November 16, 2009
Guest blog post by Scott Stafford
Recently I drove the length of Peachtree Street in Atlanta and for a man who makes a living in commercial construction, it was a discouraging sight. Peachtree Street, for those unfamiliar with the area, is home to 50 percent of all jobs in the City of Atlanta, 36 percent of the city’s retail space, 24 percent of the office space, and more than $10 billion of appraised value for taxable properties (according to the Peachtree Corridor Task Force). In other words, Peachtree is arguably the economic spine of Georgia. In the pre-recession heyday of a few years ago, there were seemingly dozens of tower cranes to be seen along Peachtree Street, but today there are just six. Five of those sit idle at the long dormant Streets of Buckhead development and one is scheduled to come down from one of our current projects (1075 Peachtree) very soon.
Atlanta, like many other cities in America, is currently overbuilt. Recent reports indicate that the metro Atlanta office market has 24 million square feet of vacant office space, hotel occupancy is expected to average 54% this year, and there is currently a four-year inventory of unsold condominiums in the in-town area. It will surely take years to absorb all of the excess space here. In the meantime, many men and women in Atlanta who earn a living in construction are hurting. Some 28,000 Atlanta construction jobs have been lost since September 2008, according to The Associated General Contractors of America.
So where do we go from here as a subcontractor that has had a good measure of success chasing Atlanta’s office, hotel, and condo building boom? Well, as one of my colleagues referenced the other day, “we have to find the cheese.” His quote is from a best-selling business book many of us have read by Spencer Johnson, M.D. In Who Moved My Cheese?, Johnson tells the parable of four characters who live in a “Maze” and look for “Cheese” to make them happy. The four characters, two “Littlepeople” and two mice, face unexpected change and deal with it in very different ways. Ultimately, one of them deals with it successfully and shares his experience with the others.
Cheese can be a metaphor for many things we seek in life and in this case it’s new construction projects. Despite the seemingly endless economic doom and gloom that pervades our 24/7 news cycle, we have been blessed with a good backlog of work as we enter the home stretch of 2009 and are feeling cautiously optimistic. Bidding has been more difficult than ever, but by expanding our product offering with items such as Trespa® wall panels, re-entering geographic markets we had previously abandoned, creating an online wall cladding products store with www.rapidmaterials.com, and pursuing educational and healthcare projects above all else, we are doing relatively well. We have also used this opportunity to “career counsel” some folks who were not thriving in our company and seek recently available talent from elsewhere. When the economy does eventually turn around, we want to be poised to pounce on opportunities with the strongest team we can assemble.
Our company certainly does not have all the answers and like everyone, we lose more projects than we win, but we have elected to do our best not to participate in the recession. The future is potentially very frightening though. Some forecasts show a projected 15% decline in commercial construction for 2010. That’s a sobering figure, but there is cheese out there for those who look hard enough for it. I hope that my hometown of Atlanta someday experiences another building boom and that some of the proposed developments eventually come to fruition, but for now, our cheese is elsewhere and we intend to find it.