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Martha Stewart living, KB style

July 29, 2007|Sam Byker | Times Staff Writer

Ninety minutes east of Los Angeles, in the scorching heat and barren hills of western Riverside County, a bit of New England is rising out of the desert. And California home buyers are intrigued.

The East Coast-style models in developer KB Home's 125-unit Olive Grove tract draw some 70 visitors a week, more than double the number who visit the developer's adjacent communities. Executives at the company think they know why.

Two years ago, Los Angeles-based KB teamed up with style maven and domestic diva Martha Stewart. The resulting line of homes, inspired by Stewart's own in New York, Connecticut and Maine, is the company's hottest seller.

Approaching Olive Grove from the west, visitors pass no fewer than seven billboards for the community. Martha beams down at potential home buyers from each, her face occupying almost half of the space.

At the sales center, photos of Stewart line the walls. Her eyes gleam from magazines arranged on each model home's countertop, and she cheerfully instructs visitors on her favorite cookie recipes over and over again from a wide-screen television mounted in the design studio.

Stewart's handiwork, as salespeople repeatedly point out, is clearly evident in the homes. The famed decorator's tastes can be seen in touches such as wainscoting and open shelving. Stewart's more functional designs include such features as a kitchen sink large enough to clean a turkey and a mud room off the garage for dirty shoes and coats.

The gray-blues and sea-foam greens of Olive Grove lie next to a sea of beige tract homes that KB has been building in the city of Perris for over 20 years. The development, known as May Ranch, contains five communities -- including Olive Grove -- along with three schools and several parks.

Although features such as the mud room may not get much use here -- the city has received a grand total of 1.01 inches of rain this year -- the homes' designs nonetheless seem to appeal to Southern Californians.

Just recently, Michael and Vicki Aaenson paid $372,000 for a four-bedroom, 2,968-square-foot home in Olive Grove.

"We looked for months at every tract we could find," said Vicki Aaenson, visiting the community with her husband on a recent Saturday to check on their home's progress. To the couple, nothing seemed right until they saw the Stewart homes.

"We're not really Martha fans," said Aaenson, but "we've done a lot of entertaining, and this house is so well laid-out for it." Stewart "is a very savvy businesswoman

so we can't imagine she didn't do this well."

Buyers can choose among multiple floor plans and exterior styles, each based on one of Martha's residences.

Norm Lynde was the first buyer to close escrow on a home in Olive Grove, in May. He chose a three-bedroom, 2,496-square-foot home with upgrades for $440,000 in the style of Martha's Long Island beach resort, named Lily Pond after the tastemaker's eastern shore address.

He also could have picked the colonial-style Katonah, a nod to Stewart's Connecticut and New York homes, or the contemporary stone-sided Skylands, styled after her Maine estate.

Now Lynde is working on the interior, which he's decorated in Mission-style furniture to match the cherry-colored flooring. A few possessions from his old home remain, though, and things such as the ratty old couch in his living room make Lynde worry about upholding Stewart's design standards.

"I feel comfortable just giving myself time to get it right," he said, "… although I think Martha would be ashamed of the sofa."

KB's first community built with Stewart opened in Raleigh, N.C., in spring 2006. Its first and second phases sold out quickly, prompting the company to expand the partnership to 10 more markets. Olive Grove is the result of that expansion, as is a community opening in Lancaster in the middle of next month.

If the development's New England styling seems a bit surreal against the dry and rocky California hills -- think Grandma Moses meets Thomas Moran -- it nonetheless draws more buyers than any other KB development in the area, said KB Home Chief Executive Jeffrey Mezger.

"The Riverside-San Bernardino market is quite soft right now," Mezger said. In response, KB Home has cut prices on certain Olive Grove models since January.

Still, Mezger added, the idea behind the homes "generates traffic and buyers that benefit us in our other communities as well."

By pricing Martha-designed homes competitively to those in nearby developments, KB is using Stewart's star power to push sales rather than command a premium.

"We've gotten letters from consumers who pass through these homes, who aren't going to purchase the house, but want to buy furniture in a room or find out what color paint is on the wall," said Gael Towey, chief creative officer of Martha Stewart Living Omnimedia.

"It's a great deal" for the company, said Michael Meltz, an analyst at Bear Stearns. "They get good awareness of their brand and a license fee" of up to $10,000 for every home sold.

The KB-Martha Stewart partnership represents a dramatic departure for the traditional housing market, said Susan M. Wachter, a professor of real estate at the University of Pennsylvania.

Involving someone such as Stewart adds a well-known and respected brand name to the homes, and that can help sales. It's an idea Wachter expects to see more of in the near future.

"If you knock on other people's doors 10 years down the road, they won't know who built their home," said Bob Kronenfeld, KB's regional director of marketing. "Here, no one is going to forget."

KB does not believe that its partnership with Stewart's company will ever make up more than 5% of its sales, but the company hopes to eventually build a Martha-designed community in each of its 35 markets.

If the homes continue to sell well, other builders may start to seek celebrity partners of their own. But KB isn't worried.

"We have a distinct advantage here," Mezger said. "There's only one Martha."


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