net earnings by unconsolidated entity.
On February 15, 2024, the Board declared a quarterly cash dividend of $0.359 per depositary share on the Series A Preferred Stock. The dividend is payable on March 15, 2024 to stockholders of record as of March 1, 2024.
During the year ended December 31, 2022, we paid dividends of $2.8 million. On February 17, 2025, the Board declared a quarterly cash dividend of $0.359 per depositary share on the Series A Preferred Stock. The dividend is payable on March 15, 2025 to stockholders of record as of March 1, 2025.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 For discussion and analysis of our results of operations for the year ended December 31, 2022 as well as for comparison to our results of operations for the year ended December 31, 2021, refer to Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2022.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For discussion and analysis of our results of operations for the year ended December 31, 2023 as well as for comparison to our results of operations for the year ended December 31, 2022, refer to Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023. 27 TABLE OF CONTENTS Lots Owned and Controlled The following table presents the lots we owned or controlled, including lot option contracts, as of December 31, 2024 and December 31, 2023.
Our results for each key financial and operating metric, as compared to the year ended December 31, 2022, are provided below: Year Ended December 31, 2023 Home deliveries Increased by 7.1% Home closings revenue Increased by 4.2% Average sales price of homes delivered Decreased by 2.7% Net new home orders Increased by 70.1% The strong performance on most of our key metrics year over year is attributable to our superior infill and infill-adjacent locations in high-growth markets, our reduced cycle times, the continued low supply of existing and new home inventory in our markets, and increased revenue by our Texas builders.
Our results for each key financial and operating metric, as compared to the year ended December 31, 2023, are provided below: Year Ended December 31, 2024 Home deliveries Increased by 21.1% Home closings revenue Increased by 17.1% Average sales price of homes delivered Decreased by 3.4% Net new home orders Increased by 9.7% Homebuilding gross margin percentage Increased by 290 bps The strong performance on most of our key metrics year over year is attributable to our superior infill and infill-adjacent locations in high-growth markets, our land strategy to self-develop raw land into finished lots that are held on our balance sheet, our reduced cycle times, and the strong demand for new homes in our markets.
The decrease in the average sales price of homes delivered is attributable to an increase in the percentage of home deliveries by Trophy Signature Homes, Centre Living Homes, and CB JENI Homes over last year.
The decrease in the average sales price of homes delivered is primarily attributable to an increase in the percentage of home deliveries by 24 TABLE OF CONTENTS Trophy Signature Homes over the last year and higher incentives driven by the high mortgage rate environment.
The increase in net new home orders is attributable to the increase in our active selling communities, the limited competition in our infill and infill-adjacent community sites, improved homebuyer sentiment, and the continued low supply of existing and new home inventory in our markets.
The increase in net new home orders is attributable to the increase in our active selling communities, the limited competition in our infill and infill-adjacent community sites, and the strength in demand in our primary higher growth markets.
The aggregate amount of senior unsecured notes outstanding was $336.2 million as of December 31, 2023, compared to $335.8 million as of December 31, 2022, respectively, net of issuance costs. • In August 2019, we issued $75.0 million of senior unsecured notes (the “2026 Notes”). Interest accrues at an annual rate of 4.0% and is payable quarterly.
The aggregate amount of senior unsecured notes outstanding was $299.1 million as of December 31, 2024, compared to $336.2 million as of December 31, 2023, respectively, net of issuance costs. • In August 2019, we issued $75.0 million of senior unsecured notes (the “2026 Notes”) of which $62.5 million was outstanding as of December 31, 2024.
Our debt instruments require us to maintain specific financial covenants, each of which we were in compliance with as of December 31, 2023. Specifically, under the most restrictive covenants, we are required to maintain the following: • a minimum interest coverage (consolidated EBITDA to interest incurred) of no less than 2.0 to 1.0.
Specifically, under the most restrictive covenants, we are required to maintain the following: • a minimum interest coverage (consolidated EBITDA to interest incurred) of no less than 2.0 to 1.0.
Reconciliation of a Non-GAAP Financial Measure In this Annual Report on Form 10-K, we utilize a financial measure of net debt to total capitalization ratio that is a non-GAAP financial measure as defined by the Securities and Exchange Commission (“SEC”).
We target a debt to total capitalization ratio of approximately 20%, which we expect will provide us with significant additional growth capital. Reconciliation of a Non-GAAP Financial Measure In this Annual Report on Form 10-K, we utilize a financial measure of net debt to total capitalization ratio that is a non-GAAP financial measure as defined by the SEC.
Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Residential Units Revenue and New Homes Delivered The table below represents residential units revenue and new homes delivered for the years ended December 31, 2023 and December 31, 2022 (dollars in thousands): Years Ended December 31, 2023 2022 Change % Home closings revenue $ 1,767,788 $ 1,696,911 $ 70,877 4.2 % Mechanic’s lien contracts revenue 1,467 7,040 (5,573) (79.2) % Residential units revenue $ 1,769,255 $ 1,703,951 $ 65,304 3.8 % New homes delivered 3,123 2,916 207 7.1 % Average sales price of homes delivered $ 566.1 $ 581.9 $ (15.8) (2.7) % The $65.3 million increase in residential units revenue was driven by the 7.1% increase in the number of homes delivered partially offset by a 2.7% decrease in average sales price of new homes delivered.
Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Residential Units Revenue and New Homes Delivered The table below represents residential units revenue and new homes delivered for the years ended December 31, 2024 and December 31, 2023 (dollars in thousands): Years Ended December 31, 2024 2023 Change % Home closings revenue $ 2,069,756 $ 1,767,788 $ 301,968 17.1 % Mechanic’s lien contracts revenue 380 1,467 (1,087) (74.1) % Residential units revenue $ 2,070,136 $ 1,769,255 $ 300,881 17.0 % New homes delivered 3,783 3,123 660 21.1 % Average sales price of homes delivered $ 547.1 $ 566.1 $ (19.0) (3.4) % The $300.9 million increase in residential units revenue was driven by the 21.1% increase in the number of homes delivered partially offset by a 3.4% decrease in average sales price of new homes delivered.
December 31, 2023 December 31, 2022 Central Southeast Total Central Southeast Total Lots owned Finished lots 4,014 964 4,978 1,901 998 2,899 Lots in communities under development 9,122 1,335 10,457 10,309 1,698 12,007 Land held for future development (1) 8,366 — 8,366 6,575 — 6,575 Total lots owned 21,502 2,299 23,801 18,785 2,696 21,481 Lots controlled Lots under option contracts 1,169 — 1,169 2,212 6 2,218 Land under option for future development 1,710 460 2,170 110 18 128 Lots under option through unconsolidated development joint ventures 1,210 331 1,541 1,289 411 1,700 Total lots controlled 4,089 791 4,880 3,611 435 4,046 Total lots owned and controlled (2) 25,591 3,090 28,681 22,396 3,131 25,527 Percentage of lots owned 84.0 % 74.4 % 83.0 % 83.9 % 86.1 % 84.2 % (1) Land held for future development consist of raw land parcels where development activities have been postponed due to market conditions or other factors.
December 31, 2024 December 31, 2023 Central Southeast Total Central Southeast Total Lots owned Finished lots 3,932 790 4,722 4,014 964 4,978 Lots in communities under development 22,524 1,670 24,194 9,122 1,335 10,457 Land held for future development (1) 3,800 — 3,800 8,366 — 8,366 Total lots owned 30,256 2,460 32,716 21,502 2,299 23,801 Lots controlled Lots under option contracts 806 — 806 1,169 — 1,169 Land under option for future development 1,091 349 1,440 1,710 460 2,170 Lots under option through unconsolidated development joint ventures 2,614 255 2,869 1,210 331 1,541 Total lots controlled 4,511 604 5,115 4,089 791 4,880 Total lots owned and controlled (2) 34,767 3,064 37,831 25,591 3,090 28,681 Percentage of lots owned 87.0 % 80.3 % 86.5 % 84.0 % 74.4 % 83.0 % (1) Land held for future development consist of raw land parcels where development activities have been postponed due to market conditions or other factors.
The following table represents a reconciliation of the net debt to total capitalization ratio as of December 31, 2023 (dollars in thousands): Gross Cash and cash equivalents Net Total debt, net of debt issuance costs $ 346,860 $ (179,756) $ 167,104 Total Green Brick Partners, Inc. stockholders’ equity 1,300,704 — 1,300,704 Total capitalization $ 1,647,564 $ (179,756) $ 1,467,808 Debt to total capitalization ratio 21.1 % — — Net debt to total capitalization ratio — — 11.4 % Key Sources of Liquidity Our key sources of liquidity were funds generated by operations and provided by borrowings during the year ended December 31, 2023.
The following table represents a reconciliation of the net debt to total capitalization ratio as of December 31, 2024 (dollars in thousands): Gross Cash and cash equivalents Net Total debt, net of debt issuance costs $ 336,606 $ (141,543) $ 195,063 Total Green Brick Partners, Inc. stockholders’ equity 1,625,415 — 1,625,415 Total capitalization $ 1,962,021 $ (141,543) $ 1,820,478 Debt to total capitalization ratio 17.2 % — — Net debt to total capitalization ratio — — 10.7 % Key Sources of Liquidity Our key sources of liquidity were funds generated by operations and provided by borrowings during the year ended December 31, 2024.
Lots revenue decreased by 61.1% during the year ended December 31, 2023, driven by a 74.7% decrease in the number of lots closed partially offset by a 53.4% increase in the average lot price. Land revenue represents sales of tracts of land during the year ended December 31, 2022 and 2023.
Lots revenue increased by 98.3% during the year ended December 31, 2024, driven by a 153.4% increase in the number of lots closed partially offset by a 21.7% decrease in the average lot price.
Lots Owned and Controlled The following table presents the lots we owned or controlled, including lot option contracts, as of December 31, 2023 and December 31, 2022. Owned lots are those for which we hold title, while controlled lots are lots past feasibility studies for which we do not hold title, but have the contractual right to acquire title.
Owned lots are those for which we hold title, while controlled lots are lots past feasibility studies and approved by land committee for which we do not hold title, but have the contractual right to acquire title.
Land and Lots Revenue The table below represents lots closed and land and lots revenue (dollars in thousands): Years Ended December 31, 2023 2022 Change % Lots revenue $ 7,426 $ 19,090 $ (11,664) (61.1) % Land revenue 1,029 34,752 (33,723) (97.0) % Land and lots revenue $ 8,455 $ 53,842 $ (45,387) (84.3) % Lots closed 73 288 (215) (74.7) % Average sales price of lots closed $ 101.7 $ 66.3 $ 35.4 53.4 % From time to time, we will opportunistically sell finished lots to other homebuilders when we determine that we have excess capacity in specific neighborhoods or submarkets.
Land and Lots Revenue The table below represents lots closed and land and lots revenue (dollars in thousands): Years Ended December 31, 2024 2023 Change % Lots revenue $ 14,723 $ 7,426 $ 7,297 98.3 % Land revenue 14,084 1,029 13,055 1,268.7 % Land and lots revenue $ 28,807 $ 8,455 $ 20,352 240.7 % Lots closed 185 73 112 153.4 % Average sales price of lots closed $ 79.6 $ 101.7 $ (22.1) (21.7) % From time to time we will opportunistically sell finished lots to other homebuilders when we determine that we have excess capacity in specific neighborhoods or submarkets.
Residential Units Gross Margin The table below represents the components of residential units gross margin (dollars in thousands): Years Ended December 31, 2023 2022 Home closings revenue $ 1,767,788 100.0 % $ 1,696,911 100.0 % Cost of homebuilding units 1,222,134 69.1 % 1,190,782 70.2 % Homebuilding gross margin $ 545,654 30.9 % $ 506,129 29.8 % Mechanic’s lien contracts revenue $ 1,467 100.0 % $ 7,040 100.0 % Cost of mechanic’s lien contracts 945 64.4 % 6,132 87.1 % Mechanic’s lien contracts gross margin $ 522 35.6 % $ 908 12.9 % Residential units revenue $ 1,769,255 100.0 % $ 1,703,951 100.0 % Cost of residential units 1,223,079 69.1 % 1,196,914 70.2 % Residential units gross margin $ 546,176 30.9 % $ 507,037 29.8 % 25 TABLE OF CONTENTS Residential units revenue increased by $65.3 million or 3.8% during the year ended December 31, 2023 due to the increase in home deliveries partially offset by a reduction in average sales price.
Our cancellation rate remained in a historically low range under 10.0% since December 31, 2022. 25 TABLE OF CONTENTS Residential Units Gross Margin The table below represents the components of residential units gross margin (dollars in thousands): Years Ended December 31, 2024 2023 Home closings revenue $ 2,069,756 100.0 % $ 1,767,788 100.0 % Cost of homebuilding units 1,370,613 66.2 % 1,222,134 69.1 % Homebuilding gross margin $ 699,143 33.8 % $ 545,654 30.9 % Mechanic’s lien contracts revenue $ 380 100.0% $ 1,467 100.0 % Cost of mechanic’s lien contracts 275 72.4 % 945 64.4 % Mechanic’s lien contracts gross margin $ 105 27.6 % $ 522 35.6 % Residential units revenue $ 2,070,136 100.0 % $ 1,769,255 100.0 % Cost of residential units 1,370,888 66.2 % 1,223,079 69.1 % Residential units gross margin $ 699,248 33.8 % $ 546,176 30.9 % Residential units revenue increased by $300.9 million or 17.0% during the year ended December 31, 2024, mainly due to an increase in home deliveries of 21.1% partially offset by a 3.4% reduction in average sales price of homes delivered as discussed above.
These homebuilders had an average sales price below the Company average. 2023 Developments Among the 12 largest metropolitan areas in the country, the Dallas and Atlanta areas ranked first and seventh, respectively, in annual rate of job growth from November 2022 to November 2023 (Source: US Bureau of Labor Statistics, November 2023).
We maintained a strong homebuilding gross margin of 33.8%. 2024 Developments Among the 12 largest metropolitan areas in the country, the Dallas and Atlanta areas ranked second and tenth, respectively, in annual rate of job growth from November 2023 to November 2024 (Source: US Bureau of Labor Statistics, November 2024).
The cash outflows for the year ended December 31, 2023 were primarily for share repurchases of $45.8 million, net repayments on our lines of credit of $20.0 million and distributions to noncontrolling interests of $19.1 million.
The cash outflows for the year ended December 31, 2024 were primarily related to share repurchases of $48.4 million, net borrowings on our lines of credit of $25.0 million, and repayments of our senior unsecured notes of $37.5 million.
Backlog increased by 50.4% with a 43.4% increase in backlog units and a 4.9% increase in the average sales price of backlog units. As a result, our spec units under construction as a percentage of total units under construction declined from 73.4% as of December 31, 2022 to 69.8% as of December 31, 2023.
Backlog revenue decreased by 10.7% due to a 13.2% decrease in backlog units partially offset by a 3.0% increase in the average sales price of backlog units. As a result, our spec units under construction as a percentage of total units under construction increased from 69.8% as of December 31, 2023 to 75.6% as of December 31, 2024.
Selling, General and Administrative Expenses The table below represents the components of selling, general and administrative expense (dollars in thousands): Years Ended December 31, As Percentage of Segment Revenue 2023 2022 2023 2022 Builder operations $ 192,827 $ 166,816 Corporate, other and unallocated (income) expense (254) (3,494) Net builder operations 192,573 163,322 10.9 % 9.5 % Land development 404 621 5.1 % 1.3 % Total selling, general and administrative expenses $ 192,977 $ 163,943 10.9 % 9.3 % Selling, general and administrative expense as a percentage of revenue increased by 1.6% for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in brokerage commissions.
Land revenue represents sales of two tracts of commercial land during the year ended December 31, 2024. 26 TABLE OF CONTENTS Selling, General and Administrative Expenses The table below represents the components of selling, general and administrative expense (dollars in thousands): Years Ended December 31, As Percentage of Segment Revenue 2024 2023 2024 2023 Builder operations $ 218,200 $ 192,827 Corporate, other and unallocated (income) expense 8,084 (254) Net builder operations 226,284 192,573 10.9 % 10.9 % Land development 282 404 1.0 % 5.1 % Total selling, general and administrative expenses $ 226,566 $ 192,977 10.8 % 10.9 % Selling, general and administrative expense as a percentage of revenue was 10.8% for the year ended December 31, 2024, which is substantially in line with 10.9% for the year ended December 31, 2023.
Principal on the 2026 Notes is required to be paid in increments of $12.5 million on each of August 8, 2024 and August 8, 2025 with a final principal payment of $50.0 million on August 8, 2026. • In August 2020, we issued $37.5 million of senior unsecured notes (the “2027 Notes”).
Interest accrues at an annual rate of 4.0% and is payable quarterly. Principal on the 2026 Notes of $12.5 million is due on August 8, 2025 and the remaining principal amount of $50.0 million is due on August 8, 2026. • In August 2020, we issued $37.5 million of senior unsecured notes (the “2027 Notes”).
Cost of residential units for the year ended December 31, 2023 increased by $26.2 million, or 2.2%, compared to the year ended December 31, 2022 due to the increase in units delivered. The residential units gross margin percentage for the year ended December 31, 2023 increased to 30.9%, compared to 29.8% for the year ended December 31, 2022.
Residential units gross margin for the year ended December 31, 2024 increased to 33.8%, compared to 30.9% for the year ended December 31, 2023.
All other material terms of the credit agreement, as amended, remained unchanged. 29 TABLE OF CONTENTS Unsecured Revolving Credit Facility – As of December 31, 2023, we had no amounts outstanding under our Unsecured Revolving Credit facility compared to $20 million as of December 31, 2022.
Unsecured Revolving Credit Facility – As of December 31, 2024, we had $25 million outstanding under our Unsecured Revolving Credit facility compared no amounts outstanding as of December 31, 2023.
Net cash used in investing activities for the year ended December 31, 2023 increased to $13.3 million compared to $6.5 million for the year ended December 31, 2022. The increase in cash outflows was primarily due to the purchase of property and equipment, net of disposals of $7.8 million during the year ended December 31, 2023. • Financing activities.
Net cash provided by investing activities for the year ended December 31, 2024 was $27.8 million compared to net cash used of $13.3 million during the year ended December 31, 2023.
The increase in residential units gross margin is primarily due to strong sales, lower construction costs, and limited competition in our infill and infill-adjacent community sites.
The increase in residential units gross margin is primarily due to limited competition in our infill and infill-adjacent community sites, our self-development strategy, our high growth primary markets of DFW and Atlanta, our infill locations, and our expertise in site selection.
There are instances in which sales contracts are canceled after execution, such as when the homebuyer cancels because of the inability to obtain suitable mortgage financing within a contractually specified time period. Accordingly, backlog may not be indicative of our future revenue.
Sales contracts may be canceled prior to closing for a number of reasons, including the inability of the homebuyer to obtain suitable mortgage financing. Accordingly, backlog may not be indicative of our future revenue.
The Eleventh Amendment also extends the maturity of $300.0 million of the commitments under the credit facility through December 14, 2026, with the remaining $25.0 million commitment expiring December 14, 2025. Senior Unsecured Notes - As of December 31, 2023, we had four series of senior unsecured notes outstanding which were each issued pursuant to a note purchase agreement.
Senior Unsecured Notes - As of December 31, 2024, we had four series of senior unsecured notes outstanding which were each issued pursuant to a note purchase agreement.
The change was primarily due to an increase in interest income. Income Tax Expense Income tax expense increased to $84.6 million for the year ended December 31, 2023 from $82.5 million for the year ended December 31, 2022. The increase was primarily due to a reduction in Section 45L tax credits and increased state tax expense.
Income Tax Expense Income tax expense increased to $94.7 million for the year ended December 31, 2024 from $84.6 million for the year ended December 31, 2023. The increase was substantially due to higher taxable income partially offset by investment tax credits purchased at a discount and an income tax benefit for equity compensation deductions.
Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions. We generally have the right, at our discretion, to terminate our obligations under both purchase contracts and option contracts by forfeiting the earnest money deposit with no further financial responsibility to the seller.
Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.
As of December 31, 2023, we had earnest money deposits of $13.4 million at risk associated with contracts to purchase 3,757 lots past feasibility studies with an aggregate purchase price of approximately $177.0 million.
We generally have the right, at our discretion, to terminate our obligations under both purchase contracts and option contracts by forfeiting the earnest money deposit with no further financial responsibility to the seller. 31 TABLE OF CONTENTS As of December 31, 2024, we had earnest money deposits of $9.7 million at risk associated with contracts to purchase 2,975 lots past feasibility studies with an aggregate purchase price of approximately $160.3 million.
Equity in Income of Unconsolidated Entities Equity in income of unconsolidated entities decreased to $16.7 million, or 34.7%, for the year ended December 31, 2023, compared to $25.6 million for the year ended December 31, 2022, primarily due to a decrease in earnings from GB Challenger.
Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments. Equity in Income of Unconsolidated Entities Equity in income of unconsolidated entities decreased to $5.1 million, or 69.6%, for the year ended December 31, 2024, compared to $16.7 million for the year ended December 31, 2023.
Removed
The decrease in the average sales price of homes delivered is attributable to an increase in the percentage of home deliveries by Trophy Signature Homes, Centre Living Homes, and CB JENI Homes over last year.
Added
Our average active selling communities increased 18.8%, while the average sales price of homes delivered decreased 3.4% due to a combination of product mix and a high mortgage rate environment.
Removed
The change was driven primarily by an increase in capitalized overhead adjustments that are not allocated to our builder operations and land development segments.
Added
Trophy had an average sales price below the Company average due to a mix of product type and selling more inventory in perimeter locations.
Removed
We target a debt to total capitalization ratio of approximately 30%, which we expect will provide us with significant additional growth capital.
Added
As a result, our absorption rate per average active selling community decreased 8.1% year over year, which we believe is due to elevated mortgage rates, high interest rate volatility, and the lock-in effect of homeowners with existing lower rate mortgages.
Removed
On February 9, 2022, the Company entered into the Eighth Amendment to this credit agreement to extend its maturity date to May 1, 2025 and to reduce the minimum interest rate from 4.00% to 3.15%.
Added
Cost of residential units as a percent of residential units revenue for the year ended December 31, 2024 decreased to 66.2% compared to 69.1% in the previous year due to a combination of product mix and a focus on delivering more affordable product to combat high interest rates.
Removed
On December 8, 2023, the Company entered into the Eleventh Amendment to this credit agreement which revised certain financial covenants in order to appropriately reflect the Company’s size and growth.
Added
This decrease is mainly due to the sale of our ownership interest in Challenger during the three months ended March 31, 2024, wherein, we recognized only one month of net earnings from this investment during 2024 compared to twelve months in the prior year.
Removed
During the year ended December 31, 2023 and December 31, 2022, we paid dividends of $2.9 million and $2.8 million, respectively, on the Series A Preferred Stock. As the series A Preferred Stock was issued in December 2021, no dividend payments were made during the year ended December 31, 2021.
Added
Other Income, Net Other income, net, increased to $29.8 million for the year ended December 31, 2024, compared to $19.4 million for the year ended December 31, 2023. The change was primarily due to a $10.7 million gain in the sale of our investment in Challenger.
Added
Effective February 1, 2024, we sold our ownership interest in GB Challenger, LLC (“Challenger”) to the entity that already held the controlling interest in Challenger for approximately $64.0 million in cash.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our operations are interest rate sensitive. Because overall housing demand is adversely affected by increases in interest rates, a significant increase in mortgage interest rates may negatively affect the ability of homebuyers to secure adequate financing.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our operations are interest rate sensitive. A significant increase in mortgage interest rates may negatively affect the ability of homebuyers to secure adequate financing because overall housing demand is adversely affected by increases in interest rates. Higher interest rates could adversely affect our revenues, gross margins and net income.
Our debt obligations, annual maturity amounts, weighted average interest rates, and estimated fair market value of our senior unsecured notes for the year ended December 31, 2023 are summarized below (amounts in thousands): Years ended December 31, 2024 2025 2026 2027 2028 2029 Total Fair Value at December 31, 2023 Liabilities: Senior unsecured notes Principal repayments 37,500 37,500 75,000 62,500 55,000 70,000 337,500 $ 322,481 Weighted Average interest rate 3.43 % 3.42 % 3.37 % 3.27 % 3.25 % 3.25 % 3.37 % We do not enter into, or intend to enter into, swaps, forward or option contracts on interest rates or commodities or other types of derivative financial instruments for trading, hedging or speculative purposes.
Our debt obligations, annual maturity amounts, weighted average interest rates, and estimated fair market value of our senior unsecured notes for the year ended December 31, 2024 are summarized below (amounts in thousands): Years ended December 31, 2025 2026 2027 2028 2029 Total Fair Value at December 31, 2024 Liabilities: Senior unsecured notes Principal repayments 37,500 75,000 62,500 55,000 70,000 300,000 $ 287,200 Weighted Average interest rate 3.42 % 3.37 % 3.27 % 3.25 % 3.25 % 3.34 % We do not enter into, or intend to enter into, swaps, forward or option contracts on interest rates or commodities or other types of derivative financial instruments for trading, hedging or speculative purposes.
As of December 31, 2023, we had no amounts outstanding under our revolving credit facilities. For fixed rate debt, such as our senior unsecured notes, changes in interest rates have an impact on the fair value of the debt instrument, not on our earnings or cash flows.
For fixed rate debt, such as our senior unsecured notes, changes in interest rates have an impact on the fair value of the debt instrument, not on our earnings or cash flows. The following table provides information about our significant fixed rate instruments that are sensitive to changes in interest rates.
Higher interest rates could adversely affect our revenues, gross margins and net income. 32 TABLE OF CONTENTS Our lines of credit have variable interest rates which are subject to minimum interest rates. An increase in interest rates could cause the cost of those lines to increase.
Our lines of credit have variable interest rates that are subject to minimum interest rates. An increase in interest rates could cause the cost of those lines to increase. As of December 31, 2024, we had $25.0 million outstanding under our revolving credit facilities.
Removed
The following table provides information about our significant fixed rate instruments that are sensitive to changes in interest rates.

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