SUBMIT YOUR BUZZ TODAY! You are not signed in (Sign In or Register)

Epcon Communities: Condos Without Compromises

Friday, July 24, 2009 / Epcon Communities

Seven condominiums nestled off New Albany Road seem to be little more than a pleasant corner of a new housing development.  But to Philip Fankhauser and Edward Bacome, the homes are a radical experiment.

Fankhauser and Bacome run Epcon Communities, the Dublin-based builder of condominiums targeted at retirees. For years, the company built its success out of a small toolbox: by offering buyers, mostly in the Midwest and South, simple and affordable retirement condominiums with very limited options.

The straightforward designs and the unusual way Epcon builds them -- through franchisees -- helped the company become the nation's largest builder of attached condominiums last year, and the 31st biggest home builder overall.

That's not enough.

After 23 years in the business, Fankhauser and Bacome, both in their 60s, have taken the formula that made Epcon No. 1 and thrown it out the window. They're overhauling the company with the goal of taking it to 50 states and making it one of the 20 largest home builders in the nation.

"Our business model certainly wasn't broken," Fankhauser said. "We just believed we could be better and that this reinvention would position us to be leaders in our niche, nationally, for the next 10 to 15 years."

They're convinced that the way to do it lies in the seven condos at the Woods at Sugar Run in New Albany.

The condos are show models for Epcon's 130 franchisees -- a sort of condo store the builders can tour. They're now available for customers at Sugar Run and at the Woods at Hayden Run in Hilliard, and are beginning to be sold at other Epcon communities nationwide.

For many builders, offering seven models wouldn't be unusual. For Epcon, it's revolutionary.

Fankhauser and Bacome founded the company with one thing in mind: Keep the price low by offering rigidly engineered homes that could be easily duplicated anywhere in the nation.

In 1986, the company opened its first community, Deer Run, off Hamilton Road, with one model: the Villa. A few years later came the Chateau ("the Villa with an upstairs," Bacome said).

"Options were not a part of our vocabulary," Bacome said. "Basically, you could choose between one big window or two small ones in the living room."

During the early 1990s, the company added the Abbey and the Canterbury models, which have become Epcon's workhorses.

Despite enormous success -- 26,000 homes in 295 communities -- Fankhauser and Bacome grew worried a few years ago that they were missing part of the market and weren't well-positioned for the future.

They hired Margaret Wylde, president and chief executive officer of ProMatura Group, a Mississippi firm that researches housing and other issues for people age 50 and older.

Wylde spent weeks sharing her research in Epcon's offices with Fankhauser, Bacome and the firm's design, engineering, construction and accounting staffs.

"It was a balancing act, with all their team there," Wylde recalled. "They were very focused on delivering value to their customers, as opposed to just trying to get the upscale market and push prices."

Working with Wylde, the Epcon founders reached some key conclusions.

For starters, they realized they could raise the top of their price range from $250,000 to $300,000 but not beyond.

"The air gets pretty thin after $300,000," Bacome said.

Wylde and Epcon also concluded that the company needed to offer more choices, more contemporary designs and, most important, private outdoor space and units that weren't attached to one another.

"I told them if they stayed with the attached condominiums, they were missing 84 percent of prospective sales," Wylde said. "So Phil and Ed looked at each other and said, 'Why would we want to do that?' "

With the help of several architects, including the Columbus firm Dean A. Wenz, Epcon came up with condominiums that offer:

• Private outdoor living space visible from all main rooms in the house.

• Open floor plans that combine the kitchen, dining and living spaces.

• Nine-foot ceilings that can be vaulted or trayed.

• More storage.

• Larger garages.

Customers also get a far wider range of options such as hardwood floors, granite countertops, stainless-steel appliances, a screened-in porch, a desk in the kitchen, a serving counter in the dining area and a gas fire pit on the patio.

The changes are top to bottom. But the most important, say company officials and others, is the outdoor space.

"The biggest objection I've had from clients to the Epcon communities is that they don't have a backyard living space," said Jenny Linich, a real-estate agent and the Charlotte, N.C., representative of 55Places. com, a guide to retirement centers nationwide.

"The screened-in patio is a huge, huge item here. It's how you can extend your living space and your enjoyment of the outside. Having the opportunity to do that, I think, will be a big benefit for Epcon."

Reaction from franchisees, many of whom have made a nice living with Epcon's current models, has been mixed, Bacome said.

"Some have been quick to adapt," he said. "Others are taking a wait-and-see attitude. They tell us, 'We understand why you want to do something different because you've done 40 communities. But we're only on our second community.' "

Paul Scarmazzi, a Pittsburgh franchisee who is building his third Epcon community, said the franchisees with whom he has spoken are excited by the new designs.

"I think it was a necessary thing to do in response to the market today," Scarmazzi said. "Ed and Phil did something and they did it well -- they didn't change much; they didn't offer many options -- but now the market told them, 'You have to change and change dramatically.' And they did that, and they did it well."

Scarmazzi is so bullish on the designs that he has chartered buses to drive customers from Pittsburgh to see the New Albany prototypes.

Epcon officials think the new designs will help broaden the company's audience. Epcon communities aren't age-restricted but have largely drawn empty nesters.

The new homes -- with their open layout, high ceilings and stylish touches -- are beginning to attract more middle-aged singles and some young professionals, said Nanette Overly, the company's vice president of sales and marketing.

Epcon is excited about the designs but has the misfortune of unveiling them during the worst housing slump in 40 years.

The company's sales were down 55 percent last year from their 2006 peak (competitors fell more, allowing Epcon to claim the top spot). The slump led the company to reduce its Dublin staff from 122 to fewer than 50.

Fankhauser and Bacome said the new designs have sold well, but they don't expect this year's sales to be better than last year's. Still, they're convinced that their corner of the housing market will recover.

"Our buyers haven't crashed," Fankhauser said. "They're just circling the airport, waiting to land."

In addition to facing a lousy housing market, Epcon is looking to enter the potentially more challenging markets of Arizona, Florida and Nevada, where they would go head-to-head with retirement developers such as Del Webb.

Wylde and Bill Ness, the founder and president of 55Places.com, wonder whether Epcon's one-size-fits-all formula can succeed nationally without making allowances for regional tastes. Ness also wonders whether the company is taking a risk by moving beyond its faithful formula.

Still, Ness, who has visited Epcon communities, thinks the company's future is strong.

"They're poised to see some great success," he said. "They know who they are and they don't try to be anyone else."

jweiker@dispatch.com

"Our buyers haven't crashed. They're just circling the airport, waiting to land."
Philip Fankhauser
Epcon co-owner



Published by : Active Adult Communities by Epcon Communities
This article has been viewed 3669 time(s).

Related Articles :
No Related Content Found




Share this article on LinkedIn

Report this article as abuse

Reviews : 0
User Rating :

Submit your Review