In late May, general contractor Keith Jones watched as subcontractors erected the steel skeleton of a new Rite-Aid at the intersection of Victory and Eagle roads just east of Meridian’s city limits.
Work all but dried up for his company, Datum Construction, and other general contractors during the recession. Datum lost money in 2012, in part because four subcontractors went bankrupt, leaving Jones holding the bag for $2.9 million.
“It knocked me on the canvas,” Jones says. “I got up and started throwing punches again in 2013. I slowly built my way back.”
Jones is not alone. Nonresidential construction revenue fell by nearly a third from 2008 to 2010 nationwide. It has recovered since, topping 2008’s record revenue last year. In the Treasure Valley, the value of commercial construction reached $363 million in 2015, double 2013’s level, according to ConstructConnect, an industry research company.
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There is no letup in 2016. Construction nationwide set monthly revenue records in January, February and March, according to U.S. Census estimates.
During the downturn, we bid jobs for at cost, or sometimes less. Margins are healthier now. There’s enough work for everybody.
Keith Jones, Datum Construction owner
Jones’ Meridian company has managed construction of dozens of pharmacies in the Treasure Valley. With a construction cost of $3 million and about 15,000 square feet of commercial space, the new Rite Aid hits Datum’s sweet spot. The company also builds medical buildings and restaurants, including a Freddy’s Frozen Custard & Steakburgers being built in Eagle.
Jones says Datum has doubled revenue each year in recent years, though he declines to disclose amounts. He has already booked more work for 2016 than last year. Contractors and subcontractors are scrambling to cover all of the work that needs doing in the Valley.
Some of the Valley’s largest contractors are seizing on the national boom to expand their footprints. Among them are Meridian’s Petra Inc., which already has offices in North Dakota and western Washington and is opening a Denver office; and Boise’s HC Co., expanding to Missoula.
Petra revenues have also doubled each year since “break-even propositions” in 2011 and 2012, says Brett Myron, executive vice president of Petra’s Idaho region. The rebounding local market has offset the recent North Dakota oil bust, Myron says. The company brought in more than $40 million in 2015 and expects to increase 2016 revenue by 50 percent, he says.
Petra, which has about 50 employees in the Valley, now has more apartment, hospitality and storage projects than before the downturn, when office and retail projects were more common, Myron says.
He sees changes in the approaches of other developers too.
“It feels different,” Myron says. “These are more thoughtful projects. Developers have thought about them for some time, picking and choosing how to put the plan in motion.”
One Meridian subcontractor, Advanced Heating and Cooling, laid off several employees during the recession. It now has 90 employees tackling heating, ventilation and air conditioning projects and would like to hire 10 or 20 more, partner Brandon Romero says.
My success is not unique. We’re seeing a lot of aggressive investors out there.
Datum Construction owner Keith Jones
Advanced Heating and Cooling works all over the Valley, but much of its steady work occurs in Boise’s Downtown: The Afton, The Inn at 500 Capitol and improvements in Idaho’s tallest buildings, the U.S. Bank building and Eighth & Main.
“We’re in about 75 percent of the work in Downtown Boise,” Romero says. “Most of our work is in five, six and seven-story buildings.”
Developers have become more confident each passing year, says Jason White, vice president of marketing for Boise’s White-Leasure Development Co., owner of the Rite Aid project.
White-Leasure has been “cautiously optimistic” as it increased its project load in the past year, White says. Other developers in the region “have been even more bullish,” he says.
“There’s definitely more going on now, but it’s not exponential,” White says. “I think we’re poised for good growth next year.”
Zach Kyle: 208-377-6464, @IDS_ZachKyle. This story appears as part of a special section on commercial construction in Business Insider’s June 15-July 19, 2016, print edition (published June 15), e-edition (subscription required) and digital-replica “flipbook” available (on June 15 and afterward) on the Business Insider page.