Saunders, Real Estate, Hamptons

Real Estate Center

Dec 20, 2008 8:10 AMPublication: The East Hampton Press & The Southampton Press

Lunch With ... Frank Dalene of Telemark

Dec 20, 2008 8:10 AM

Frank Dalene’s company, Telemark, has been one of the East End’s leaders in the high-end construction market for the better part of three decades. Their reputation for superior craftsmanship has earned them acclaim within the industry and from the region’s most discerning clientele.

Among the company’s notable jobs in recent years was the Southampton Village estate that sold for $65 million in 2007, at the time the most expensive residential sale ever (rumored, incorrectly, to have been purchased by golfing great Tiger Woods).

Earlier this year, Mr. Dalene and a handful of other local businessmen founded the Hamptons Green Alliance, a consortium of building and home-care industry companies dedicated to helping clients and the general public properly identify the most energy efficient and environmentally responsible building materials, designs and products for their homes.

Mr. Dalene has written articles on building, industry trends and environmentally responsible construction practices. He has been quoted in the Wall Street Journal and numerous real estate industry publications discussing the health of the local real estate market. He is the chairman of the Membership Committee of the Long Island Builders Institute.

And he sat down for lunch at Bobby Vans in Bridgehampton recently with Press reporter Michael Wright to talk about his business and the building trades on the East End.

Q: Tell us about Telemark. You own it with your brother?

A: It’s my brother, Roy, now. I started with my father. It’s 30 years now. He had a building business, I had a carpentry business. His partner retired and the two of us put our businesses together and formed Telemark. That was 1978.

Q: Where does the Telemark name come from?

A: The name is a county in Norway where we’re from. I’m born in Norway. My father came over here in 1954, when I was six months old. ... We have a lot of pride in our work and we wanted to relate that back to our Scandinavian roots. Our woodworking skills, things we did with different types of woods, complicated millwork, our knowledge of different types of materials, being able to steam bend wood, which when we started not many people around here knew how to do. We started in St. James. There was a real Norwegian community in St. James, many skilled craftsmen and we learned from each other.

Q: Where does Hamptons Luxury Homes come in?

A: Hamptons Luxury Homes is a publicly traded company. We were approached by some people to merge Telemark into Hampton Luxury Homes. It was an opportunity to grow our company to another level. We have a service and maintenance business here that is working very well and we have a business plan that if we can grow our company through an acquisition strategy we can make our company more recession proof. This is a second-home market and absentee ownership and there is a great need for quality service and reliable service.

Q: You mention recession. What a coincidence. Compared to the 1970s, compared to early 1990s, how do you see what’s going on now?

A: We have to define that and it will be important to define that actually. There’s been a middle market out here that’s been in recession for about two years or more. When you’re thinking about all the spec houses that were built, most of that fell within the middle part of the market and there was more supply than demand in that market. It wasn’t a result of any kind of economic situation in the Hamptons, it was overbuilt and that part of the market got soft. The upper end has always been strong. Even today you talk to some of the real estate people and they think that’s strong, I think it’s fallen off. The lower end goes through its own cycles too and we’re seeing sales happening at that lower end of the market right now.

Q: Why sales now? Because prices are right?

A: Exactly, that’s the thing. People were thinking—and someone was telling them—that they could get a certain amount for their house and prices were escalating at such a high rate that they were overreaching and I think they priced themselves out of the market. They were all overpriced. That’s really the problem. Once the people that had to sell began dropping their prices to realistic levels then they would trade. And that has happened, I would say, really in only the last three months.

Q: Three months — what changed?

A: We can trace it to ... the Lehman Brothers collapse at the end of September. That’s when everything out here started to go on hold. We had a project in the village of Southampton that was a Lehman executive that went away. The rest of what we’ve seen is kind of similar to what we saw after 9/11. People contracted, there were projects lined up and people said “wait, let’s hold off. We’re not going away but we want to see what’s happening.” After 9/11 that went on for about 6 months. We’re seeing a very similar trend, and then also we’re seeing people who are not affected.

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By rabbit (65), watermill on Jan 6, 09 2:30 PM