Facing fierce industry competition, Boston-based construction management firm Suffolk announced a diversification and rebranding effort to expand services beyond construction into startup funding and academic research and development.
“Finding new ways to add value for clients, especially in this era of great disruption, is absolutely critical to survival in this industry,” John Fish, Suffolk chairman and CEO, said Feb. 3.
The privately-held firm said the “diversification strategy focused on leveraging its core competency of construction and expanding into additional service lines to create a fully-integrated platform.”
Suffolk ranks at No. 23 on ENR’s list of The Top 400 Contractors, reporting $3.4 billion in 2018 revenue, 100% in the building sector and 98% for private clients. The firm is listed at No. 11 among the ranking’s Top 50 buildings sector companies.
New capabilities will include early-stage investing, design, materials purchasing, risk management, and self-perform construction services, said the firm.
Suffolk Capital, the firm’s real estate funding entity that co-invests with developers, “will also strategically invest in technology startup companies and entrepreneurial ventures to help ... drive the pace of change in the industry,” the firm said in the announcement.
Unlike Gilbane Building Co., Skanska and other large construction firms that have their own development arms, “the role of Suffolk Capital is to partner with developers and provide funding for projects, not to actually develop them,” says Dan Antonellis, a Suffolk spokesperson.
As part of its new strategy, Suffolk plans to build “The Garage,” an incubator with up to 30,000 sq ft for academic partnerships, startups, co-working spaces and industry-related research and experimentation adjacent to the firm’s Boston headquarters. The firm says this will allow for in-house product development and industry problem solving. The incubator’s design will be complete by April, Antonellis says, and construction is set to finish in the fall.
Boris Groysberg, an advisor to Suffolk and a professor of business administration at Harvard Business School, noted in the Feb. 3 statement Suffolk’s effort to “remain relevant in a constantly changing world.”