Regency expects boom in 5 years Homebuilder hopes to double developments in region to 9 or 10; Rapidly expanding company; Firm last year sold 495 homes in Md., Va., up from 120 in '90

THE BALTIMORE SUN

Regency Homes, one of the fastest-growing mid-Atlantic homebuilders, is trying to boost its sales in the Baltimore market and elsewhere now that it has ended its partnership with British construction giant Y. J. Lovell.

"We never really made it to Baltimore. We were always on the cusp around it," said Frank V. Mazza, chief executive of the Annapolis-based company.

Regency expects to sell about 260 homes this year in Anne Arundel, Baltimore, Carroll and Howard counties -- which is about 80 more units than it sold in those counties last year.

John M. Flaherty, president of Regency's Washington East region, projected that in five years, the company would be building in as many as nine or 10 communities in Baltimore, Carroll, Harford and Howard counties -- in addition to its Anne Arundel operations -- more than doubling its presence around the Baltimore Beltway.

"We'll have two locations in Baltimore County. We'll have two to three locations in Carroll," he said. "We'll have a couple of locations in Harford, because I think there's opportunity there. In Howard County, I want to maintain at least two."

That would be in line with Regency's recent track record. In 1990, Regency sold a total of 120 homes in all its markets. Last year, sales reached 495 in markets that straddle Interstates 95 and 70 in Maryland, and I-95 in Virginia.

This year, Regency hopes to sell 700 homes overall, a 41 percent increase at a time when Columbia-based Ryland Homes, one of the leading builders in the Baltimore-Washington area, has been scaling back in favor of other regions.

Mazza says Regency plans to sell 1,000 to 1,400 homes per year in several years.

Regency concentrates on the "move-up" market, buyers who are making their second and third home purchases.

In the first quarter of this year, Regency's detached-home sales were priced about $247,000 on average, according to the Legg Mason Realty Group.

The company's townhouses sell for about $154,000, and condos for about $101,000. The "move-up" market is a competitive segment, where builders in the 1990s have had to contend with consumer jitters caused by corporate downsizing and federal government cutbacks.

Robert T. Kleinpaste, Regency's president, acknowledged that Baltimore is not "a dynamic employment-growth market."

Total metropolitan Baltimore employment dropped 1 percent from 1990 to 1995, after increasing 19 percent from 1980 to 1990, according to a recent analysis of U.S. housing markets by the U.S. Department of Housing and Urban Development.

But Mazza said Regency is "focused to be where sometimes other people don't see opportunity." An example similar to Baltimore is Regency's expansion to Richmond, Va., Mazza said. "The places we go, at times, are contrarian to where the majors think."

In Baltimore County, the new-homes market is dominated by those "majors" -- NVR-owned Ryan Homes, as well as Ryland and Pulte Home Corp. Together, these three publicly owned builders sold more than one in three new Baltimore County homes last year.

In the first quarter of 1996, privately owned Regency became the 12th-most-active builder in the county, but its 17 sales were still dwarfed by Ryan's 102, according to figures compiled by Legg Mason.

In Anne Arundel County, Regency has become the second-largest builder, selling 52 homes in the first quarter, pulling ahead of Pulte but still trailing NVR, whose Ryan and NVHomes units together sold 118 Anne Arundel homes, according to Legg Mason.

Regency competes with Ryan in the Prince George's and Frederick markets for leadership in the single-family home categories, according to Anna Pitheon, president of the Washington-based Housing Data Reports.

"They're pretty darn sharp," Pitheon said of Regency. One of Regency's strengths, she said, is its range of programs designed to help move-up prospects sell their old homes.

"They realize that they are dealing with the whole turnkey operation," Pitheon said. "They've got to make it happen all the way around."

Regency, founded a decade ago by Mazza, had $5.7 million in sales in its first full year of operations, 1987. This year, sales are projected at $130 million, according to the company. Kleinpaste said the company wants to go public with a stock sale in two years.

Regency recently bought out Lovell's share in the partnership with the help of a $7 million infusion from Baltimore venture capital firm Grotech Capital Group. Kleinpaste said Lovell was leaving the homebuilding business.

The dissolution of the partnership will help end some confusion in the company's marketing.

Some of its communities were marketed under the Lovell Regency name, and some under just Regency, said Karen S. Krupsaw, vice president of marketing.

"Both names were going simultaneously," she said. "So we're very pleased to have the one name."

In one Prince George's County subdivision, it was selling single-family detached homes as Regency and the townhouses were Lovell Regency, Krupsaw said.

In Anne Arundel County, Regency's Admiral's Reach, a 180-unit Annapolis condo subdivision, was the top-selling condominium community in the entire Baltimore region in the first quarter, according to Legg Mason.

Pub Date: 5/19/96

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