ENR MidAtlantic Top Specialty Contractor Increase Revenue
Specialty contractors posted improved revenue last year, but firms are wary as local markets adjust to a Trump administration
Data centers such as the CyrusOne campus in northern Virginia are driving the ENR MidAtlantic market forward.
PHOTO COURTESY OF ROSENDIN ELECTRIC
Although the nation’s economy continues to expand moderately, many economists caution that another recession could be two to three years away. ENR MidAtlantic’s construction industry typically counts on federal projects to stimulate the market, but Donald J. Trump’s election has added uncertainty into that equation. “I’m not sure the incoming administration is just going to build buildings for the hell of it,” says Tom Heinold, CEO of Pioneer Cladding & Glazing Systems LLC, whose regional office is in Elkridge, Md. “They might improve roads and infrastructure … but I’m not so sure how he’s going to swing as far as [buildings] go.”
Nevertheless, Heinold says his business plan is based more on models that are predicting growth into 2018. “I’m not going to run scared and shrink the business because of it,” he says. Pioneer is the No. 10-ranked firm in ENR MidAtlantic’s 2016 Top Specialty Contractors survey; the firm posted revenue of $47.81 million in 2015.
The 18 firms on this year’s list reported a combined $2.4 billion in regional revenue. Ten firms that submitted revenue data for 2014 and 2015 posted a combined increase of nearly $133 million in regional revenue in 2015. The MidAtlantic region includes Delaware, Maryland, Pennsylvania, Virginia, West Virginia and the District of Columbia.
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View ENR Mid-Atlantic's 2016 Top Specialty Contractor Chart |
Electric-powered growth
Eight companies listed electrical work as one of their largest 2015 revenue producers. EMCOR Group Inc.—the survey’s overall top-ranked firm with $908.21 million in speciality revenue—also recorded the most electrical contracting revenue, $158.08 million. All of fourth-ranked Hatzel & Buehler Inc.’s $119 million in revenue came from electrical work and was up from $104.13 million the previous year.
Fifth-ranked Rosendin Electric saw a dramatic increase in regional revenue to $109.3 million from $67.44 million. The San Jose Calif.-based electrical contractor has offices in Sterling, Va., and Baltimore. Brian Brobst, Rosendin’s director of Eastern region business development, says the firm’s growth profile for 2016 is 50% better than it was in 2015. He adds, “We have some pretty healthy growth models that we are trying to achieve” in the next five years.
Brobst says that one sector propelling that increase is data centers. “You would think that what was built last year could never be duplicated, but our projections already exceed what was built last year in this market for next year,” he says.
Rosendin was the electrical contractor for two buildings at CyrusOne’s Sterling, Va., data center campus, known as Project Goliath. The 220,000-sq-ft project was built in 26 weeks, the fastest construction for an enterprise-scale data center its size, according to Rosendin.
Brobst says federal spending is at one of its lowest points in a decade as budgets are trimmed and the 2009 federal economic-stimulus programs have ended or are wrapping up. On the other hand, Heinold says defense contractors could build new facilities in the region if Pentagon spending gets a boost. But if the Trump administration downsizes the government, there would be less demand for federal office space.
Renovations still rising
Renovations and restorations of existing office space continue to grow in the Washington, D.C., market because the amount of land on which to build is limited. Pioneer, which is based in Cincinnati, recently installed a unitized curtain wall featuring oversized glass for a 234,576-sq-ft commercial redevelopment at 2000 K Street.
The steady renovations market could offset a rumored slowdown in new office buildings, according to Heinold. Still, biotechnology, health care and residential sectors are predicted to do well in the future, and the MidAtlantic regional market is diversified enough to weather a forecasted recession, says Brobst. “When one market tails down, another market goes up,” he points out. “We have the luxury of having a lot of diverse revenue-generating markets.”
