KB Home to Leave Washington, D.C., Market

Homebuilder KB Home said Thursday that it would pull out of the Washington, D.C., market to sharpen its focus on its bigger geographic segments.

The Los Angeles company said it would complete the exit over the next 12 months and it plans to continue building and delivering homes already on the books.

For KB Home, the nation's capital is a small market; Washington, D.C., represents about 2% of its overall community count. It has a bigger footprint across the central states, where nearly half of its homes under construction and land under development were last year, and in the west and southwest U.S.

"We entered the Metro D.C. region late in the previous housing cycle, and have not been able to establish the scale necessary to generate solid returns," Chief Executive Jeffrey Mezger said, adding that the company would reallocate resources to areas where it has a larger, more-established presence.

The company said the move would result in a pretax charge of about $6 million to $8 million in the current quarter.

Shares in the company, down 10% over the past 12 months, were inactive during after-hours trading.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

May 12, 2016 18:15 ET (22:15 GMT)

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