The fact that some markets have softened does not mean that all firms in a particular market have faltered. "We've been working on increasing our market share," says Peter J. Davoren, CEO of Turner Construction. "We saw many stalled starts last year, so we tried to concentrate on projects most likely to get the go-ahead." But many of those stalled projects now are beginning to proceed, giving new life to the general building market, he says.

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For most contractors in the commercial office market, work is sparse. "The office markets are still not strong, particularly in suburban areas," says Duke's Kennedy. "The vacancy rates are simply too high." But some contractors are hopeful. "I don't see the market coming back to what happened in the mid-1990s. What we're seeing is a reasonable comeback with reasonable fees," says Robert Hunt, CEO of Hunt Construction Corp.

Some of the lag in commercial building is regional or local in nature, driven by a variety of factors, including vacancy rates, economic uncertainty and terrorism concerns. "The Southeast and Southwest are strong not just in multi-unit residential, but in mixed-use commercial," says John Fish, president and CEO of Suffolk Construction. But the Northeast is a different story. "The planes from 9/11 came from Boston and hit in New York. I think that has left a greater sensitivity about terrorism in that corridor than in other regions, blunting some investment," he says.

But there are some subtle market shifts. "The developer market is definitely off," says Kennedy. "But with interest rates continuing to be low, corporate clients are more willing to build to own." He says many large corporations would prefer to keep real estate off the books, but mid-sized corporations increasingly are looking into build-to-suit.

NEW VIEW Hospitals now are being measured by the number of procedures performed. (Photo courtesy of Kaser Permanente Santa Clara Medical Center)

The hospital market continues to be one of the most active of all the general building markets. But there are a few changes going on in the market. "Many of the nation's hospitals need to be replaced," says Davoren. "But building replacement bed towers for acute-care hospitals is short-sighted." He says that surgical patient turnover is becoming so quick that hospitals no longer are measured by the number of beds they have but how many procedures they perform.

Turner is benefiting from another change in hospital construction. "We've never heavily pursued work in the for-profit hospital market," which has been dominated by regional contractors, Davoren says. "But we are seeing major for-profit, health-care companies looking to quality national contractors, and we are doing more work for them now."

The market for distribution centers continues apace, but there are changes in that market, as well. "Distribution centers have been getting bigger," says Kennedy. "We used to build with 18 to 24-ft clearances." But with new, advanced materials handling systems, clearances are up to an average 32 to 36 ft, he says. But smaller centers may be on the horizon. "With new rules about trucks and limitations on how long drivers can stay behind the wheel, we may see a shift from large national distribution to smaller regional centers," he says.

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Multi-unit residential has been a big source of work for contractors in the general building market. "We're seeing a lot more high-rise apartment buildings, especially in the cities, to beat a rise in interest rates," says Patrick Kinsella, director of business development for The Walsh Group. "We've been fortunate to have 2,500 to 3,000 units under construction," says Fish of Suffolk.

"Residential in Colorado, Arizona and Nevada is particularly active," says Davoren. "We are actively pursuing an 800-unit project in Las Vegas at the moment." He also says the condo market in Southern Florida remains strong. "There seems to be a lot of growth in multi-unit residential, both in condos and apartment buildings. This is particularly true in the South, but there appears to be quite a bit of work in the Midwest, too," adds Richard J. Haller, president and CEO, Walbridge Aldinger.

But not every area has sustained the boom. "Chicago was so hot in the condo market that everyone became a developer," says Kinsella. "But now, a lot of those...

...in 2003 for its offshore, pipeline and liquefied natural gas experience. "In the past, when a refinery project came up, the first thing we would look at were the tank and vessel portion. Now we have the experience and capability to look at the project as a whole," Glenn says.The biggest challenge in CB&I's expansion is to make sure an acquisition makes sense. "We have no debt and are still looking for acquisitions," Glenn says. "But we aren't looking for bolt-ons or fixer-uppers. We are looking for top performers in our markets that can easily be integrated into our system."