An Economic Outlook with Ken Entenmann, Chief Economist at NBT Bank
Ken Entenmann, Senior Vice President, Chief Investment Office and Chief Economist at NBT Bank, sits down with MEREDA President Craig Young and Senior Director of Affordable Housing at NBT Bank Kim Twitchell (formerly Maine Regional President of NBT Bank) for the tenth episode of MEREDA Matters – the podcast that puts you in the room with the people who are driving responsible development in Maine. The conversation begins with Entenmann sharing his career path and why he loves economics. The group then delves into a discussion on the resiliency of the U.S. economy and the important factors impacting the global economy right now such as inflation and the lingering effects of the pandemic. Entenmann also includes his perspective on the effect of renewable energy for energy prices. The discussion continues as the group looks at how the office market has been faring, both nationally and in Southern Maine. Entenmann shares his thoughts on whether there is a housing bubble, if current interest rates are the new normal, and whether he sees a recession on the horizon.
The MEREDA Matters podcast is sponsored by NBT Bank and Landry French Construction. Additional sponsors include Bangor Savings Bank, Clark Insurance, A Marsh & McLennan Agency LLC Company, and The Boulos Company. A new episode will be released each month and each will feature new voices from the real estate and development industry.
By Samantha Marinko | Associate, The Boulos Company
This time last year, I made reference to “the current stalemate in the market,” referring to the minuscule variance in the vacancy rate for downtown, Class A office buildings in the six months prior.
This year, I have a similar report.
In January of each year, The Boulos Company compiles data in order to develop a comprehensive analysis of the vacancy rates of office buildings. In particular, we focus on the 25 Class A office buildings in downtown Portland, which include over 2.4 million square feet of space.
At the time that report was published, the vacancy rate for space on the market for direct lease was 3.75% or 90,527+/- SF. That square footage was derived from five 10,000+ SF spaces and a handful of smaller vacancies.
Currently, the vacancy rate is 3.45% or 83,391+/- SF, and still, that is attributed largely to five 10,000+ SF vacancies.
Though at only 0.3% there hasn’t been a change of much significance with the direct vacancy, the sublease rate reflects a bigger shift, and likely a greater trend that we will continue to see in the coming months and years. The sublease vacancy rate in January was 4.59%; the current rate is 6.37%. Although that’s still relatively low and could be considered healthy, the 1.78% increase in just six months is suggestive of a trend we are likely to see more of.
The lack of a shift in the direct rate is a relatively clearcut story – no absorption of much significance, no new vacancies of much significance.
However, there is even more to the sublease story than the number alone can reflect, because there was in fact some absorption of the sublease vacancy reported in January. 100 Fore Street, for example, had 15,458+/- SF available for sublease as reported six months ago. That space has been leased by a new tenant, therefore removing that SF from the updated total, and yet, the number has still increased quite significantly. That means that the new sublease availabilities are even more substantial than the increased rate reflects.
This will be something to keep an eye on. As the dust from the pandemic continues to settle and leases begin to roll, tenants will be forced to make a decision as to how they consider their space needs and we will see those decisions reflected in the vacancy rates moving forward.
Original article posted July 28, 2023, https://boulos.com/downtown-portland-class-a-office-2023-mid-year-update/?mc_cid=e91f4d71a2&mc_eid=87a9b15008
Holiday Inn by the Bay 88 Spring Street, Portland, ME
Buffet Breakfast: 8:30 – 9:00am Program: 9:00 – 10:00 am
About the Event:
Join MEREDA on October 19th to hear from Matthew O’Malia, Co-Founder and Vice President of TimberHP, Executive Partner of OPAL Architecture, about the renovation of a former paper mill in Madison, Maine. This facility has since been turned into the first wood fiber insulation manufacturing plant in North America. With renovations nearly complete, TimberHP will be selling all three of its products—TimberFill, TimberBatt and TimberBoard—on the North American market by late 2023.
Don’t forget, this breakfast will now run from 8:30 – 10:00 AM in an effort to accommodate those working around childcare and bus drop offs and pick ups.
MEREDA’s Refund Policy: Your RSVP is requested by October 12. Payment is expected at the time of registration. No refunds will be granted to anyone who registers, but fails to attend or who cancels after October 12.
Cost: Members: $45.00 each | Non-Members: $55.00 each — Prices increase $10 after 10/12.
Each year, the Maine Real Estate & Development Association (MEREDA) recognizes some of the state’s most “noteworthy and significant” real estate projects, completed in the previous year. The exemplary projects from across the state, completed in 2022, not only embody MEREDA’s belief in responsible real estate development, but also exemplify best practices in the industry, contributing to Maine’s economic growth by significant investment of resources and job creation statewide.
This year, MEREDA honored projects from Lewiston to Portland to Biddeford, with each receiving special recognition at MEREDA’s 2023 Spring Conference on May 25th.
In a multi-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation. MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, difficulty of the development, uniqueness, social impact and job creation.
MEREDA’s 2022 Top 7 recipients include:
Lincoln Hotel & Lofts, LHL Holdings and Chinburg Properties (Biddeford)Gauvreau Place, Community Concepts Inc. and Avesta Housing (Lewiston) Shipyard Brewing Redevelopment, Bateman Partners, LLC (Portland) Reconstruction & Reuse of Historic Building 12, Portland Foreside Development Company (Portland) L.L.Bean Corporate Headquarters, Zachau Construction (Freeport) Freedom Place at 66 State Street, Developers Collaborative (Portland) VA Outpatient Clinic, J.B. Brown & Sons and FD Stonewater (Portland)
Please join us this week in celebrating the Reconstruction & Reuse of Historic Building 12.
MEREDA: Describe the building and project.
Reconstruction & Reuse of Historic Building 12: The Portland Company located at 58 Fore Street is rich in history as a former locomotive manufacturing complex which was one of the oldest, continually operating facilities in the country. The Portland Company complex was the only locomotive manufacturing facility in the country that was specifically established to produce locomotives. In addition to manufacturing locomotives, the buildings in this complex produced equipment for Maine’s paper textile and canning industries as well as marine engines, boilers and other parts for shipyards throughout Maine. The Portland Company made a significant contribution to the development of Maine’s railroads and maritime shipping industry. The future industrial expansion, commerce and tourism all were impacted in a positive way from improved transportation that was possible because of products manufactured in these buildings, including Building 12. This complex was originally founded in 1846 by John Poor to meet demands of a new, fast growing railroad industry in the United States. Hand-made wood patterns that were used to cast iron and steel for locomotive parts were a key piece of how the complex operated and a large capital investment for the Portland Company. The patterns were reused over long periods of time and preserving them was critically important, so they were stored in several locations, including the Pattern Storehouse (now known as Building 12). This building was located away from the other buildings and built of brick with a slate roof. Today, the Reconstruction and Reuse of Historic Building 12, which served as the Pattern Storehouse (built c.1895) for the Portland Company, is the catalyst to redeveloping the former Portland Company Site into a mixed-use urban waterfront neighborhood.
The reconstruction and reuse of Historic Building 12 was complex. In 2014, a detailed evaluation of the buildings at the Portland Company was prepared by Becker Structural Engineers. Building 12 was found to be in poor condition, particularly the roof along with significant masonry damage. The roof, upper floor and columns of building were noted to need reconstruction and masonry walls rebuilt. More specifically: • Slate roof materials were loose and missing in many locations, • Rotten wood roof trim or completely missing in locations, • Daylight visible through the roof, • Roof rafter framing undersized, • Roof sag, • Third floor deck and joists rotten, • Ground floor dip at the center and wood sills bearing on grade as well as columns, all rotten, • Structural supports hanging from floor beams due to column deterioration, • Separation in diagonal beam supports at the columns, • Exterior brick masonry bearing walls showed deterioration including open joints, bowed walls, cracks and rust, and • Rotting window sills with broken windows.
Though the building condition was found to be poor, Becker also noted it was well constructed in its day.
Due to the condition of the building, Portland Foreside worked with a talented team and the City of Portland to undertake a significant planning, permitting, documentation and preservation efforts spanning a 5-year period that took place before the start of disassembly, relocation and reconstruction of historic Building 12. Upon careful documentation of the building, including 360 laser scans of the facades, the original masonry structure was fully disassembled. The brick was cleaned and stored, and the post and beam timber and salvageable joists and floorboards were saved for reuse. The Building 12 footprint was moved 200 feet from its original location to a new home at 115 Thames Street, making way for construction of the roadway network identified in the City’s Master Plan. The reconstructed building utilizes modern structural steel and composite slabs, modern insulated wall and roof systems, and historic reproduction windows. The building’s masonry preserves the historic character through reuse of the original brick and precise reproduction of the original masonry coursing, character and imperfections. Historic Building 12 now houses a restaurant (TWELVE), office space and residential condominium and the core and shell and restaurant project were completed in 2022. It’s an incredible transformation!
MEREDA: What was the impetus for this project?
Reconstruction & Reuse of Historic Building 12: Building 12 was in jeopardy of becoming buried by the grade of a new roadway being put in adjacent to it. Our team realized that it was necessary to move the building so embarked on a process to determine the best means and methods for this to happen.
MEREDA: That sounds like quite a process. How long were you in the planning stages before construction started?
Reconstruction & Reuse of Historic Building 12: In total, it was a five plus year process to evaluate the condition of the building, develop potential options for relocating it, prepare for its disassembly and store the building components, design the new version of the building, secure permits and then reconstruct the building.
MEREDA: Tell us about the most challenging aspect of getting this project completed.
Reconstruction & Reuse of Historic Building 12: The most challenging aspect of completing this project was the actual reconstruction of the building after the different components had been in storage for several years.
MEREDA: Something unexpected you learned along the way was….
Reconstruction & Reuse of Historic Building 12: Building 12 and its original use as a pattern storehouse was unique because it was originally sited away from the core production buildings of the Portland Company to keep flammable materials away from production areas.
MEREDA: Now that it’s complete, what feature of the project do you think makes it the most notable?
Reconstruction & Reuse of Historic Building 12: Its most notable feature is the recognizable Portland Co. sign painted on the exterior western façade – this was part of its original façade.
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On May 25, Leanne Nichols, a Broker with Keller Williams Realty, was a commentator for the Maine Real Estate & Development Association’s (MEREDA’s) 2023 MEREDA Index. Leanne’s comments on the Residential Sector follow Economist Charles Colgan’s analysis for 2022.
The MEREDA Index is a measure of real estate activity designed to track changes in Maine’s real estate markets. The Index is a composite of nine seasonally adjusted measures reflecting both new development and transactions involving existing properties and it covers both the commercial and residential markets statewide. The most recent edition covers the year 2022 and provides commentary on the Commercial, Residential, and Construction sectors. The MEREDA Index for 2022 is 115.8
THE RESIDENTIAL COMPONENT: 112.8
[Charles Colgan Analysis] “The weakest part of the MEREDA Index was the residential sector. Three of the four components of the Index showed declines on a year over year basis and on a 4th Quarter over 4th Quarter basis. The only component that continued to increase was the median sales price, whose index value grew 18% on an annual basis. At 174.3, the median price index reached its highest annual value. The highest quarterly value was 186.7 in 2022Q2 but the growth in the index value halted in the second half of 2022 falling to 170.0. The largest drop in residential Index components was in permits; the index value fell by more than 32% on an annual basis. This fall in the number of permits reflects higher interest rates. Both mortgage originations and the number of existing units sold declined, with their index values falling 18.3% and 17.1% respectively (year over year).”
[Leanne Nichols, Broker, Keller Williams Realty] “In 2022, the residential real estate market in Maine saw home prices soar to staggering new heights, further deepening the crisis many Mainers face to access affordable housing. The year started with an average mortgage interest rate of approximately 3%. As it became evident that inflation was not transitory, this interest rate more than doubled to a peak of over 7%, which affected affordability and forced many hopeful homebuyers out of the market. However, the low inventory and strong in-migration kept Maine’s market very strong for sellers throughout 2022. For example, I worked with buyer clients who finally closed on a South Portland home in September after four multiple offer situations. The home was listed for $680,000 and closed for $830,000.
This robust statewide sellers’ market resulted in a striking median sales price of $335,000 in 2022, an increase of 12.04% from the previous year’s median sales price of $299,000. Meanwhile, unit sales decreased by 17.49%, further impacting the acceleration in home prices. All 16 counties in Maine witnessed an increase in the median sales price and a decrease in the number of home sales compared to 2021, with 2022 home sales dipping below 17,000 units, for the first time since 2015.
The pandemic has played a significant role in these changes, including the impact of in-migration and work from-home trends. I worked with a couple that fled California who purchased new construction in Pownal. They work remotely and will be relocating their life here. A recent MoveBuddha report from November 2022 identified Portland as the #2 city to move to, and Maine as the #3 state for in-migration. This can also be seen in a statistical search from Maine Listings, which shows that pre-pandemic an average of 27.4% of out-of-state zip codes purchased Maine real estate. In 2021, it reached 35.4%, and remained steady at 34.4% in 2022.
Some of the trends in Maine’s residential market that accelerated during the pandemic could shift after a couple of exciting winters, or it could be that Maine has been discovered. If the latter is the case, Maine not only has an opportunity but an imperative to rethink its most recent sprawl-centric local zoning ordinances. We need to accommodate the influx of new Mainers while also taking care of the hard-working Mainers already here. Maine can embrace a new vision for itself – update aging housing stock and upgrade existing infrastructure – to build a future that all who choose to call Maine home can enjoy.”
New Trends in Housing Design: A Conversation with Ryan Senatore, AIA LEED AP, & Will Savage, P.E.
Will Savage, President of Acorn Engineering and Ryan Senatore, Principal of Ryan Senatore Architecture, sit down with MEREDA Vice President Shannon Richards and MEREDA President Craig Young for the ninth episode of MEREDA Matters – the podcast that puts you in the room with the people who are driving responsible development in Maine. Frequent collaborators, Savage and Senatore discuss some of the high-profile projects they are working on throughout the state, including Maine’s tallest building at 201 Federal Street. The group explores new design trends in housing such as smaller unit sizes, enticing common spaces, and desirable building amenities. Savage and Senatore also talk about their collaborative design process and share their approach to incorporating affordable housing units and energy efficiency into their buildings. The discussion on design continues as the group looks at how the recent rise of in-migration to Maine from larger cities has impacted housing and how the labor shortage has driven the use of different building materials.
The MEREDA Matters podcast is sponsored by NBT Bank and Landry French Construction. Additional sponsors include Bangor Savings Bank, Clark Insurance, A Marsh & McLennan Agency LLC Company, and The Boulos Company. A new episode will be released each month and each will feature new voices from the real estate and development industry.
Each year, the Maine Real Estate & Development Association (MEREDA) recognizes some of the state’s most “noteworthy and significant” real estate projects, completed in the previous year. The exemplary projects from across the state, completed in 2022, not only embody MEREDA’s belief in responsible real estate development, but also exemplify best practices in the industry, contributing to Maine’s economic growth by significant investment of resources and job creation statewide.
This year, MEREDA honored projects from Lewiston to Portland to Biddeford, with each receiving special recognition at MEREDA’s 2023 Spring Conference on May 25th.
In a multi-part series exclusive to the Maine Real Estate Insider, we’ll provide an up-close look at the most notable commercial development projects of the past year that are helping to fuel Maine’s economy in terms of investment and job creation. MEREDA is proud to recognize responsible development based upon criteria including environmental sustainability, economic impact, energy efficiency, difficulty of the development, uniqueness, social impact and job creation.
MEREDA’s 2022 Top 7 recipients include:
Lincoln Hotel & Lofts, LHL Holdings and Chinburg Properties (Biddeford)Gauvreau Place, Community Concepts Inc. and Avesta Housing (Lewiston) Shipyard Brewing Redevelopment, Bateman Partners, LLC (Portland) Reconstruction & Reuse of Historic Building 12, Portland Foreside Development Company (Portland) L.L.Bean Corporate Headquarters, Zachau Construction (Freeport) Freedom Place at 66 State Street, Developers Collaborative (Portland) VA Outpatient Clinic, J.B. Brown & Sons and FD Stonewater (Portland)
Please join us this week in celebrating Shipyard Brewing Redevelopment.
MEREDA: Describe the building and project.
Shipyard Brewing Redevelopment: The 86 Newbury Street redevelopment was a continuation of work started by Shipyard Brewing and Fred Forsley when Shipyard purchased 75% of the City block in the late 1980’s. The site was originally the American Hoistway Manufacturing facility. For this portion of the redevelopment 86 Newbury Street, LLC created roughly 450,000 SF of new structures. This mixed use project consists of office space, pharmaceutical manufacturing, brewery, hotel and residential uses all wrapped around, and over a pre-cast concrete parking structure.
MEREDA: What was the impetus for this project?
Shipyard Brewing Redevelopment: The major impetus for this project was to maximize the development potential on a parcel of land that was formerly an industrial site with major environmental challenges. This project was also in response to a need by Covetrus for a corporate headquarters in Portland Maine. Covetrus required over 120,000 SF of office space and pharmaceutical manufacturing and distribution facilities. This site was a perfect candidate for those needs as well as creating the Cambria Suite Hotel and handling all parking within the site.
MEREDA: That sounds like quite a process. How long were you in the planning stages before construction started?
Shipyard Brewing Redevelopment: The planning of this project took a little over 2 ½ years prior to closing financing and starting construction.
MEREDA: Tell us about the most challenging aspect of getting this project completed.
Shipyard Brewing Redevelopment: One of the major challenges faced during construction were the existing site conditions. The environmental remediation of the underlying soils which were contaminated required over $2M in remediation costs. The site itself is sloped from Newbury Street down to Fore Street with a grade change of 32’ in elevation. This grade change required significant engineering to accommodate a six-story structure with footings up to 45’ below Newbury Street. A coffer dam was designed to hold back Newbury Street while the footings and foundation s wall were constructed. The majority of all this work was done during the entire duration of the Covid pandemic that shut down the majority of trades and supply chain causing significant lead time and delivery delays.
MEREDA: Something unexpected you learned along the way was….
Shipyard Brewing Redevelopment: The most unexpected thing we learned along the way is the resilience of all of the contractor, subcontractors and design team. Despite the global pandemic that shut down the majority of work globally this team showed up to work every day to meet the construction challenges. The entire team adapted to remote meetings when required but also adapted to the safety protocols to allow construction to continue. Between daily health checks, masks, washing stations and work teams to allow for social distancing the teams did an amazing job. Every day we were confronted with new problems and every day the teams came together with solutions.
MEREDA: Now that it’s complete, what feature of the project do you think makes it the most notable?
Shipyard Brewing Redevelopment: The list of items that make this project notable are many. The project itself consists of one of the largest green roofs in Portland which is impressive by itself. Adding to that we were able to provide the primary tenant a loading dock facility under the entire project that allows for 14’ of ceiling height allowing tractor trailer trucks to pull in under the campus for loading and unloading. The views created for the office tenants overlooking Casco Bay, the City of Portland and looking toward Mt Washington are amazing. Additionally the creation of the large courtyard 4 stories in the air that is part of the Cambria Suite Hotel provides and amazing atmosphere to enjoy food and beverages with family and friends.
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Holiday Inn By the Bay 88 Spring Street Portland, ME
Lunch: 11:30-12:00 Program: 12:00-1:00
About the Event:
Meet the Land Use Designer and Environmental Professional – Defining their Role in the Development Process
Join MEREDA’s Emerging Leaders Committee for its next Lunch & Learn Event!
In this second installment of the DevelopME series of panel discussions organized to understand the roles and responsibilities of professionals engaged in development projects, we introduce a land use designer and an environmental professional. While our first panel offered insight from a broker’s perspective, this conversation will focus on when you should consider hiring a land-use design professional and what questions and information they provide to the team. We also explore how (but more importantly, when) it’s best to engage with an environmental professional and how they can guide the development team on the feasibility of development projects after the initial environmental assessment when teams navigate challenges associated with environmental impacts.
Meet the Presenters:
Lucas J. Benedict is a Senior Project Manager and Licensed Professional Geologist at Credere Associates, LLC in Westbrook, Maine. With nearly two decades of experience as an Environmental Professional, he and his Credere ‘associates’ specialize in sustainable Brownfields Programs and redevelopment projects across New England. Lucas not only helps private- and public-sector clients mitigate business risks tied to environmental challenges such as ‘Urban Fill’, hazardous wastes, and building materials containing PCBs, asbestos, and heavy metals, but also oversees Environmental Remediation/Construction contracts for the Federal Government/Department of Defense, managing tasks that include remediation, abatement, general construction, repairs, and demolition.
Henry Hess is a seasoned Landscape Architect and Project Manager at Sebago Technics. With over a decade of expertise in land and master planning, site design, due diligence, planting design, permitting, and construction, Henry’s skills as a Maine Registered Landscape Architect have been instrumental in shaping communities across various cities and towns in Maine.
Since joining Sebago Technics in 2018, Henry’s leadership in Landscape Architecture has consistently delivered creative solutions to complex site challenges. In recognition of his outstanding contributions, he was promoted to the role of Project Manager in 2023. In this capacity, he Is responsible for overseeing the overall development, budget, schedule, and approval of projects while skillfully maintaining strong relationships and communication with clients and regulatory authorities.
DevelopME Committee Co-chairs, Matt Pitzer of Simpson Gumpertz & Heger and Gwen Hulit of Bangor Savings Bank will moderate the program.
Registering for this Event: Purchase your tickets here. Registration closes at 4:00 PM on September 19, 2023.
Refund Policy: Your RSVP is requested by September 13. Payment is expected at the time of registration. No refunds will be granted to anyone who registers, but fails to attend or who cancels after September 13.
Ticket Prices: Members: $35 each | Non-Members: $45 each Prices increase by $10 after September 13.
This event is Sponsored by Sebago Technics and Credere Associates , LLC.
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MEREDA’s “Morning Menu” Breakfast Series Returns on September 14th
In-Person – Pre-registration is required.
Seating Capacity: 110 – We will not be able to accommodate walk-ins.
The Portland Regency Hotel 20 Milk Street, Portland, ME
Buffet Breakfast: 8:30 – 9:00am Program: 9:00 – 10:00 am
About the Event:
MEREDA is pleased to announce that Maine’s Economist, Amanda Rector, will address the membership and kick off our Fall Morning Menu Breakfast Series!
Amanda Rector is the State Economist for Maine. In this capacity, she conducts ongoing analysis of Maine’s economic and demographic conditions to help inform policy decisions. She joined Maine state government in 2004 and has served as State Economist since 2011. She earned a BA in Economics from Wellesley College and a Master’s in Public Policy and Management from the Muskie School of Public Service at the University of Southern Maine.
Amanda holds membership on the State of Maine’s Revenue Forecasting Committee, the advisory board for the New England Public Policy Center at the Federal Reserve Bank of Boston, and the Board of Visitors at the Muskie School of Public Service. She also serves as the Governor’s liaison to the U.S. Census Bureau.
Amanda will provide an update on recent economic and demographic trends in Maine and the outlook heading into the fall. Join us on September 14th and learn about what’s been happening around the state with migration, workforce and employment, income, inflation, and more.
Don’t forget, this breakfast will now run from 8:30 – 10:00 AM in an effort to accommodate those working around childcare and bus drop offs and pick ups.
Cost: Members: $45.00 each | Non-Members: $55.00 each
This event is sponsored by Norway Savings Bank.
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On May 25, Drew Wing, President of Zachau Construction, was a commentator for the Maine Real Estate & Development Association’s (MEREDA’s) 2023 MEREDA Index. Drew’s comments on the Construction Sector follow Economist Charles Colgan’s analysis for 2022.
The MEREDA Index is a measure of real estate activity designed to track changes in Maine’s real estate markets. The Index is a composite of nine seasonally adjusted measures reflecting both new development and transactions involving existing properties and it covers both the commercial and residential markets statewide. The most recent edition covers the year 2022 and provides commentary on the Commercial, Residential, and Construction sectors. The MEREDA Index for2022 is 115.8
THE CONSTRUCTION COMPONENT: 102.5
[Charles Colgan Analysis] “The Construction Employment Index was up rather strongly at 6.4%. The seasonally adjusted Index had values over 100 for all four quarters, though there was a steady drop over the year. The strength in the construction sector relative to the other sectors is most likely a function of spending fueled by the Bipartisan Infrastructure Law (BIL), which allowed Maine DOT to expand the number of projects underway. The BIL will continue to support construction, but the fall in residential permits noted above will offset at least some of that stability in construction.”
[Drew Wing, President, Zachau Construction] “2022 was our biggest year in our 53-year history! I’m sure other firms shared this experience. While the volume of work across all sectors was tremendous, it was probably one of the most challenging years for both our pre-construction efforts and project delivery.
More than any other year, 2022 required true partnerships between owners and construction managers. Nearly 100% of our work is negotiated work, where we work as construction managers for a predetermined fee and give the owner a “Guaranteed Maximum Price ‘’ for the work. While there has been a general trend toward this project delivery method, it became one of the only viable options for the construction of large projects in the last few years. A high level of trust was required by both parties with each taking on additional risks to advance projects amidst supply chain disruptions, labor shortages and continued price escalation. Careful planning and early procurement – often in advance of final contracts, was required with increased risks for both parties. One of our project managers joked that she didn’t know what she would do with the other 6 hours of her day if things returned to a more normal state, emphasizing the amount of additional work required to manage this scarcity and volatility.
2022 made us a stronger company. It was like hitting the gym hard – finding new muscles and strengthening the rest. We realized very quickly that our best opportunity for impacting the trajectory of a project was early and we began investing more and more resources in early planning and the pre-construction process. The tools, processes and protocols that we developed have become standard operating procedures, increasing our capacity and ability to manage a dynamic and complex market. We were fortunate to work with some of the best companies in the state and with individuals who understood the importance of transparency and a team approach for dealing with the complex challenges that 2022 presented. This reinforced our core values and commitment to building honest relationships and working with good people.
Finally, 2022 also reinforced the paramount importance of our people, as well as the need to keep and attract new talent. We worked hard to understand the needs and wants of our people so we knew what was needed to build our team. We have doubled-down on our commitment to maintaining a robust and fun culture which celebrates our people, their interests, and hard work.”
