Boomer housing, booming market

Management: First Real Estate grows up as the county ages, finding a profitable niche in active seniors communities.

February 25, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

With new regulations passed in Howard County allowing planned developments for empty-nesters, several developers are scrambling to build them. And one Ellicott City business is trying to corner the local market on managing those developments.

First Real Estate Management Co. has contracts to manage the first two senior developments that have been approved in Howard County. The company has been negotiating with developers who are proposing other large senior communities throughout the county.

Founded in 1998, First Real Estate Management has grown exponentially in the past few years, from managing 250 units in Waverly Woods in 2000 to an anticipated 3,100 units in 13 communities by the end of this year. Revenues have increased accordingly, said owner Jared Spahn, who would not disclose exact numbers.

Now Spahn, who also owns Old Town Construction and heads the Ellicott City Business Association, said he wants the company to grow even more by focusing on senior developments.

"It's a market niche that nobody else is working in," Spahn said. "It created for us, professionally, the best opportunity to be creative. If all I was doing was creating an accounting service for small communities, there's nothing creative about that."

Active adult communities are housing developments built specifically for people over age 55 who live without children - empty-nesters who need no assistance.

The communities are called "active" because association dues pay for a number of amenities and activities for the residents, such as a community center with tennis courts and a pool, and educational or recreational classes and landscaping.

Howard County recently approved two senior communities for development, the Courtyards at Ellicott Mills and the Courtyards at Waverly Woods. Both are being developed by Spahn's former employer and current business partner, Donald R. Reuwer Jr.

About a half-dozen additional projects in the county have been proposed and are working their way through the zoning process. First Real Estate has contracts or is negotiating to manage those projects, Spahn said.

Specializing in senior developments will allow First Real Estate to grow as the aging population does, said Ellen de Haan, past chairwoman of the Community Associations Institute, a nonprofit organization for community association managers and homeowners.

Development of senior communities has not slowed in more than 15 years, she said, because the trend of baby boomers entering the over-55 category is to stay near home.

"The mid-Atlantic is an area where normally people would leave, but they're not leaving now, so there's a demand for new housing," she said.

Spahn said he started First Management in 1998 while working as a project manager for Land Design & Development Inc., Reuwer's company, because he did not like the management company Land Design was using for a project. Reuwer became a silent partner in the venture.

Over the past few years, county legislators created several incentives for developers to build senior housing developments, in an effort to persuade the baby boomers who put Columbia on the map to stay in the county.

Senior communities are intended to help the county keep a thriving tax base of homeowners and a wealth of knowledge and experience in the community.

But because the community association management provides most of the amenities to the community - everything from day trips and exercise classes to lawn care and snow removal - the county spends little in care for these residents. Most important, senior housing is not a factor in school crowding.

Howard County is not the only place with new developments for seniors. It's a hot market throughout the region.

As First Real Estate Management carves its niche in the county, Spahn said, the next step is to take on projects in the surrounding area. But he wants to move slowly.

"I want staged growth because the key to my company is providing quality service," he said.

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