2 min read August 2023 — Rex Kirby, president of Verdex Construction, sat down for an interview with Invest: to talk about opportunities in the industry, key projects, adjusting the preconstruction process and the importance of collaboration in building client relationships. “Collaboration is a word that is very important to our clients,” he said.
What is your analysis of the state of the construction industry?
Right now, the market is a little challenging. So many factors have contributed to the overall cost of developing a project. Land costs are very high and that’s if you can find the right pieces of property. And we may get more interest rate increases from the Federal Reserve this year. Also, construction prices went up substantially over the last year. Currently, there is some escalation but it is offset by products that have leveled off or gone down. That has stabilized our prices at the current level and we are at least able to give a price that we can hold for a reasonable period of time. Property taxes have also doubled. As a result of all of this, some developers are slowing their development plans and waiting to see if the market is going to tighten. Although the dynamic in the market has shifted, we’re still getting continued opportunities for projects, especially in the Tampa/Sarasota area and South Florida/Treasure Coast. .
What is it that draws clients to work with Verdex?
From day one, we’ve focused on how we can help clients make their projects work. We don’t want to rubber stamp a project. We come up with out-of-the-box ideas on how we can get their budgets in line. We’ll analyze projects for efficiency and ratios and then share our ideas with the owners. We show them how to increase their efficiency 3% to 5%, which makes their numbers work better on cost per unit or cost per leasable foot. We’re not just letting things happen. We’re very proactive about how we approach these projects and in finding creative alternatives to help the project move forward.
What are some of the key projects that have meant the most to the growth of the company?
A tremendous amount of our growth has been on the West Coast of Florida because it has been a new market for us in the past few years. Much of the growth has been multifamily housing from Sarasota to Tampa and everywhere in between. In the Tampa market, we won our first student housing project which is private sector student housing across from the University of Tampa with 150 units (about 550 student beds). We’ve since received other opportunities to build student housing. It’s a new growing sector for us.
On the East Coast of Florida, we started a project called The Adderly in Fort Lauderdale, which is a $95 million apartment project. At the time we booked The Adderly, it was the biggest project we had won as a company. I’m proud of the fact that we’re getting into these bigger projects and the owners are selecting us over our competition. We’re also finishing up a 13-story Aloft hotel in Fort Lauderdale and landed a 14-story Courtyard Marriott in Hollywood, so we’re seeing more activity on the hospitality front too.
In Downtown West Palm, we just finished a project called The Watermark at West Palm Beach. It’s an 8-story senior living facility with Independent living, Assisted Living and Memory Care with incredibly high-end amenities. It includes two full kitchens, four separate dining areas, a Bar, hair salon, doctor’s office, and physical fitness workout/physical therapy area. It’s a showpiece project for Watermark Retirement Communities. We’re also well into a multi-family apartment project called Tortoise One for Tortoise Properties which will wrap up in early 2024.
We’ve grown our team in Gainesville with more local and seasoned operational people. We have multiple opportunities in the private sector, and we are also completing a dining project for the University of Florida. Because of our success, we were chosen as a top contractor for their multi-year continuing work program, which is building UF projects under $4 million. We’re really starting to grow in that market.
How has the process of preconstruction changed for Verdex?
With projects getting bigger and more complex, we have grown our preconstruction group. Additionally, we are plugging in our operations teams earlier to work with our preconstruction group to make sure we are driving the job from the operational side prior to construction. When you get into the bigger jobs with tighter sites, you have to figure out logistics, material storage or offload areas, with thoughts such as how many cranes are needed and where the cranes should be placed. We plug in the operations team to plan the project and how we are going to build it the most efficient way. It’s looking at time versus money. You can pay extra for a second crane but if you’re pulling two or three months out of the schedule, it may pay for itself. It gets the owner into the building earlier and they can start making money.
What is the importance of building strong client relationships?
Collaboration is a word that is very important to our clients. We listen and work with them to solve their problems. The market has calmed down a bit but there was a time when we couldn’t give a price and hold it. The approach we took was to be very transparent and open book with our clients. They could sit in our meetings with our trade partners and help us cut the deals, for example. We want to get to the number together and agree to a reasonable contingency to get us to the end of the day. It lets the client know they got the best deal the market had to offer.
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