New housing and remodeling
California is facing a severe housing shortage which is not forecast to ease even with the record number of housing starts.
New multi-family housing projects are designed almost exclusively in a modern style, therefore modern kitchens are specified by architects as part of the project
The Bay Area, and San Francisco specifically is a wealthy market. The median income in San Francisco is over $119,000 per year. The Bay Area is in the 97th percentile of income levels in California.
Real estate values continue to rise as they have over decades, making remodeling a financially reasonable choice. Kitchen and bath remodels in particular enhance the value of real estate and generally more than pay for themselves.
These conditions make the SF Bay Area a prime growth market for modern kitchen and bath cabinetry.
Apartment housing
This business has focused its multi-family bid participation to condos because developer budgets are higher. The market has shifted somewhat to apartments. To meet this demand, which has lower budgets, The business has teamed up with a factory whose modular cabinets cost allows it to compete for these projects without sacrificing quality. The only limitations are cabinet sizes and finishes, but developers are willing to accept them for the lower cost. This business expects to be awarded its first major apartment project—over 450 units—shortly, and is bidding on others.
New geographies
This business could expand its market to other urban centers, such has Seattle, Portland, Los Angeles, San Diego, Chicago, and New York. Other US kitchen companies still have not met the challenge from European competitors who have entered the market with innovative design, new materials, and improved functionality: US kitchen designs are largely versions of “modern” kitchens developed in the 1950s. Most architects continue to “design” kitchens from this era.
This business could fill the niche for modern kitchens that meet the design challenge, with cabinets made in North America in a larger geographic market.
New products
Following most branded European kitchen companies, there is an opportunity to develop lines of furniture that can be fabricated using existing cabinetry machinery. Such lines could include dining tables, closets, night stands, buffet tables, work tables and more.
Leveraging relationships
The business has formed a relationship with a general contractor that would like to have a single-source cabinet supplier/installer.
