Following a year when a cloud of uncertainty loomed heavily over the construction market, some contractors in 2021 see the future more clearly and are eyeing more opportunities on the horizon. Coming out of 2019, many contractors saw record levels of activity, and—even if certain sectors may have peaked—2020 was shaping up to be another strong year. The general pause in development and construction activity prompted by the pandemic in the spring started to thaw by summer. Still, many markets remained nearly frozen.

“I consider 2020 the lost year,” says Dan Kaufman, East region president for JE Dunn, who says the firm’s revenue in the region was down 12% from plan. “2019 was a record year in our region, and we thought we’d be over $1 billion [in revenue] in 2020. Now we believe [reaching $1 billion] will be the case in 2021.”

Kaufman says that while many of its health care clients were quick to pause projects, they were also the first to start them back up as the full scope of the pandemic became more apparent. “People were concerned about uncertainty,” he adds. “Once they understand what the path forward looks like, they can plan around it.”

Already this year, JE Dunn has seen a surge in opportunities. In February, Kaufman says the company had $560 million in project pursuits in the region. Apartments, multi-use and student housing are among the sectors he has seen moving ahead with projects in 2021. Meanwhile, the commercial market remains sluggish, and the aviation market “could be two years or more before it fully comes back,” he says.

A year ago, a hospitality project—the Broward Convention Center—topped ENR Southeast’s Top Starts list. For this year’s ranking, no hospitality projects made the list of 40 compiled here. However, health care work ranks high on this year’s list, including the Arthur M. Blank Children’s Healthcare Hospital in Atlanta, which took the top spot.

The strength of the health care market helped buoy contractors like Robins & Morton, which focuses heavily in the sector. “Last year, we were fortunate that most of what we planned to start did start,” says Derek Gregg, vice president. “Some things still in planning got pushed to the end of the year or into this year.”

A $166-million vertical expansion at Joe DiMaggio Children’s Hospital in Hollywood, Fla., was one Robins & Morton project that moved ahead in 2020. The four-story expansion, designed by HKS, will add 27 patient beds, two cardiac hybrid operating rooms and two additional operating rooms. The project, which has a total cost of $166 million, broke ground in March and is scheduled to finish in fall 2022.

Looking toward future pursuits, Gregg says that he has seen a shift in available opportunities. While health care systems chose to shelve plans or delay projects by several years, new opportunities have popped up to help fill the void. In some cases, projects were reworked with a greater focus on preparing for future pandemic needs—such as more ICU beds, isolation rooms and flexible spaces that can be converted, as needed.

“There are quite a few projects that have come up that we weren’t chasing—they weren’t on our radar,” he adds. “Now they are, and some will start this year. [2021] will be a busy year for us.”

Some Robins & Morton projects scheduled to break ground in 2021 include Fort Mill Medical Center, which is a 100-bed hospital in Fort Mill, S.C.; Novant Health Ballantyne Medical Center, a 48-bed hospital in Charlotte; and CaroMont Health, a 78-bed hospital in Belmont, N.C.

Related Link
ENR Southeast 2020 Top Starts

Infrastructure, Solar Gains Expected

Brasfield & Gorrie also banked heavily on health care in 2020, although the company did see a diversity of opportunities, says Rob Blalock, central group president. Last summer, the company broke ground on a $400-million project for Baptist Health Care in Pensacola, Fla. Scheduled for completion in 2023, the project will include a 601,750-sq-ft, 10-story main hospital with 260 beds, a central energy plant and a 177,247-sq-ft, six-story medical office building.

Blalock says infrastructure also rebounded quickly. In the summer, the company started work on a $367-million wastewater treatment plant project for the Metropolitan Government of Nashville and Davidson County, Tenn. The 3.5-year project will improve an existing wastewater treatment plant, including upgrades to the central pumping station and the intermediate pumping station; improvements to equalization storage; construction of a new 440-mgd headworks facility; replacement of the secondary treatment aeration system; addition of a new ultraviolet disinfection system for secondary plant effluent; and addition of a new sodium hypochlorite disinfection system.

“Infrastructure and health care came back strong in the fall,” he says. “We’re as busy as we’ve ever been in those sectors.”

The federal market also remains steady, he says, and with the potential for future government stimulus, more work may be on the horizon. Data center work also continues to move ahead unabated, he says.

Although commercial sectors froze up in 2020, Blalock sees them “finally starting to thaw this year.” In the office market, he expects to see some large corporate relocation plans move ahead, although specific plans for what types of facilities may be in demand in a post-pandemic world remain in flux.

All combined, Blalock projects that Brasfield & Gorrie will rebound in 2021 with about 5% growth over 2019 revenue.

The energy sector also showed continued strength in 2020, including natural gas-fired plants and renewable energy projects. McCarthy Building Cos. sees expanded opportunities in utility-scale solar facilities in the Southeast, says Scott Canada, senior vice president of the renewable energy and storage group at McCarthy. In December, it announced the start of two solar projects in south Georgia for Silicon Ranch Group. The facilities include the 107-MW Snipesville II in Denton and the 80-MW Lancaster Solar in Arlington. The company is responsible for the design, procurement, construction and commissioning of the facilities under an EPC contract.

Canada says that many large solar projects faced time pressures related to tax credits that were set to expire this year. Although those credits were ultimately extended at the end of last year, clients are continuing to push ahead. As solar continues to make up a larger component of a grid, he says he expects demand for storage to rise as well.

“The market stayed really strong and looks to be even stronger this year,” he says.