Contractors Look Inside for Work

Interior retrofits could be one of the first markets to rebound for construction companies, but clients will likely look to designers and contractors to help them do more with less.

"On the retail side, big box chains - like Lowe's, WalMart, and Home Depot - are trying out smaller format stores in vacated spaces," said Associated General Contractors' Chief Economist Ken Simonson.

"On the hotel side, there have been a lot of reports of opportunistic investors buying up distressed properties, which they will want to remodel to bring up to standards," he said.
And on the office side, "government at all levels - local, state, and federal - is giving up leased space and that space will need remodeling to suit private sector tenants," he said.

"When the recovery comes, I think it will be in the renovation market, but I'm not sure it is here yet," Simonson said. He looked for some improvement in hospital and hotel renovations to show up by late 2011.

Bev Garnant, executive secretary of the Flooring Industry Council, thinks the rebound might have started. "We have felt modest but continual growth over last 6 months. Requests for samples and estimates are way up. It leads me to believe that the pent up demand of the last few years is starting to come through," she said.
Retail

Pinnacle Contracting saw a 70 percent increase in business last year after profitable but down 2009, largely on the strength of office interiors and retail renovations. The volume of work is continuing to hold up in 2011, said CEO Thomas McLaughlin.

Pace Properties, for example, retained Pinnacle to renovate and upgrade the exterior of a 28,500-square-foot structure - a former Circuit City store - at 6910 S. Lindberg Boulevard for use by national retailer JoAnn Fabric & Craft Stores. That retail organization, which has more than 750 stores, then bid the interior work and selected Pinnacle. Together, the two projects included replacing and improving the customer entrance, the fire safety system and the roof, and a complete new interior with new flooring, new plumbing, a new electrical system, an energy management system and an HVAC system. The architects were Aedis Inc. and Design-Forum Architects, Inc.

Pace Properties also retained Pinnacle for the complete interior renovation of 12,900 square feet of retail space for retailer Tuesday Morning at Central Plaza on Manchester Road in Ballwin. The renovation included new flooring, walls, doors, plumbing, and HVAC and electrical systems. The architect was Aedis Inc. and the mechanical engineer was G
& W Engineering.

"We're hearing that the cost to redo an existing building is a lot less than the cost of building a new building. There is enough empty space out there that people can get more for their money. We won't see new until that is used up," McLaughlin said.

ISC Contracting won several mid-year school and health facility contracts, but President Dan Green said he sees little change in the private office market.
"There always are some tenants trading up and some trading down, but I'm not seeing any more of that now than in the past couple of years. I'm not seeing any pent up demand being released," he said.

Other trends reported included a downsizing of the average size of individual cubicles or office and a move to collaborative spaces, where workers have no permanently assigned office and "huddle" rooms are used for meetings and group work sessions.

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