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Projects are in the pipeline, industry professionals say

Daily Journal of Commerce

February 25th 2014

Bright days await the Portland-metro construction industry because many projects are in the pipeline, according to speakers and others who attended an annual summit held Friday by Associated Builders and Contractors' Pacific Northwest chapter.

However, speakers advised builders to prepare for challenges associated with an industry emerging from the doldrums.

Portland-based CIDA Inc. has seen its workload increase in market sectors such as office and industrial, according to the company's president, Jennifer Beattie.

"Everyone is moving," she said. "The challenge is coming out of an area where architects weren't busy to a time when there is lots of work."

CIDA's supply of jobs has increased from one to two months out to four to eight months, Beattie said. After many architects left the industry in the recession, firms are struggling to find qualified and experienced architects, she said.

Owners have become more cautious, asking firms to sign nondisclosure agreements that last through much of the design process, Beattie added.

Jeff Myhre, president of Myhre Group Architects, also spoke to builders at Friday's ABC luncheon. His firm has recorded 25 percent to 30 percent growth each year since 2010, he said. Most of that has been in hospitality, senior and assisted living, urban mixed-use and multifamily housing projects, he added.

Despite the increased work, city regulations have made it tougher for projects to become shovel-ready, Myhre said.

"We are seeing a delay in all aspects of development," he said. "Many mixed-use projects have to go through a laborious process."

Myhre advised contractors to not lowball bids.

"They should have confidence that (opportunities are) coming, but being too confident (on a low bid) will cause them to lose the project," he said.

With all the projected work, builders should prepare themselves, said Jina Bjelland, the Portland Development Commission's director of real estate and lending.

"Make sure your sub base is solid so that they're there when the work picks up," she said. "Don't take on more work than you can handle."

Bjelland also advised contractors to study commodities markets carefully because prices of materials could change during slow-developing projects.

Meanwhile, "there's a boom coming" for multifamily renovations, according to Max Baertlein, an administrator with Tigard-based Grow Construction. Metro-area apartment building owners are increasingly responding to an increase in competition by upgrading their properties, he said.

"It's already begun," he said. "Existing buildings have to keep up. They say, 'Hey, we've got to get a new roof. We can't have any vacancies.' "

Building industry officials welcomed the news of more projects in the pipeline, but they're being cautious in the wake of the recession, said Laurie Kendall, ABC's president.

"Members are getting busier, but they're still scared that is going to happen again," she said.

Like children born during the Great Depression, those who survived the Great Recession will take a more austere approach in the months ahead, Kendall said.

"Seeing architects hiring is positive news," she said. "If they're busy, we know it's coming to us."