Commercial Construction Work Steady, but Highly Competitive
The building industry has travelled a tough road in its efforts to recover from the Great Recession, with mostly modest improvements in business volume amid ever-mounting competition for available work. But in recent months, the skies have become brighter, and most builders are expressing real optimism that the better times are real and have some staying power.
It’s easy to notice major commercial construction projects underway during the summer, and this year is no exception. Business is booming, and local companies say they are doing well — one is actually having a record year — but competition is stiff, and it takes a good track record to get hired in today’s market.
“Business has been very good,” said David Fontaine Jr., vice president of Fontaine Bros. Inc. in Springfield. “The market is very competitive, but we have gotten our fair share of business over the last few years. We’ve been consistently busy and have work lined up on the books that is a good mix of new construction and historic renovation.”
Eric Forish, president of Forish Construction Co. Inc. in Westfield, said his company has also been fortunate. “The past two years have been our best out of 70 years in business, and the forward momentum is continuing,” he told BusinessWest.
But he says it takes a lot to win a bid. “A company has to have a multitude of strengths and share the customer’s expectations; they want a safe job site, quality, and performance, and these things, coupled with excellent customer service, have been our priorities.”
Although Keiter Builders Inc. in Florence has been very busy and has a number of projects underway, it is also aware of the high level of competition and what it takes to prevail in a contest for a job.
“The bids have been very close on the last half-dozen jobs we won; we were within a few percentage points of our competitors,” said company President Scott Keiter. “The owners are creating their short lists of candidates based on reputation; then it’s all about the numbers.”
However, the firm deliberately searches for challenging and complex projects.
“We truly enjoy them, whether they involve creating an observatory or a new restaurant. We’re good at complex undertakings; they keep us on our toes,” Keiter said, adding that he started his business eight years ago in the depths of the recession, but has done well. “Everything keeps going in the right direction, we are proud of our work, and we’re growing.”
Stephen Greenwald, president of Renaissance Builders in Gill, says there is considerable work available across the board in residential, industrial, and commercial sectors.
“We’re busier than we were last year and have work through the beginning of next year,” he said, noting that it used to be like that 10 years ago, but hasn’t been that way for a long time.
The type of work the company handles varies; about 50% to 60% is commercial, 30% is residential, and 10% to 15% is industrial, although the numbers change from one year to the next, and Greenwald agreed that landing jobs is highly competitive and a number of factors enter into the equation.
“Margins are still slim, but one of the reasons is that materials continue to go up in price,” he told BusinessWest. “But since the recession ended, business has steadily gotten better.”
However, Forish networks with many local, regional, and national firms and noted this year is unusual: some contractors are busy, while others are not. He doesn’t know why, but noted that, “historically, election years create a degree of angst.”
Fontaine said his company is frequently hired to do construction management.
“We help throughout the design process and are involved long before the actual construction work begins,” he said, explaining that the firm works in conjunction with the architect and owners, helps with the budget, and makes sure the job starts on time and stays on budget.
Most projects are several years in duration, and landing them is no easy feat.
“There are a lot of really qualified large and small companies bidding on projects, and we’re definitely seeing more companies with a national reach coming into the area,” Fontaine said. “We focus on our relationships with our clients, and the success of our projects keeps us busy. But we live and die based on our reputation and our continuing results. In our business, you can’t take a day off. You have to consistently do your best to get and keep clients.”
Forish agrees. “We’re always looking to take on new work. You can’t sit on your laurels; we’re constantly challenged to find new opportunities and markets,” he said. “If you’re good at what you do, every day you’re completing work, so you need to find new jobs. You have to keep going; you can’t assume that things will stay steady in any industry.”
Fontaine Bros. has a number of projects that were recently completed as well as ones that are underway or in the planning stages. It recently finished a historic renovation of the 100,000-square-foot, $33 million Shrewsbury Public Library that involved keeping the front of the building and adding 40,000 square feet, and it’s finishing a new elementary school in Athol.
Local work includes the $55 million Pope Francis High School being built by the Diocese of Springfield on the grounds of the former Cathedral High School on Surrey Road in Springfield that suffered extensive damage during the 2011 tornado.
“The project is in the final design stages, and we expect to break ground in September,” Fontaine said, adding that many people have wondered when the work will begin and don’t understand how much has to be done behind the scenes before construction can start.
“It’s a great project for us, and will put a lot of local people to work. I’m happy to see the school being rebuilt,” he added. The undertaking will take two years from start to finish, and the school is expected to open in September 2018.
Fontaine Bros. is also working on the MGM casino parking garage in Springfield; construction is underway, and concrete was being poured at the time of the BusinessWest interview.
“We partnered with Tishman Construction, and it’s great to be included in the project,” Fontaine said. “We’re excited about being part of the revitalization of the city and appreciate the fact that Tishman and MGM sought participation from local contractors and tradespeople.”
The majority of work Fontaine Bros. handles involves ‘green’ building, and many of its projects are LEED- or Massachusetts CHPS-certified. The company has been ranked as one of the Top 100 Green Contractors by the Engineering News-Record for the past few years.
Forish has also been busy. Over the past year, the company completed the new Sarat Ford and Sarat Lincoln auto dealerships in Agawam and the Marcotte Commercial Truck Center in Holyoke, put on a large addition at Astro Chemicals in Springfield, and most recently completed the Curry Nissan dealership in Chicopee and a new $6.5 million senior center in Westfield.
Projects underway include the $3.5 million PVTA Pavilion in Westfield, a 30,000-square-foot addition to Hillside Plastics in Turners Falls, a 12,000-square-foot addition at Super Brush in Springfield, and a multitude of jobs at UMass Amherst.
Keiter has a varied portfolio that includes a number of residential construction projects, and the firm is putting additions on a number of homes and building a few new ones in the Northampton area. However, about 80% of its work is commercial, and the roster includes a number of jobs at Smith College. The work includes a large window-and-door installation on the president’s house, a large dormer addition on a classroom building, and a renovation to another building to accommodate a gluten-free kitchen.
The firm is also handling a major renovation of the Alumni Gym at Amherst College, which houses its athletic operations.
“We’re very diverse, and also have a site division that does a lot of earthwork, which is a fast-growing part of our business,” Keiter said, adding that the firm began doing excavation and site work about three years ago.
Last year the company also completed a number of jobs at Smith College. It finished a telescope observatory in McConnell Hall, put a new roof on the building, and made mechanical upgrades; repurposed space to create a scientific drone research room in Bass Hall for the Science Department; and did a good deal of office-renovation work. Is also handled a buildout for an attorney’s office in Northampton and created a new restaurant (ConVino) in the basement of Thornes Marketplace in Northampton, which required completely changing the layout of the space.
Renaissance Builders also has a large, diverse portfolio. Last year, the company completed a major church renovation in Greenfield, a significant renovation of an apartment building in Northampton, another major renovation of a food-distribution company’s warehouse in Hatfield, and an addition for a commercial cabinet maker in Northfield. And on the residential side, it built two new homes in Chesterfield and Montague.
“Earlier this year, we did a large historical renovation in downtown Turner’s Falls, and right now we’re doing a renovation in Gardner for a service company,” said Greenwald. “We’re also building a day-care center and doing renovations at a private school in Northfield, and renovating a chain of tire stores in multiple locations.”
Forish attributes his company’s success to the dedication of his employees, but said the company’s longevity poses its own set of challenges.
“We have a supervisor and general manager who both have 30 years of experience who are retiring, a tradesman with 25 years who is retiring, and two others who were recently recognized for 40 years of service who could retire,” he said. “Being a strong, mature company has its advantages, but it also creates challenges when you need to replace people. We’re always looking for motivated individuals to join our Forish family.”
Although it’s impossible for commercial construction companies to predict what the future will hold, Forish and other company spokesmen say this year looks like it will be a good one.
“But it’s always difficult to tell how much is due to the economy versus the typical busy summer, so we’re always looking ahead,” Keiter said.
Still, Greenwald noted that the economy in Western Mass. seems to be holding its own. “Businesses are putting money into expansion and infrastructure improvements, which I interpret to mean they are doing well; we see it as a positive sign.”
One that should contribute to a stellar season as local commercial construction companies not only hold their own, but thrive in a competitive environment where attention to detail and reputation makes a world of difference.