What to Look For in a Commercial Construction Contractor

The overall outcome of any build structure relies on a single, very important decision – choosing the right commercial construction contractor. A poorly selected commercial construction contractor is likely to build a poor quality commercial building that will end up costing more than what was budgeted for and may not be what was originally intended. Therefore, there are a number of important attributes individuals should look for in any prospective commercial construction contractor.

A good commercial construction contractor must always present them self and operate their construction business in a business-like demeanor. A good contractor will respect the schedule of the business owner and always show up on time and ready to do whatever needs to be done that day. They will be competent, organized and able to deal directly with any questions or concerns the business owner may have. They will create a sense of confidence because they will not break any promises. Individuals should look at how a contractor deals with them before they sign the contract. It will say a lot about how that individual expects to be treated throughout the duration of the project.

Communication is a key attribute in any commercial construction contractor. Construction is considered a “people business.” A good contractor is also a good listener and communicator. They will translate the ideas of the individual and their goals into a very workable plan and then provide insight on what can be expected. They will create a strong base for a good working relationship and build positive rapport. If an individual does not feel as though they are communicating with a contractor effectively during the interview process, chances are it will continue through the project.

Commercial construction is a complex task. The contractor needs to demonstrate the experience and skills needed to get the job done. They need to have years of experience before they can manage a large project. There are different kinds of projects and it is important to find a contractor that has the experience in that type of commercial construction work. If they do, ask them to deliver proof in the form of referrals and recommendations.

A good, well established commercial construction contractor will have a professional reputation. This can be determined through the use of references. Ask the contractor to provide references. Have them include not only references for themselves, but any other businesses they may work with, including material suppliers. It is important to know that all companies involved have a professional reputation.

Lastly, look into the business practices of the commercial construction contractor. Ask for a certificate of insurance to ensure they have necessary coverage, including liability insurance and workers’ compensation coverage. Call the insurance company to ensure the coverage has not lapsed. Also check out their licenses and call the state licensing board to see if the license has ever been suspended or if there are any claims against the commercial construction contractor. Make certain they are able to get all necessary building permits and follow all zoning laws.

Our Company was established after recognizing the need for excellence in the construction field. We are dedicated to customer satisfaction and hold ourselves to a high standard of quality services. From preliminaries to completion; our team encompasses, financial assistance, zoning, designing, permitting, and construction, all your construction needs under one roof. We offer all construction services, ranging anywhere from a complete turnkey project to a simple renovation. We have completed many projects such as retail spaces, general offices, warehouse spaces, restaurants, and build-outs.

How the Recession Is Affecting the Commercial Construction Industry

The ‘Great Recession’ theoretically lasted about 18 months, from 2007 to 2009. Recovery has been agonizingly slow in many industries but we are now in 2015 and the construction industry is more rapidly shrugging off the residual effects of the recession.

How Bad Was It?

Even though construction industry is cyclical and recession typically follows a boom period, nothing could have prepared it for the harsh and widespread reach of the recession:

Residential: Homeowners defaulted on homes and others delayed buying homes, leading to a glut of residential real estate languishing in realtors’ inventory.

Commercial: Commercial construction also was hard hit, severely impacted by the federal budget sequester and eventual-but-temporary shutdown, followed by scaled back government spending, and sharply reduced lending practices.

Institutional: Institutional construction remained stagnant, affected by the same limitations and funding problems that the commercial construction sector faced.

How Were Construction Workers Affected?

Nevada, California, Florida, and Arizona are typically areas with plenty of construction work. But the recession changed that:

Nevada employed an estimated 146,000 construction workers at the peak of its construction boom. That number was reduced by 59 percent.

Arizona’s construction employment dropped 50 percent from its pre-recession industry peak.

Florida was close on the industry-related unemployment heels of Nevada and Arizona, losing 40 percent of its construction workforce.

California fared better but still recorded a 28 percent drop.

According to the U.S. Bureau of Labor Statistics (BLS), approximately 2.3 million construction workers lost their jobs in the recession (nearly 30 percent of the total number of lost jobs).

The overall construction industry has an estimated 1.4 million fewer construction workers in 2015 than it did in 2007.

The Construction Outlook in 2015 and Beyond

Happily, the U.S. and its construction industry continue to move away from the harshest effects of the Great Recession. Industry observers expect to see these improvements:

Non-residential construction: picking up and looking more solid, especially with the expected 2.6 percent real GDP growth in 2015. This sector may rise by 8 percent with growth in office buildings, hotels, and industrial facilities.

Single family housing: expected to increase by 11 percent in the number of residential units, thanks to easier access to home mortgage loans.

Manufacturing plant construction: will probably drop about 16 percent after huge increases of 2013 and 2014.

Institutional construction: expected to continue its moderate upward trend and increase 9% over 2014 results.

Residential construction: called the potential ‘wild card’ of 2015 because of rising interest rates. Existing home sales may climb toward 10 percent.

Public construction: growth will remain low due to ongoing federal spending constraints. However, transportation spending is expected to grow by about 2.2 percent.

Ironically, construction workers may not be rushing to return to new jobs. Many left the industry altogether, retraining for other employment.

Texas and North Dakota both show significant increases in construction employment. North Dakota now needs to recruit construction workers. Texas’ construction employment is up 10 percent, nearing its pre-recession peak.

Economists don’t expect the construction industry to return to its peak level (2006) until 2022 or later. However, the BLS anticipates that the fastest-growing jobs now and 2022 will be in healthcare and construction.

Tips on How to Save on Commercial Construction Costs

Reusing the right items whether you are constructing a new office building or doing a retrofit can save you on commercial construction costs. We are all aware that construction expenses have skyrocketed the past few years and almost all contractors are looking for ways to save. This is the reason why most owners would rather go with redoing their existing office than constructing anew. The good news is you can save a lot of money if you know how to make use of whatever materials or equipments you have.

There are many business entities out there that do a lot of remodeling or revamping of their existing chain of stores. While working on their construction retrofit, they would come across items that are not useful to them anymore. What they do is to donate a large amount of these materials from their renovation to charities and write off their donations when filing for their income taxes with the IRS. This, in itself, can already save them on their commercial construction costs. Those items that are in good condition can still be used in their new commercial building.

Those items that were donated to charities like the Habitat for Humanity which is an international non-profit organization that construct affordable housing to people in need, can be sold at a lower price. Sometimes these donated items are being used by the organization itself when they are working on a construction project. Either way, anyone taking advantage of these materials will certainly save a lot on their commercial construction costs.

Here are some of the materials that you may reuse:

Existing work stations in the office, as well as, the filing cabinets, desks and chairs. You can also check if the HVAC units are still in good condition. For a minimum amount, you can get it checked to confirm their condition. You can also make use of existing electrical system and panel. Most likely, you just have to rework or keep it in top condition. Unless, of course, there are power component changes that you need to rewire and set it up all over again.

The building or office bathrooms can also be reused. You just need to check out the plumbing system to be sure that it is still in good working condition. If you are renovating a store like a restaurant or any business that has a “back of the house” area, you can certainly save on commercial construction cost by making use of existing shelves or re-grouting the existing tiles. After all, what is important is to make the “front of the house” appealing to bring in more customers. Reusing the “back of the house” area is where most contractors save in construction costs. You can also make use of existing lighting fixtures. Cleaning it up or painting it in different color palette that will complement your new construction design will help you save a lot.

There are so many other materials you can reuse for your construction. So before you even decide to throw away some old items, check if these are things you can recycle or reuse so it can save you on your commercial construction cost. Be sure to use a building contractor with expert knowledge in current building codes. If you ever decide to sell your building, or your restaurant within a building, you’ll need to get a commercial building inspector to evaluate the construction and deem it safe for future usage. So, save money on the materials, but don’t try to cut corners with the building construction itself.

Using Careful Commercial Construction Planning

Commercial construction projects, whether large or small, require careful planning and scheduling. The availability of materials and resources are influenced by many factors that must be taken into consideration. Deadlines are vitally important to many construction projects, where time means money and delayed projects result in significant fines.

In addition to careful advanced planning, commercial construction projects require flexibility as delivery dates shift and activity proceeds at an unexpected pace. Communication is essential during any planning phase and well into the project as it makes its way toward completion. In addition, commercial construction projects have enormous budgets that must be carefully monitored and adhered to. Cost overruns can result in significant losses to the company in charge of the project.

Using an effective, well designed, construction software can help keep a commercial construction business on track. It can enhance the company’s ability to oversee and evaluate the project thereby reducing costs and cutting expenses. Computer software can definitely speed the decision making process and improve communication between project managers and company management.

Cost management is crucial and employing appropriate management techniques can make the difference between bringing a project in on time and within budget and excessive costs and expenses. Estimating prior to bidding on a commercial construction project is the start of cost management even before the project is underway. If it is a project that is given to the lowest bidder, a company’s bid requires careful examination to make certain a profit can be made it the job is won.

Once under way, proper planning and careful record keeping takes over to continue to analyze the profitably of the project as it is underway. Construction managers and project managers oversee various aspects of a large commercial project for profitability as well as scheduling and materials coordination. Some managers work on only one project, others are responsible for multiple projects at once.

Another important element of any commercial construction project is safety. This is a complex aspect of commercial construction planning and thorough knowledge of laws and regulations is a necessity. Most companies have a site safety manger to keep employees and contractors informed and in compliance with these regulations. Safety violations can result in fines and injuries result in lost time, as well as, unnecessary medical and disability costs.

Careful planning of a commercial construction project will bring a project in on time and within budget. No construction company wants to work at a loss, even though on occasion it may be unavoidable. If it happens too often, the company will not survive.

Large commercial construction projects have benefited greatly from the advancements in construction technology and computer software. They have made it possible to improve the accuracy of materials and labors calculations and assist management in planning as the project proceeds. Efficient planning and appropriate adjustments made in a timely fashion throughout the project will increase profits and minimize expense and this is easier to do now than ever before.

How the Recession Has Affected the Commercial Construction Industry

For some time, I have asked myself (and others), “What was so great about The Great Recession?” This economic crisis has been deemed by the International Monetary Fund (IMF) as the worst world-wide recession since World War II. Its impact has been felt in nearly every industry imaginable, and particularly in the construction industry. It ran its course for 18 interminably long months, between 2007 and 2009; the worst period occurred at mid-year, 2009.

How did it affect the commercial construction industry and what has/will be happening nearly 5 years after the official “end” of the Great Recession?

What happened?

The construction industry is accustomed to cyclical changes but the Great Recession was hardly a typical downturn or cyclical change. No sector of the construction industry was spared from the harsh impact of the Great Recession; not residential, commercial, industrial, or heavy and civil engineering.

One aspect of the recession that is not often mentioned is that the cyclical boom of the construction industry was followed directly by the recession, leaving a large glut of residential and commercial real estate on the market.

As the recession deepened, homeowners were defaulting on their homes, others were not buying homes as they had planned, and investors were being extremely cautious in financing new construction projects.

2012 – 2013 was predicted to be a period of growth and non-residential construction activity was expected to continue its recovery. Once, again, there were recovery delays, fueled in part by government and financial institutions:

A federal budget sequester resulting in scaled back government spending.

A federal government shutdown.

Credit restrictions placed on construction projects, home loans, loans in general.

Increasing long-term interest rates based on expectation of the government reducing its stimulus program.

Those factors, and the extremely slow recovery of the world economy, certainly had a direct and negative influence on the construction industry.

Moving into 2015

So what is the state of commercial construction in 2014 and beyond? Recovery is happening, but not at an increased pace. Factors that (according to industry observers) influenced growth in 2014:

Weather-related delays on projects at the start of the year.

Ongoing sluggishness in the institutional market and lowered construction spending projections.

Financial institutions continued their restrictive lending practices.

Is there any good news? Yes! Let’s look at some of the more favorable changes in 2014 and some positive indicators going into 2015:

Some easing of lending restrictions; loans rose 4 percent in the second quarter of 2014, most of it related to the commercial real estate industry.

Commercial construction projects are rapidly increasing in several regions of the U.S., particularly in Texas (Houston) and the southern region in general, and New York (Rochester and New York City), Massachusetts (Boston), and Louisiana (New Orleans).

Consumers are “cautiously optimistic” and spending is up, as is the increase in jobs.

The commercial construction industry was, and continues to be deeply affected by the Great Recession. But industry watchers, like consumers, are cautiously optimistic (with more emphasis on cautious than optimistic) that the industry is slowly and steadily moving forward.

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