Westchester construction consultant navigates hot and frigid markets
By Golden, John | |
Proquest LLC |
It's a hot construction market that has
With more than 40 employees hired in the last six months - some of whom were laid off at IVI in the frigid construction market of the Great Recession - the company has leased an additional 5,000 square feet of space in the nearby
"We need one 20,000-square-foot floor," said
This latest growth spurt has been driven by a resurgence in construction that began 2 to 2 1/2 years ago, said
Since
In
Barone said IVI is also consulting on the Hudson Yards platform construction that began this year on the city's
While
"They're taking off so fast that the resources cannot meet the demand," he said. "The ramp-up has been so quick that every design and construction firm out there is having trouble in meeting the needs."
With demand outpacing available resources, construction costs are rising - by about 5 percent, Barone said. "We're seeing construction costs in excess of
With rising costs, more developers in
Developers are also less likely to negotiate project labor agreements with building trades unions in the more active market, Barone noted. "The trend is getting away from PLAs because unions are not willing to make the concessions they were willing to make before," he said. For a developer, "Getting a PLA now is not as beneficial as it was three or four years ago."
Barone said IVI's construction risk management business peaked in the industry's boom years of 2003 through 2007. But the company saw business drop off in the credit crisis and Great Recession that followed that development boom.
"We went from 195 people to 80 people,"
"The nice thing is, we were able to bring most of them back," said
"We've seen a lot of cycles" in real estate development and financing, said
"With the diversity of services here, when one thing goes down, something else picks up,"
"Even in the depths of the recession, there were gaming projects being built," Barone said. "We've done a significant amount of gaming around the country," including
"We're growing,"
Having consulted on several thousand projects nationwide in IVI's 41-year history, "We get a sense when the markets are overheated,"
"If we're not at the top, we're pretty close to the top" of that market, he said.
"It's not slowing down," Barone said. "The rate of work coming in on construction - we've had two years where we're plus 30, 35 percent."
"It's surprised our clients too," Barone said. "Nobody saw this coming. Everybody just wants to be a part of it." Most of IVI's banking clients have increased their lending goals for this year from 2013, he said.
Where is the industry headed?
"The jury's out," Barone said. "It feels like things are too heady. ... It's not clear how long this is going to continue. There are many dynamics that are going to affect it."
"Things are going fantastic," said
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