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General Building Firms See Double-Digit Growth
Companies increase revenue through expansions, acquisitions
AECOM says its growth is due to billion-dollar projects, such as One Vanderbilt tower, in New York City.
PHOTO COURTESY AECOM
Top contractors in the general-building sectors continue to see big bumps in revenue, especially those expanding their geographic reach. AECOM tallied a jaw-dropping 54.5% increase in domestic general-building revenue last year. Dan McQuade, president of construction services at AECOM, says the company finally is seeing its construction services reach across the country.
AECOM acquired Tishman Construction in 2010, giving the company a strong foothold in New York City but limited opportunities elsewhere. The 2014 acquisition of Hunt Construction significantly expanded its territories, especially in major sports-stadium work.
“Go back three or four years ago, our business was New York-centric from the legacy Tishman business,” he says. “In 2013, 90% of our backlog was in New York. Now, it’s 50% in New York and 50% in the rest of the country.”
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AECOM is serving as construction manager on the 58-story, $1-billion One Vanderbilt tower in Manhattan. Located next to Grand Central Terminal, the mixed-use building would be the fourth-tallest building in the city when completed in 2020. Megaprojects valued at $1 billion and up are a big reason for the firm’s dramatic revenue jump.
McQuade says the company currently is involved in a dozen such projects. Last year, a joint venture of AECOM and Turner Construction was selected to build the new Los Angeles Rams stadium, estimated at almost $3 billion.
McQuade forecasts the company will not see as large a spike in general building this year, but he still expects double-digit growth in the years to come.
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DPR Construction also has seen its fortunes rise in new and expanding geographic areas. The company reported a 25.1% increase in general-building revenue last year. Mike Ford, management committee member at DPR, notes that, in addition to its core geographic markets, the company has been able to invest elsewhere. “Very intentionally, we’ve had a strategy to develop strength in the other regions,” he says.
The Southeast and Texas markets have been particularly strong in recent years. DPR continues to build off its 2013 acquisition of Atlanta-based Hardin Construction, which had a strong presence in both regions.
“Generally, we try to go in where we’ve got a customer that we’re counting on to get us some work,” Ford says. “Most teams also want to see if they can grow and become successful organically and be part of the community. It’s a bit of planting seeds.”
Financial services firms have helped to bolster those efforts. The company is building 550,000 sq ft of office space at a new regional campus, near Dallas, for Charles Schwab. DPR recently built a campus for the company in Austin, as well.
Further, Kansas City-based JE Dunn has seen big increases in the Southeast. The company has used a mix of organic growth and acquisitions, including opening a new office in Tampa in 2015 and acquiring Savannah-based Rives E. Worrell Co. in 2011. Last year, the company saw general-building revenues increase by 28% in the region.
