Elevate Halts Purchase of Kentucky Facility but Maintains Strategic DirectionJanuary 12th, 2023 by Travis Rains
While inflation and associated market conditions have thrown a wrench into the company’s plan to purchase a building in Hopkinsville, Ky., Elevate Windows and Doors remains “100% committed” to entering the Kentucky-Tennessee corridor, says CEO James Gresham. Gresham says Elevate is currently pursuing other options, such as leasing space—a move that would still give the company a foothold in a market in which it sees opportunity.
At the end of September 2022, Elevate announced that it would invest more than $16 million into the purchase of a 100,000-square-foot facility in Hopkinsville. Founded in 2018, the company manufactures contemporary, energy-efficient doors and windows for residential applications.
Gresham says economic conditions resulted in the prudent decision to initially “wade into the shallow end” by leasing, rather than purchase when it comes to the Kentucky-Tennessee market. According to November 2022 figures from the National Association of Home Builders (NAHB), the pace of construction for single-family housing starts dropped 32% from February when mortgage rates began rising. Association chairperson Jerry Konter says single-family starts are running at their lowest levels since May 2020 and that builder sentiment dropped for 12 consecutive months.
“We felt the interest rates would go up and then stabilize, but they’ve gone up quite a bit more than what we anticipated,” Gresham says. “So, we have, in fact, pulled out of purchasing that building. That does not mean we’re not coming to that market.”
At the same time, Elevate remains “100% committed” to entering the Kentucky-Tennessee corridor, he says, and is currently looking at “more economic ways” of obtaining a foothold in the region. According to Gresham, the company will enter the market at a slower pace than initially envisioned while maintaining the same strategic direction.
“We want in that market,” Gresham says. “We may lease space and then start shipping frames up there, setting up a glass line and glazing the windows and units there. That establishes our foothold as we grow into that market.”
Elevate is “actively pursuing” options that would allow it to do so, including leasing a building with between 30,000 and 50,000 square feet of space. Of course, should the company establish a foothold, Gresham says the option of purchasing a larger facility remains on the table.
“It’s just unfortunate, the timing, the way things happened like they did,” Gresham says. “We love Hopkinsville; we love how supportive Kentucky was of us. It’s just unfortunate circumstances that led us to have to pull back until things stabilize in new construction.”