What’s Next for Major Homebuilder Berkshire Hathaway as Warren Buffett Retires From Board

After more than 60 years at the helm, Berkshire Hathaway chair Warren Buffett has stepped down from the company's board, marking the end of an era for a company that has billions in real estate holdings and owns major homebuilder Taylor Morrison.

Buffett, 96, is handing the board's reins over to his 71-year-old son Howard, who has been at the company for the past 30 years.

In his final letter to shareholders as board chair Friday morning, Buffett said he would remain a shareholder even as he stepped away from the daily operations of the organization.

"Serving as your Chairman has been the privilege of a lifetime, and I have never taken
your trust for granted," he wrote. "Father Time always wins. He has, however, been generous with me. He
has given me the opportunity to see Berkshire reach a point where I am more confident than ever
about what lies ahead. The company is in excellent hands, and I look forward to remaining a
shareholder alongside you."

Buffett had begun stepping away from his Berkshire duties late last year. In January, Greg Abel took over as CEO. A longtime disciple of Buffett's long-term hold strategy, Abel has pushed further investment in the residential real estate market this past year.

In August, Abel doubled down on the industry by increasing Berkshire's stake in homebuilder Lennar to around $1.157 billion and buying additional shares of builder D.R. Horton.

In June, he oversaw Berkshire's purchase of homebuilder Taylor Morrison for $8.5 billion. At the time, Abel said he hoped to "unify our site-built homebuilding operations into a combined platform."

All told, the company has around $34 billion invested in residential real estate and owns more than 480,000 housing units. Berkshire Hathaway is the fourth-largest homebuilder in the country according to housing analytics research firm ResiClub, though Berkshire's real estate portfolio remains an overall small slice of its more than $364 billion in investments.

Of Abel, Buffett wrote: "My expectations for him were sky high from the start, and he has exceeded them. He has taken hold of the Chief Executive Officer job in every respect. He has been making the decisions that matter for some time now, and I have not had to think twice about any of them."

Despite Buffett's high praise, company performance lags behind the S&P 500. So far this year, Berkshire's B class shares have underperformed against the market, seeing just a 1% gain while the S&P rose 12%.

With interest rates hovering around 7%, analysts have posited that Berkshire's real estate investments may hinder the company's growth.

But Berkshire Hathaway's success was built on Buffett's strategy of making long-term, value-based investments. Though the housing market is currently slow, the overall historical trajectory of real estate investment has been steadily upward.

“Warren’s impact on Berkshire and its owners is without parallel in the history of American business,” Abel said in a statement. “The culture Warren built and the values he championed will remain at the heart of Berkshire, and Howard will be their guardian.”