It’s a feat the owners of the Fresno-based home-building company still can’t believe today, almost a decade after the Great Recession nearly crushed the business.
“I don’t think any of us had the confidence that we would make it through,” President Joshua Peterson said.
But a few things came into play. Company owners Richard Wathen Jr. and Kevin Castanos held on for as long as they could, wading through the recession until the economy reached higher ground. Then, they sold the company to Peterson and two other longtime employees with a wild and uncertain plan to drive business back by leaving their home base in Fresno and Clovis.
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It worked. Now, Wathen Castanos, one of Fresno’s oldest home builders, is constructing in a dozen cities across the central San Joaquin Valley, from Tulare to Clovis, as well as the Central Coast. The company just bought a commercial building in Clovis to serve as its new headquarters and has doubled its employees from the low point in the recession.
Nothing was given to us. We’ve been working our butts off.
Peter Castanos, owner, vice president
“We are feeling grateful to be in the position we are in right now, not only with the flourish in the market, but having the opportunity to be part of this legacy of building,” said Peter Castanos, owner and vice president. “Nothing was given to us. We’ve been working our butts off.”
Wathen Castanos’ Valley history started in the 1920s when James Wathen and his wife, Mary Pearl, (Castanos’ grandparents) followed her uncle to the area from Kentucky. The uncle was a carpenter. In the 1950s, the Wathen sons – Spalding, Richard, Jack and Ron – started building subdivisions. They created Wathen Brothers and Mansionette Homes.
The building tradition continued in the early 1980s, when Kevin Castanos left Wathen Brothers to start his own company and was later joined by cousin Rich Wathen. They named the company Wathen Castanos and became innovators in land planning, introduced the first zero net electric home to the area and built their largest project in Harlan Ranch.
The pair helped groom, and still mentor, Peterson, Peter Castanos and Freddie Logue to lead the company today. The trio officially took ownership in 2014, although they had been running the day-to-day operations of the business for several years.
“We’re proud of them and really grateful that they’ve taken it up and they’re thriving,” Kevin Castanos said. “They’ve created their own nuance of culture in their company. They’re young, they’re aggressive … they’re making us proud.”
The new partners have more than 75 years of experience combined working for the company. Peterson oversees finances. Peter Castanos is in charge of sales and marketing. Logue is the construction head. Together, they had to figure out how to bounce back from the recession.
135 Number of employees at the company’s peak
25 Number of employees at the lowest
The company was hit hard starting in 2007 with a decrease in housing affordability, a fall in home prices and supply, and banks that were less likely to cut builders slack on construction loans. The company downsized from 135 employees to 25 and moved from a 10,000-square-foot office to 3,400 square feet of space.
During the recession, builders statewide filed for bankruptcy or reorganized. National builders left the central San Joaquin Valley. Local firms weathered the challenges, and like Wathen Castanos also cut a number of employees and lost subcontractors because so few homes were being built, said Mike Prandini, president and chief executive officer for the Building Industry Association of Fresno and Madera Counties.
“They all struggled to stay afloat,” Prandini said.
Peterson proposed the company start building outside of Fresno and Clovis to get on its feet. They started small in 2009, picking up 10 lots in the foreclosed Viscaya development in Dinuba on a rolling option – if it didn’t work, the company could cut ties and move on.
It succeeded. They bought another 10 lots, then eventually built more than 200 homes there.
“We found a market where we could buy lots, put a house in the ground and have sales that made money, and that kind of propelled itself to look for other opportunities,” Peterson said.
The key was not to take big risks. “That’s one of the benefits of us taking over ownership after the recession,” he said. “We learned to be conservative and to look for every (way) out in the world so it doesn’t hurt us too bad.”
We really regionalized the company during that time, but it was actually based on a need to stay in business and now we’re more opportunistic.
Joshua Peterson, owner, president
The builder jumped from Dinuba to Lemoore, Paso Robles, Visalia and Hanford, buying mostly foreclosed property. It acquired rival Mangano Homes, a developer of commercial and residential projects in San Luis Obispo and Visalia. The company also made its way back to Fresno and Clovis and will soon be building in Buchanan Estates again. Next year, Wathen Castanos will unveil a new neighborhood in Arroyo Grande and two in Marina.
“We really regionalized the company during that time, but it was actually based on a need to stay in business, and now we’re more opportunistic,” Peterson said.
It hasn’t been easy, the partners admit. Building out of town has its challenges with different building requirements, rules to learn and trust to earn with trade and construction partners, Logue said.
In Arroyo Grande, the city asked Wathen Castanos for a midcentury modern design, not what the company was used to building. And in Marina, the builder realized it had to spend more money than it was used to for decorating and outfitting the more expensive homes.
The company continues to scrutinize every dollar spent. “We still look at each other and say, ‘Have we interrogated this project 15 ways?’ ” Peter Castanos said. “Are we OK, guys, can we go forward with this now?”
The owners expect to sell around 300 houses this year, close to the peak when they sold more than 400 homes. Sales prices, however, have not caught up yet.
The company hopes to be in its new office building at Sunnyside Avenue and Tollhouse Road by the end of October or early November. The move and the new office, a building that has been vacant for eight years, represents the new direction of the company, which now has 53 employees, the owners said.
“Taking something that didn’t look so great and making something out of that is the new legacy of the company,” Castanos said.
But the important part of the business, which is easy to lose sight of amid all the work of running a company, is the homeowners, Logue said.
“When you come to the end of the day, you see the joy on homeowners’ faces, you see how happy they are to have their first home,” Logue said. “It kind of makes you feel like, ‘Hey I do something great. I build a home for people to live in.’ ”
Wathen Castanos Homes