Calabasas-based home builder Ryland Group Inc. said its chief executive would retire in May and be replaced by the company's current president.
R. Chad Dreier, 61, has served as CEO for more than 15 years and will continue as chairman after he steps down May 29. President Larry Nicholson, 51, will take on the CEO title -- and all the problems of the most miserable housing market in decades.
The transition, announced after markets closed Wednesday, has been in the works for three years, but with one grandchild and another on the way, Dreier also had personal reasons to retire, said company spokesman Eric Elder.
Ryland, founded in 1967, operates in 15 states and says it has built more than 280,000 homes and financed more than 235,000 mortgages.
But the company has been hard hit by the housing bust and recession, which have stifled demand for new homes. Its stock, which has fallen more than 10% this year, dropped nearly 6% to $15.88 before Wednesday's announcement.
Last year brought heavy layoffs, and the company also reported its eighth consecutive quarterly loss in late January.
"There are lots of issues in our business, so executives have to deal with the preservation of cash and the continued building of cash stores, while providing good, solid guidance on making sales in a very tough, challenging market and positioning the company for when things start to open up," Elder said.
On Feb. 2, Ryland formed a company with Los Angeles-based Oaktree Capital Management to buy distressed real estate "to take advantage of the current dislocation" in the home-building market, according to a company statement. The company will buy mostly residential land or buildings along with some commercial properties, improve them and put them up for sale.
Dreier joined Ryland in 1993 as president and CEO and added the title of chairman a year later. In 1996, Nicholson was hired as vice president of operations. He was promoted to chief operating officer in 2007 and became president in September 2008.
"It's just the right time to transition leadership before the next giant upswing in the economy," Elder said.
"There are a lot of challenges Mr. Nicholson will have to deal with. Homes are getting smaller, more affordable, and the financing and credit markets are changing with the competitive landscape. It's the next phase of American home building," he said.