Writer: Max Crampton-Thomas
2 min read August 2021 — Brasfield & Gorrie is one of the largest privately held construction firms in the country, providing general contracting, design-build and construction management services. In an interview with Invest:, Regional President Keith Johnson discussed the Atlanta market, the current state of the construction industry and his outlook for the future.
What differentiates Brasfield & Gorrie from other construction companies?
The biggest differentiator for us is our culture. We really try to make this more than work. We aim for a family atmosphere, where you have good friends at work, enjoy the people you work with and enjoy what you do day in and day out. We’re focused on long-term relationship building and creating a difference over time. We’re trying to make an impact versus just building.
What makes Atlanta a great market to be in?
We view Atlanta as the capital of the South; it’s the hub of the Southeast. Atlanta has a diverse workforce and a diverse economy. Certainly, the robust airport here creates a lot of opportunities for business. Our renowned university system also creates great opportunities. Atlanta is coming on the scene as a national city. There was a long time where Atlanta wasn’t in the same conversation as Miami, LA or New York, and I believe we are now already in that conversation or about to be in it because of the diversity and opportunities we have across the city. We have businesses moving here from the West Coast and the Northeast due to the cost of living, lower taxes, great property values and weather. There are a lot of advantages to being located in the Southeast versus other parts of the country.
What is the state of construction activity?
When the pandemic hit, there were a lot of pause buttons being pressed on projects. For the most part, these were projects in preconstruction. Most of the jobs that we had under construction continued ahead just a couple of weeks after we understood the new rules and regulations. We’re as busy as we’ve ever been in both preconstruction and construction, equal to or greater than 2019 levels. For us, the pandemic was more of a pause than it was a huge slowdown or massive dip.
What sustainability initiatives have become more affordable?
For the longest time, there was a premium paid to become LEED-certified. Now, it’s just part of the job. The premiums have become absorbed by the normal costs of projects. If you go to the upper levels of sustainability there are still premiums involved but the normal LEED-certified building is not very difficult to accommodate in normal budgeting. We’re starting to see different projects that are interested in net-zero carbon footprint initiatives but I think that will take a while to gain traction due to the expense of it and quite frankly the difficulty in achieving that.
What are the main challenges you’re facing now?
The labor challenge existed pre-pandemic and is still here. The biggest one currently though is material price escalation and availability. It’s unlike anything we’ve seen before. This isn’t normal price escalation or normal product demand. It’s very erratic and unforeseeable. It’s lumber one day, paint the next and appliances the day after that.
This is absolutely having an effect on the costs of projects. There are some deals that won’t happen because of these issues. During the height of the lumber price run-up, lots of residential projects were stopped in their tracks. The lack of product availability hasn’t necessarily stopped any projects from starting but it has caused some scheduling issues that we’re having to manage very closely. It can force us to choose different products, suppliers or simply delay our schedules. Suppliers and subcontractors can’t guarantee us anything.
What is your outlook for the Atlanta construction industry?
The outlook is really good. We certainly have the challenges of escalating material prices and availability but there is a whole lot of work out there being planned and discussed. We continue to see a lot of mixed-use type projects, not only in urban areas but suburban areas. Pre-pandemic, everyone was moving into town and post-pandemic, there is a lot of talk of everyone moving out of town. Whether this trend holds or not, who knows, but I think the interest of having the “live, work, play” focus is still very strong. A lot of the projects we’re looking at in Atlanta are in that lane, with mixed-use projects combining office, residential, hospitality and retail into the footprint of one project.
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