By Max Crampton-Thomas
2 min read August 2019 — The amount of construction in a region is almost always an effective gauge of how the local economy is doing. Broward County is among those regions that has become synonymous with an abundance of ongoing and future construction projects, which speaks volumes to its strong and growing economy. Invest: Greater Fort Lauderdale recently spoke with Andrew Verzura, Principal of VCM Builders, Inc, one of the construction companies benefiting from the strong market in Broward County. Verzura discussed trends in the market, how Broward County compares to other markets and what the future of the construction industry in Broward County may look like.
What trends are emerging in the renovation projects VCM is working on?
In construction, we have to constantly regroup because the market changes. In recent years, our company decided to focus on renovations. Some of the trends we are seeing call for cleaner designs because people want to get away from heavy woods and marble, which don’t hold up well. We are seeing more porcelain, lighter colors, fewer moldings and more technology-based demands. Most of these condo buildings that were built 15 years ago did not have the technology we have today, so I’m challenged in every condo building with elevator integration, security integration and package rooms. Millennials want the ability to run almost everything off their phones, and we have to try and meet that demand.
How does Broward County compare with the other markets you work in?
The difference with Broward County is that it’s a very small, close-knit community. You can meet the commissioners, public officials or the building official and they all remember you. They are extremely friendly to do business with because they have a set of rules and regulations they follow. Whenever we have issues, I can go speak with somebody. I would say that over the last 15 years, I’ve been able to work with the city to solve 95% of the problems we’ve had. People are coming here because the business environment is so friendly.
How have rising construction costs affected your business?
Construction costs are very expensive, and they have not gone down. Compared to when we started building spec houses in 2013 to where we are now, construction costs are up 30%. Construction costs are deal breakers for a lot of projects that we are looking at because they just do not make financial sense. The banks are not going to finance projects when the numbers do not make sense and will not work. We have seen many of the large rental communities being funded by pension funds. Most of these projects, which are primarily funded by pension and real estate funds, have been looking for a 6% return.
How does the next year look for the construction industry in Broward County?
My outlook for Broward is still very strong. There is competition but that is a good thing. I believe we will still see people buy properties here. We have a friendly environment for developing and a government that is pro development. As long as we have builders and developers continuing to focus on sensible building, then we should be in good shape for the next year. We have to be very careful and look at deals that make sense because there are a lot of inflated deals out there right now. People all think their property is worth so much money but in reality it is only worth as much as people are willing to pay for it. The market is leveling off, which is not a bad thing, and it will be interesting to see how the market accepts all the new rental buildings in downtown.
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