Tuesday, May 11, 2010

The Charlotte Observer today - "To keep busy, many contractors turn to renovations"

We stumbled over this article by Kerry Singe in the Charlotte Obsever today:
>> Two years ago, interior designer Irene Suchoza spent most of her time working on the insides of new, multimillion-dollar buildings.
Today, the associate at Gantt Huberman Architects is helping clients rethink existing structures, figuring out how to give old buildings new life and do so on a tight budget.
As demand for new commercial building projects has dried up, more contractors, designers and architects are finding themselves chasing smaller jobs that they might have once been too busy to do.
In March 2008, about a third of commercial building permits issued that month in Mecklenburg County were for renovations. In March, renovations and upfits accounted for more than 60 percent of permits issued. An upfit is work done to an existing space to fit a tenant's needs.
The total number of commercial building permits granted has plummeted since peaking in 2008. The Queen City was once dotted with construction cranes as firms, particularly banks, expanded. The growing demand, combined with easy capital, fueled a building spree. Then the recession hit, banks cut their spending and developers abandoned projects.
To survive the doldrums, construction companies are wooing firms that are either downsizing or adding employees but staying in their existing space.
Some building owners are taking advantage of relatively low labor and material costs to make their buildings more energy efficient. Other clients simply don't have the money to build as big as once planned but want to make changes.
"Upfits is definitely one of the big names of the game right now," said Dave Simpson, N.C. building director for Carolinas AGC, a contractors' trade group. "People in the construction industry are interested in doing any kind of construction, whether it be new buildings, old buildings, upfits, downfits, you name it. They're extremely hungry right now."
Getting more for their money
Johnson C. Smith University had planned to build a new student union building. Then the recession hit, and the university couldn't afford a $15 million center, said Gerald Hector, the university's vice president for business and finance.
So, the university reached out to its architect, Gantt Huberman Architects, to see what could be done to update the existing center, with its confining offices and stark blue and gold color scheme.
The firm spent 10 months redesigning three floors. Ultimately, the university spent around $1.5 million on changes that included updating the cafeteria flooring and ceiling, modernizing the color scheme and creating a contemporary glass partition that doubles as art.
Recyclable carpet and new lighting fixtures were installed in the upstairs lounge, along with a flat-screen TV and surround sound. The bottom floor, known as the bullpen, was opened up and modernized to create a more friendly gathering place.
When the renovated space was shown to alumni at homecoming last year, they were "blown away," Hector said. Besides making students happier, Hector said, the space could encourage alumni to donate more money.
"We could not afford to go out and borrow or pay for a new building out of whole cloth, but we had to do something," Hector said. "Sitting back was not an option for us. We were able to get a lot for a lot less money."
The senior designer on the project, Suchoza said she and her colleagues were able to negotiate with manufacturers who shaved as much as 10 percent off prices. She found a manufacturer, for example, willing to offer "rock bottom" prices on environmentally sustainable linoleum, keeping with the university's interest in using "green" building materials.
She said she's looking forward to designing a new student center when the university is ready. But it was nice to see fast results. She estimates it would have taken up to three years to design and build a new student center.
"It's really nice to have immediate gratification," she said.
A different type of work
Because renovations and upfits are typically quicker to complete and cost less than new construction, companies rely on a steady supply of the smaller jobs.
Of the $172 million worth of building permits issued in March, renovations accounted for $55 million.
"It's why architects are struggling these days," said architect Harvey Gantt, a former Charlotte mayor. "You have to do a lot of them."
RT Dooley Construction Co. is doing a large number of renovations in uptown, benefiting from the center city's oversupply of new office space.
Office vacancy rates have risen to recent highs - hitting 8.8 percent last year, up from 2.5 percent the year before - as an expected 3 million square feet of new space comes on the market. Tenants have been able to negotiate cheaper leases and upgrade existing space. Or they're moving to newer buildings.
"It's steady work," CEO David Dooley said of tenant upfits. His firm has been busy preparing the 48-story Duke Energy Center for occupants. "I think over the next five years, you'll see a pretty active market."
Interiors work requires different thinking and customer skills than new construction, said Dooley, whose firm was acquired last year by Balfour Beatty Construction U.S. Renovations are sometimes done at night or weekends. Employees may work in occupied spaces.
"You've got to be very detail-oriented," Dooley said, "and you've got to over communicate because you've got people working around you." <<

Read the whole article in the Charlotte Observer

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