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KB Home Calls It Quits for DC

WASHINGTON, DC—The company entered the market during the height of the housing cycle and couldn't establish enough scale.

By Erika Morphy | erikamorphy | | Updated on May 16, 2016
Autumn Overlook in Ellicott City Autumn Overlook in Ellicott City
WASHINGTON, DC—Los Angeles-based KB Home is pulling out of the Washington DC market after failing to get the necessary traction. It plans to transition out of area over the next 12 months. “We entered the Metro DC region late in the previous housing cycle, and have not been able to establish the scale necessary to generate solid returns,” CEO Jeffrey Mezger said in a prepared statement. The company expects to record a largely non-cash, pretax charge in its 2016 second quarter of between $6 million and $8 million related to the transition. The communities it has established in the area represent about 2% of its overall project count. KB Home says it will continue building in the six communities it has established in this area and build out or sell the land holdings that it has here. It will also maintain a team to provide warranty services and support to homebuyers here. Its communities in the area are  Autumn Overlook in Ellicott City, MD; the Crown in Gaithersburg, MD; Eastchurch in Frederick, MD; East Gate in Chantilly, VA and Stonewall and Middletown Woods in Waldorf, MD.

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