Analysis: Strong Demand Drives Top 25 GCs to New Heights
As published in MULTIFAMILY EXECUTIVE, April 14, 2014. Written by Lindsay Machak.
Strong demand enabled many well-established general contractors (GCs) to have their pick of the litter last year, affording several among the MFE Top 25 GCs the luxury of expanding their reach.
NorSouth Constructs, for example, found its footing by walking down a different path. Colin Edelstein, NorSouth’s director, says the company is branching out from its historical focus as an owner–developer, and just recently began taking on third-party projects. Edelstein joined the Savannah, Ga.–based company in 2011 to do just that: Help grow the firm’s presence in the development marketplace.
“The goal then was to take this company with a tremendous track record and history and legacy and introduce them to the world as a legit option for third-party construction,” he says.
And the tack paid off big, as the company earned the 18th spot on this year’s list after missing our rankings last year. NorSouth shifted from doing occasional third-party work for friends to conducting about 85 percent of its business as a third-party builder, Edelstein says. In 2013, the firm built 1,110 third-party units, half of which could be classified as affordable housing.
The change in focus allowed the company to get reacquainted with Tennessee and Charlotte, N.C., two regions where NorSouth had been absent for nearly a decade.
“We’ve been in lots of markets over time,” Edelstein says. “But considering that we’re kind of under this business model and new regime, we’re able to have opportunities that wouldn’t have necessarily been there before.”
And as NorSouth Constructs works to build a name for itself as a general contractor, the team is choosing its projects carefully.
“We’re not scared to turn down business,” Edelstein says. “We don’t want to be the biggest construction company in the world, and we’re not chasing deals for transactions and revenue—we’re building business around developing relationships and around those folks who will be the best.”
Mixed-use, Solid Results
Clark Builders Group also ventured into unknown territory last year, which helped the Arlington, Va.–based company secure the No. 2 spot on the Top GCs list.
The company reported 3,771 starts in 2013, which included the world’s first-ever mixed-use urban Walmart location, says Keith Anderson, Clark’s president. The project, 77 H Street NW, is located in Washington, D.C., and features four floors of apartments in addition to the Walmart. The property opened in December of last year.
Anderson says that being able to complete the project early and in a tight, tough, urban space is continuing to help Clark prove its worth in the industry.
“When I think about this job … anytime we’re talking about our [experience and what] we’re able to do as a company … it answers a lot of questions,” Anderson says. “From a schedule standpoint, a complexity standpoint, dealing with a mega-size retailer—it’s definitely a project that speaks to our capabilities.”
The company expects to complete another mixed-use Walmart location in the D.C. area this year.
Meanwhile, Grapevine, Texas–based Rampart Con?struction opened a new office in the Atlanta area last year, marking its desire to expand in the Southeast region.
Rampart broke ground on 2,200 units in 2013, and, although that was about 2,200 less than the previous year, the company stayed more than busy, focusing on existing relationships to land at No. 6 on the list.
Taking on projects primarily for repeat clients is the company’s focus, according to Johnny Yates, Rampart’s vice president.
“We’re not the type of contractor beating the bushes to find a deal and bid on everything that’s coming along,” he says. “We focus on repeat clients and relationships—not only with developers and owners, but also with architects, engineers, and subcontractors. Our culture is our philosophy.”
The firm’s new Atlanta-area office will serve as a hub as the firm breaks ground in new markets, such as Chattanooga, Tenn. Yates also hopes to expand Rampart’s presence in Georgia, the Carolinas, Virginia, Alabama, and Tennessee. “There are a lot of areas easily commuted to from [Atlanta] that are strong secondary markets,” Yates says.
Still, Jacksonville, Fla.–based Summit Contracting Group reclaimed the top spot this year, after being bumped by Rampart last year. Summit had a big 2013, growing its pipeline 36 percent to 4,681 units, a more than 1,200-unit improvement over 2012.