2 min read April 2023 — In an interview with Invest: John Dudas, senior vice president and division manager of Choate Construction, talked about industrial being the most in-demand asset class, the importance of investing in your staff to address labor shortages and offered some tips on how to navigate supply chain issues.
What have been some key highlights for the chamber since the last 12 months and where do you see your priorities lined up for 2023?
The biggest highlight for us is that 2022 was a record year for us, and given the pace we’re on now, we expect 2023 to be similar. The supposed impending recession has not had any tangible effect on our workload, but we will see how that develops later in the year.
We are also proud of the fact that over the last decade, we have invested in our internship programs and our Launch Point Program, which is a two-year training program for new hires, so we have a lot of quality individuals available for opportunities internally as opposed to having to go out and find new folks.
How have your projects and associated construction costs been impacted by supply chain issues?
There seems to be always a new challenge on the horizon. You don’t know what you don’t know. You think you have got one item, material, or equipment type figured out and then something else happens. There are cost escalation, lead time issues, etc., and it is like playing roulette with the inputs to each project. The supply chain is a revolving issue as the items that are getting harder to get are continually changing. For instance, a year ago it was roofing and bar joists that were taking forever and now it’s electrical gear and concrete pipe, so who knows what’s next? The biggest thing for us is to decide early on, sometimes even at the beginning of the design, which components to release so that they do not become an impact later on. So, if you have an average project of nine months and a 14-month lead time on certain items, they need to be released well before the start of the project. And to compound things, following the typical rules of supply and demand, prices have gone up, sometimes drastically, as well. The day will come when equilibrium is restored, but in the meantime, we need to be nimble, smart, and aggressive with procurement.
Which asset classes do you see a demand for the most?
We do a lot of industrial/distribution and are seeing more nice manufacturing opportunities, which I think require a higher level of skill and experience. We thrive on more technical projects, and I am glad to see a lot more manufacturing opportunities out there. There are few office projects, hospitality is doing decent, and then there are a lot of multifamily deals, but we are very selective. You know, one of the biggest surprises for me throughout COVID has been that our local and regional market has remained so strong.
Is the new construction concentrated within the Charlotte region or is more spread out?
We have six different offices in the Southeast, and they are all wide open. Our biggest limiting factor right now is finding good people. I have been in Charlotte for a little bit over 30 years, so I have seen a lot of signs go up and then come down. Charlotte has always been a growing market and you have a continuous stream of firms coming in on both the development and construction side, but very few have the staying power.
How have you seen the construction industry evolve?
We invest heavily in technology. From our site analysis to our Virtual Works and modeling department, we are constantly adding people, investing in training, and utilizing those tools all the way down to the micro-field level. For instance, you have superintendents who are over 60 and have always worked with paper, now working on their iPads and raising hell if the project models aren’t up-to-date.
What are some of your key objectives for the next three to five years?
I expect us to stay strong as we head into 2023 and beyond. We have been blessed with a lot of great opportunities, have an experienced and long-tenured team, and are steadily growing to accommodate the opportunities that come our way.. We have always invested heavily in relationships, both internally and externally, as that is the only way to sustain ourselves if there are any bumps in the road. We have aligned ourselves with very good quality clients and we are all about long-term relationships. We don’t drop things to go and chase the newest shiny object out there. Our priority is always to take care of our existing relationships, which sometimes means that we turn away as many new opportunities as we accept.
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