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WESTERN WAYS:
CONTRACTORS MONITOR TRENDS
Firms stay on top of the various industry trends but
build on values.
Brian A. Lee
FRONT RANGE
FORAY
Alberta Development Partners adds color
to Colorado with a mixed-use project.
The primary building focus for Englewood, Colorado-based
Alberta Development Partners LLC is retail. According
to senior development manager Bryan McFarland, Alberta
Development Partners’ “bread and butter”
for the last 12 years has been community centers
— big box, grocery-anchored properties with
retail strips — but the company is diversifying
its portfolio.
“The mixed-use component really comes into
play on the Southlands project,” says McFarland
of his company’s current project southeast
of Denver that will feature 1.5 million square feet
of retail, 200,000 square feet of office space and
1,100 multifamily units. “You could consider
it the breakthrough project for us in terms of moving
beyond just purely being a retail developer.”
The opportunity for building Southlands came about
with the development of the E-470 tollway on the
eastern perimeter of the Denver metro area, especially
the stretch linking nearby Aurora, Colorado. After
the completion of the E-470 corridor, the area was
established as a regional activity center. Don Provost,
principal at Alberta Development Partners, then
took the lead role in formulating the plan for the
mixed-use project and assembling the design team
while consolidating the different land parcels into
the necessary 301-acre project area.
“The Southlands project is his vision,”
says McFarland. “Like any large project, it
was a challenge. You have to give someone like Don
a lot of credit for advancing a project of this
size, which is on par with any of the largest retail
projects in the country.”
At the heart of the Southlands property will be
the town center area, which is modeled after the
New Urbanism concept of mixed-use development. There,
visitors will experience a Main Street environment
with offices located over the street retail shops.
“Our customers will have the ability to live,
work, shop, play and dine in one setting,”
says McFarland. “The product is an emerging
trend in national retail and it’s one we think
is extremely viable particularly given the demographics
in our area — 42,000 new homes planned over
the next 5 years, 270,000 people in the 5-mile radius,
and a [median household] income of $92,000.”
McFarland says it’s important to be aware
of the different trends in the building industry
but nothing will ever replace quality. That is the
secret to Alberta Development Partners’ success.
He and his colleagues will always go the extra mile
to produce a higher quality result in their community
centers and mixed-use projects.
“We’ll spend the extra few dollars per
square foot to provide a higher level of finish
whether that’s through natural stone, use
of brick or even sculptures, enhanced landscaping…
that kind of thing,” says McFarland. “When
a customer enters one of our sites, it’s just
a different feel, so it creates a more comfortable,
pleasing environment.”
— Brian A. Lee |
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Western Real Estate Business recently spoke with several general
contractors to see what trends are prevalent in the building
industry. The focus on mixed-use development, especially in
land-hungry California, was a common theme. The impervious nature
of the ever-growing Las Vegas market was also emphasized. Above
all came this underlying theme — trends come and go but
turning out a quality product must remain the Number 1 goal.
Penta Building Group
Jeff Manning, business development manager for PENTA Building
Group in Las Vegas, believes that quality should never be included
in a conversation about trends. Quality must be a constant in
the building industry for success to be achieved. For PENTA
Building Group, it has been.
“Our niche is basically what we provide our clients,”
says Manning. “We have a real personal approach to contracting.
We don’t just look at projects, we have a real client
focus as far as our ability to have top level management involved
in the minor details of projects.”
PENTA Building Group focuses primarily on constructing hospitality,
timeshare and gaming properties but is increasing its retail
and industrial business. The three principals of the company,
who broke off from another contractor to found PENTA in 2000,
have run high-profile projects in the past. Ken Alber, vice
president of PENTA and one of the founders, managed the construction
of the enormous Paris Hotel & Casino in Las Vegas when he
was with Perini Building Company.
“That was a $625 million job that was built in 18 months
with all kinds of different features and restaurants,”
says Manning. “That thing is a city in itself. When he
sits in on a $50 million project, he brings a lot of expertise
to the board.” Whether the client is asking about construction
methods, budgeting, entitlements, inspections or other issues,
Alber and his colleagues have the utmost credibility because
of their track records.
The PENTA principals saw an opportunity in the fact that a lot
of the medium-sized construction projects were not getting the
full service that they warranted. From that start and their
industry connections blossomed a very successful general contracting
business, one that will eclipse $200 million in revenue in less
than 4 years of operation.
Manning says that the Hilton Grands Vacation Club Timeshare
is a project that typifies the company’s current operations.
The first of four phases, the 26-story, 440,000-square-foot
tower comes with the full complement of amenities from swimming
pools to upgraded finishes and a $70 million price tag. The
timeshare business is booming, says Manning, and PENTA is in
a good position to facilitate that growth.
As could be expected of a responsive, service-oriented contractor,
PENTA adjusts to different industry trends only if they reflect
a change in the needs of the customer.
As far as geographical markets, one trend is hard to miss. “There’s
certainly the boom on Las Vegas Boulevard and that will continue
and we’re positioned great to do that work,” says
Manning. “We’re really fortunate to be based in
Las Vegas. We’ve had a dead stock market for the last
couple years and things have been slowing down all over the
country and yet we’ve been able to enjoy this phenomenal
growth.”
Weitz Southwest
The Weitz Company, the oldest contracting firm west of the Mississippi
River, entered the Phoenix marketplace 25 years ago to build
a senior-living community for an existing client. Finding a
favorable market for development, the company’s southwest
business unit was born and has been there ever since.
“We do everything from mini-storages to $100 million resorts
and office campuses,” says Clay Wells, the business development
manager for Southwest Weitz. Currently, the division’s
major development focus includes retail, senior living and hospitality
properties.
Wells professes that a company’s values and strong relationships
with customers help to stabilize and protect it from the negative
trends of the building industry and economy in general. This
is why the Weitz Company has continued to find success while
others have struggled. All one needs to look at is the longevity
of the company, how long people stay with the firm and, of course,
the bottom line.
“We continue to grow and that’s in a down market
and a down economy,” says Wells. “This southwest
division last year did $73 million [in construction projects],
this year we’ll do somewhere between $155 million and
$160 million and next year we’ll do over $200 million.”
In essence, it’s the anti-trends that really matter, according
to Wells. If one’s company has a solid foundation in a
constantly changing market, then it’ll be ready to capitalize
on the ups and weather the downs.
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| Weitz Southwest is currently building the approximately
$70 million, 1.2 million-square-foot Ocotillo Corporate Center in
metropolitan Phoenix. It will be the ninth project that the Weitz
Company has built for Wells Fargo Bank. |
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For example, Weitz Southwest is currently building Ocotillo
Corporate Center, an approximately $70 million, 1.2 million-square-foot
office campus for Wells Fargo Bank in metropolitan Phoenix.
Wells says it’s the ninth construction job that the Weitz
Company has done for Wells Fargo across the country but its
first for the client in the Phoenix area. Even in a not-so-robust
office market, Weitz Southwest’s reputation and relationships
keep the company’s construction schedule full.
Another example of Weitz Southwest’s steadfast business
approach and the fruit it bears is the Friendship Village of
Tempe. The original construction of this senior-living facility
was what brought Weitz to Arizona. Now, the southwest division
is handling the expansion and renovation of the retirement community.
“Like Wells Fargo, here’s a client we built for
25 years ago and now we’re back out there,” says
Wells. “We built the original facility and now they’re
undergoing a major upgrade to the tune of about $48 million.”
R&G Builders
Californians love their cars and treasure their land. While
that’s led to traffic on the freeways and congested property
lines, one general contractor has found a way to capitalize
on those conditions while advancing smart development. The solution
for R&G Builders is to build vertical with mixed-use development
that incorporates parking structures.
Founded in 1984, R&G Builders started out primarily as a
contractor specializing in subterranean and freestanding parking
facilities. Though never forgetting its parking roots, the company
has evolved into a well-rounded developer of retail, residential
and storage facilities.
“Being able to do the subterranean parking and the freestanding
parking with retail above that or housing above that, R&G
Builders is in the forefront of today’s mixed-use construction,”
says Kirk Badii, vice president of the company. “The success
of our vertical mixed-use projects has labeled R&G Builders
as leaders in this industry.”
Badii mentions a long list of awards R&G Builders has won
for its dynamic projects, ranging from “most creative
use of infill space” to a “city award for beautification.”
It’s no wonder that more than 85 percent of the company’s
projects are negotiated contracts.
“We add value to the team,” says Badii. “We
take it as a consultative-based relationship with our clients.
Early teaming with our clients to provide design input and budgeting
and scheduling information has created positive outcomes in
all of our projects. Value engineering is a big part of our
program. We like to save our clients money and that’s
why our clients keep coming back to us.”
Beyond the awards and the talk of business strategy is the fact
that R&G Builders’ portfolio of services is a fine
match for California’s development needs. With the high
density in the Golden State, land is at a premium. A developer
that can combine several commercial real estate components within
such real estate restrictions is one that will be successful.
“Right now in California, there’s no land left,”
says Badii. “Everything’s going vertical.”
Whether it’s the design-build Tower at Convention Court,
a 9.5-story parking structure in Northern California; or the
mixed-use project in Walnut Creek that incorporates two levels
of subterranean parking, ground-floor retail and apartment units
above that; R&G Builders has solidified its place in the
commercial real estate market. R&G’s portfolio of
services is in line with the direction of development in California.
“Our success in mixed-use construction can be directly
linked to our own in-house parking structure division,”
says Badii. “R&G Builders self-performs the concrete
work on all of our projects and has design-built most of the
parking structures we have constructed. We do not need to subcontract
that work and that’s a big cost-saver.”
Lyle Parks Jr. Inc.
Founded in 1960, Lyle Parks Jr. Inc. has specialized in retail
construction projects in Southern California for a long time.
However, in the last 5 years, as the Golden State’s sprawl
dramatically increased, the company has evolved with the development
trends.
“As California has urbanized, we’ve gotten into
the mixed-use project segments,” says Jim Carlson, vice
president of marketing for Lyle Parks Jr. “Those segments
contain subterranean parking, a street retail component —
sometimes two stories — and then some sort of housing
element above that.”
The first such opportunity for the contractor was the 142,000-square-foot
Birch Street Promenade in Brea, California. This was an urban
redevelopment project that involved clearing several structures,
adding a theater component and a municipal parking facility,
and teaming with four or five architects to develop a main street
environment.
“They wanted the eclectic look with different ownerships
and different architects and different periods,” says
Carlson. “That was street retail and it had two-level
loft apartments above that.” Perpendicular to Birch Street
near Brea Boulevard, Lyle Parks Jr. built Super Block, a power
center that houses major retailers such as Old Navy and Tower
Records.
Next, the company went to Hollywood, California, where it worked
with a retail developer on a block-long project near Hollywood
Boulevard. The seven-story Hollywest property features one level
of subterranean parking and a courtyard with two levels of retail,
including an integrated Ralphs market. On top of all that is
a 30,000-square-foot Ross Dress-4-Less store followed by a four-level,
100-unit senior apartment complex.
Around the first of the year, the company will finish the Western
Carlton, an air-rights redevelopment project on the corner of
Western and Hollywood boulevards in Hollywood. The property
will feature 15,000 square feet of retail, a daycare center
and a 45-car subterranean parking structure, all of which rest
on top of an MTA subway station. Above all that, there will
be 60 units of low-income apartments ranging from one to four
bedrooms.
“Now, we’re looking at lots of different [mixed-use]
components like that, especially since the city of L.A. has
increased the development rights for properties that border
major transportation thoroughfares,” says Carlson. “So
they’re giving people more incentive to do more of these
mixed-use projects. We’re suffering such a housing shortage
in California that there’s a lot of this high-density
development.”
“Developers have been allowed to do this suburban sprawl
and finally with the drive times and the freeways you just can’t
support that anymore,” says Carlson. “You’re
starting to see this increased density and different lifestyles
as a result.”
©2003 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints of
this article contact Barbara
Sherer at (630) 554-6054.
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