A Light in the Economic Storm

Scalzo Group Real Estate Services, Inc. has experienced directly the raw underbelly of the recession. As new-home building has dried up and foreclosures have come to dominate the market, the organization has had to run its companies lean and mean, and in the process it has learned it’s a survivor. Now, Scalzo Group is making a full-time business out of helping others survive as well.

The 25-year-old organization consists of seven divisions, each one complementing the others: Scalzo Group sells, builds, and manages homes, and in 1991 it became an official distributor for designer-builder Westchester Modular Homes of Fairfield County; the Empire Development division builds custom homes, residential communities, and commercial buildings throughout Western Connecticut; a 1997 merger with CENTURY 21 Home Services created the New Homes Division; and in 2001 Scalzo Group partnered with Coldwell Banker to create the Coldwell Banker Commercial Scalzo Group. Scalzo Group rounds out its services with Scalzo Property Management—which provides professional property-management services for commercial and industrial properties, residential apartments, and condominiums—and the SPM Maintenance & Construction division—which provides general building maintenance and construction-management services.

“Seven years ago, residential home building and property management were the core of our organization,” president Paul Scalzo says. And despite the soft home market, it is still the residential side that drives the firm to meet people, but now Scalzo Group focuses on finding niches where it can flourish.

For instance, Westchester Modular Homes is building two apartment complexes and doing some remodeling as a result of Hurricane Irene. “We’re going to where the business is and not trying to keep the old model,” Paul says.

Scalzo Group is also finding commercial opportunities in retail. “There is a new genre of retailers coming into the market today—the neighborhood shopping center and the power center, which includes large, national tenants—and we’re currently developing one of each kind,” Paul says.

Changing trends have affected Scalzo Group across the board. “Seven years ago, all the business was of opportunity,” vice president of asset services Douglas Rose explains. Today, he says, it is all business of necessity, such as with a bank that’s foreclosed on a property and needs to either sell it or, if wanting to retain possession, manage it. As a result, Scalzo Group’s preservation business, which maintains properties for banks and commercial owners, is booming. “We mow the grass, change the locks, board up the windows—whatever needs to be done to maintain a property,” president of Scalzo Property Management Andrea Scalzo says.

With homes not selling, Andrea says the property-management side is the business of the future. “If we’re managing a property and they need to have the steps replaced, we can just get it done,” she says. “We manage the entire process from beginning to end, and because of that, we can ensure that it’s done right.” Recently, in a span of just 60 days, Scalzo Group’s cleanup work orders increased from 70 to 900.

One good aspect to the recession is that construction, repair, and maintenance talent is available to the Scalzos that wouldn’t have been possible in a booming market, and industry vendors are also capitalizing on similar opportunities. For example, Long Island-based Winter Bros. Waste Systems, Inc. recently took over the sanitation and transfer station in its market. “They have a great reputation, so we’re looking forward to new management there,” Andrea says.

Despite prevailing trends of uncertainty, the resilience of Scalzo Group seems to be generating optimism among the firm’s employees and the community. “Crisis breeds opportunity,” Rose says. “It’s so easy to hear doom and gloom and think there is no way out. If there was one thing I would say about Paul and Andrea, it’s that they present a concept of hope. They’re doing the right thing for everyone.” ABQ