LEWES – If someone told Preston Schell a global pandemic would be good for the homebuilding and development business, he would have laughed.
But now as Ocean Atlantic and its subsidiaries, including homebuilder Schell Brothers, close the year after selling a record number of homes and pivoting more in the rental market, Schell is not laughing now.
“It will be interesting to see what factor inflation will have to play in the next two or three years into this,” said Schell, the president and co-founder of Ocean Atlantic Companies. “When you understand the real estate market, you start to see the cycles. When the little guys want to get involved, you’ve hit the peak. We’re there right now — we have no land right now for pure cash at this point.”
When the COVID-19 pandemic came, Schell braced for a repeat of the 2008 downturn. He and his team talked about the possibilities of layoffs in the event that homes would not sell.
But to his surprise, homes did sell – starting as early in April 2020. Schell Brothers home sales range from 50 to 60 in a month. Between May and November 2020, the company sold 100 per month. By summer 2021, the backlog was 18 months out and sales caps were instituted.
“It was getting to the point where we couldn’t build fast enough. Then we realized if we finish lots, if we run out of inventory, what will sales do then?” he recalled.
Schell and his brother saw the wisdom in maintaining a slower and steady pace to avoid dramatically raising prices and getting “whiplash” in the marketplace.
Schell, for his part, is already looking ahead to pivot Ocean Atlantic to the next chapter: building rental units.
“Apartments are our long-term cash asset, and we do plan on beefing up our management side of that operation,” he said. “We’ve got five rental apartments in the works, two completed and three in the works, and five more in the pipeline.”
When it comes to Schell Brothers, expect to see the home builder division to expand nationally in the coming year. The branch has already expanded into Virginia.
