First Management builds new headquarters in North Lawrence; Compton talks growth of local economy
photo by: Chad Lawhorn/Journal-World photo
A company best known for providing Lawrence homes has a new home of its own, and it also is spending more time than ever doing business outside of Lawrence.
First Management — which owns and operates hundreds of apartments in Lawrence — has finished work on a new corporate headquarters in North Lawrence. The company — which includes the related firm First Construction — has moved from its downtown offices at Ninth and New Hampshire to a location along U.S. Highway 24/59 just north of the city limits. More specifically, the new headquarters is at 1451 N. 1823 Road, which is in the small industrial park just north of the Teepee Junction.
The 40,000-square-foot complex allows its business offices, shop space and all other functions of the company to be on the same site for the first time in years. The move also comes at a time when the company is experiencing a new phase of growth.
“2021 will be the biggest year we’ve ever had,” said Doug Compton, founder and owner of the management and construction companies. “We’ve already booked more than $200 million worth of projects for the year.”
Despite having a history of being one of the biggest developers in Lawrence, the company isn’t seeing its growth happen here. The company’s largest projects — mainly apartments, commercial and some health care — are in Kansas City, Denver, Castle Rock, Colo., and elsewhere, although Compton confirmed he is hoping to do a Lawrence residential project at the former Oldfather Studios site along Ninth Street, near the University of Kansas.
“This will be the first time that 95% of my business will be outside of Douglas County,” Compton said.
photo by: Chad Lawhorn/Journal-World photo
It is not that Compton prefers doing projects outside of Lawrence, but he said many potential local projects don’t currently pencil out given the growth environment of the city.
“Right now I don’t see a big need in Lawrence, Kansas, for housing or commercial development,” Compton said. “It is not that we don’t want to do more, but right now you have to go where the need is.”
Lawrence’s population growth hasn’t been enough to support that large of a need, Compton and First Management and First Construction President Robert Green said. Instead, Green said he sees the market in a way similar to how several lay people have described it.
“Right now, Lawrence is saturated with apartments,” Green said.
Neither man shared specific occupancy numbers for the company’s Lawrence apartments, but they did confirm the local apartment industry has taken a hit from the pandemic. Compton said that in May, apartments normally are two-thirds leased for the coming school year. This year, he said that occupancy level was about 40% in May. It wasn’t until an announcement came about how KU would handle the school year that occupancy levels got to two-thirds. Compton didn’t make it clear where those occupancy rates are now, but he said the impacts are still being felt.
“Kids have said they don’t need to live in a fancy apartment to take online classes,” Compton said. “Occupancy is not going to be back until school is really in session.”
Compton said it was difficult to predict how active his companies might be in future development in Lawrence over the next decade.
“I think that is all based on whether our university grows, and it really hasn’t for the last 10 years,” Compton said. “It has been basically flat or declining enrollment. We have to get some growth in Douglas County, and the university has to grow.”
Unsolicited, Compton did offer an endorsement for Chancellor Douglas Girod as being able to figure out how to improve the university’s growth. Compton said he had been impressed with Girod’s willingness to meet with developers and other members of the business community to try to spur growth.
Until more Lawrence growth comes, Compton expects to stay busy in other markets, even amid a pandemic.
“For us, it almost has gotten busier,” Green said of the company’s construction activities during the pandemic.
There have been plenty of subcontractors and crews wanting to keep their employees working during an economy when so many others are facing layoffs, Green said. Compton said there also has been another huge reason that projects haven’t dried up during the pandemic — interest rates.
“When you borrow money with a rate that begins with a 3, that gets you pretty excited to do business,” Compton said.
The new corporate headquarters puts the company in a good position to do more business, he said.
“A good year for us used to be $60 million,” Compton said. “Now doing $200 million, we had to get our efficiency improved, and we had to have the foundation in place to do $200 million worth of work. This gives us that foundation.”
While it was tough to leave downtown, Compton said it helped that a law firm came in to take the space his company previously occupied in his 901 New Hampshire building. (I hope to have more on that company in a future article.) Green also said the North Lawrence location made a lot of sense given that company executives are frequently traveling to job sites elsewhere. The location is near the Kansas Turnpike interchange.
It also is near the Lawrence Municipal Airport, which puts Compton close to one of his new Lawrence investments. Compton leads a group that has built new hangar space at the airport and also has bought a controlling stake in the company that has the contract to run the airport for the city. That group includes Compton and two of KU’s more successful business alums — Dana Anderson, the former leader of one of the country’s largest retail developers, and David Booth, the billionaire financial executive who has given millions to KU and bought James Naismith’s original rules of basketball. I hope to get an interview soon with that trio to talk about their plans for the airport.
Compton said he can envision a much more modern airport terminal and facilities for Lawrence at some point in the future. When that may happen is uncertain, though.
In the meantime, Compton said he’s looking forward to seeing what opportunities a growing company will bring. The combined companies have about 110 employees in Lawrence currently. By this time next year, Compton is projecting the total will be closer to 150 employees.
“We are very excited about the future,” Compton said. “We have a really solid group, and a really solid team. It has been that team that has given us the reputation to grow.”
Already, the company’s growth has seemed to take it into a different phase, Compton said. In the past, Compton most frequently was approaching potential partners to join projects he was putting together. Now, he said, the tables have turned some.
“I can tell you that it is really fun to now have people come to us and say ‘We want to do this project with you,'” Compton said.