Green Brick Trims 2026 Land Budget To $780 Million, Says Good Deals Are Scarce
Co-CEO Jim Brickman says the homebuilder is "very cautious" on land and sees early labor strain in Austin.
Green Brick Partners, a homebuilder and land developer, cut its planned 2026 land spending to $780 million, down from the $850 million it gave on its last call, Co-Chief Executive Jed Dolson said on the company's third-quarter earnings call. Co-Founder and Co-CEO Jim Brickman said the company is "very cautious" because deals that meet its return targets are hard to find.
Where the land money goes
Dolson said the $780 million splits into about $350 million of land and lot purchases and about $430 million of development outflows, excluding reimbursements. Through September 30, the company had spent about $597 million: $323 million on development and $274 million on acquisitions.
Asked by an analyst at BTIG about its land philosophy, Brickman said, "Cautious, very cautious." Underwriting now has to assume 10% elevated incentives, he said, which makes it hard to find deals that deliver the internal rate of return the company wants.
Brickman said "Low margin C minus D location deals are plentiful," and that peers trading them among themselves are rearranging "deck chairs in the Titanic." Of that, he said, "we're not playing that game," though the company will move on a deal that makes sense. Asked whether land prices are resetting, he said, "They are on lots we don't want."
A pipeline that allows patience
Green Brick, which builds homes through seven brands in Texas, Atlanta and Florida's Treasure Coast, owned 40,869 lots at September 30 and controlled another 10,566 under contract, for 51,435 in total. Brickman said that pipeline lets it stay patient.
Houston, where the company has one community open, is a market it is eyeing "very cautiously," Brickman said. "If it doesn't underwrite, we're not going to expand just to generate revenue."
Margins squeezed, labor tightening
Net income was $59.2 million, or $1.35 per diluted share, down 24% from a year earlier. Home closing revenue fell 9.8% to $437 million as average selling price dropped 12.1% to about $447,000, and homebuilding gross margin was 28%, down 410 basis points (4.1 percentage points). Incentives rose to 9.9% of home closing revenue. Deliveries rose 2.6% to 978 homes.
Brickman also described "the first sign of immigration headwinds," with labor constraints in Austin in masonry, electrical, drywall and framing. He said he does not expect much further gain in cycle times or value engineering. Dolson said the company has not seen a measurable impact on operations so far, and cycle time averaged 116 days.
Dolson said average selling price, down 12.1% in the third quarter, could move slightly lower in the fourth as more Trophy Signature Homes communities open.
Sources
- Green Brick Partners, Inc. Reports Third Quarter 2026 Results – Company Announcement - FT.com — Financial Times
- Green Brick Partners: Q3 Earnings Snapshot – WTOP News — wtop.com
