Shopping Centers Today

MAY 2012

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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defunct or shrinking competitors," said Kenneth Simonson, chief economist for Associated General Contractors. "It's not new construction for the most part." Unemployment in the construc- tion industry, however, is still far higher than the general jobless rate nationally, though improving, having dropped from a staggering 27.1 percent in Feb- ruary 2010 to 17.1 percent in February 2012, according to Simonson. Atlanta-based Fulcrum Construc- tion, which counts Dick's Sporting Goods, HHGregg, Stein Mart and Walgreens among its clients, says some 80 percent of its business last year was rehab work, which Mike Arasin, Ful- crum's president, says he believes will continue to gather steam this year and next. "Right now, it's all about the customer experience and differenti- ating that experience from the vast number of shopping outlets," Arasin said. There has also been strength in the value retail and discount segments and such specialty categories as men's clothing and accessories, and family lifestyle retailers, he says. "Even if con- sumers can't afford a vacation, they can buy hiking boots and hit the trails or purchase an accessory to dress up last year's suit," he said. For those general contractors that are not fully retail-centered, staff levels have risen faster, as the restaurant, reli- gious and public sectors have been more buoyant than retail, says Jay Dorsey, president of Pearland, Texas–based Triad Retail Construction. Triad, once almost exclusively a retail contractor, foresaw the downturn and diversified. The firm's practice is now 25 percent re- tail, 20 percent restaurants, 15 percent hospitality, 15 percent light commercial, 10 percent offices, 10 percent religious and 5 percent other work. "In fact, our growth rate since 2008 has been in ex- cess of 50 percent year on year," he said. A construction outlook survey by Associated General Contractors found 152 SCT / MAY 2012 that 32 percent of commercial contract- ing firms plan to hire this year, versus only 9 percent that are planning layoffs. In last year's survey 34 percent said they were planning to hire, while 37 percent were planning layoffs. Staffing levels are growing again not only at retail con- tracting firms but also in the construc- tion departments of retail companies, according to Steve Bachman, president of Lake Elmo, Minn.–based Retail Con- struction Services. Except for a handful Some of the busiest retail contrac- tors now are those with a background in high-performance and sustainable- construction practices, says construction consultant Brian Hill, of San Diego. Enactment of the CALGreen building code in California last year, which set state mandates for energy and water use and treatment of construction waste, forces the issue, Hill says. "Even if consumers can't afford a vacation, they can buy hiking boots and hit the trails or purchase an accessory to dress up last year's suit." of new outlet centers and some stand- alone projects, retail contracting will continue to center largely on redevelop- ment, Bachman says. "Many centers are rebranding or remerchandising their centers to accommodate newer retailers and health care tenants," he said. Fulcrum Construction kept its focus on retail construction during the down- turn, which allowed the firm to emerge as a stronger partner for retailers, Arasin says. "We didn't waver in our commit- ment to the retail market, but we know there were many contractors who found it necessary to branch out for survival," he said. Fulcrum has hired field and project-management staff in response to increased retail construction spending. "I also think the construction firms that are adding positions are doing so in a re- sponsible way that keeps their organiza- tions lean," Arasin said. Retailers are pursuing a greater va- riety of sustainable building practices, particularly in those areas that have an impact on operating costs, says Hill. He points to an Albertsons in the town of Clairemont, near San Diego, which uses an on-site natural-gas fuel cell capable of generating 100 percent of the store's electricity. Whole Foods has equipped several of its California stores with a similar system. San Diego Gas & Electric is trans- forming a department store into a cen- ter for demonstrating energy-saving practices. This center, which is vying for a LEED designation, displays solar pan- els, reflective roofing, rainwater collec- tion and even a model kitchen that pro- motes sustainable restaurant methods. In general, green-building practices and LEED designations appeal to con- tractors and retailers either because the company culture has changed or be- cause the company wants to enhance its image, says Bachman. More retailers and project managers are employing the most practical green-building principles, regardless whether they are also seeking LEED certification, says Arasin. But Ful- crum has hired two LEED-certified proj- ect managers who routinely implement these practices, he says. Retail contractors and design profes- sionals still face challenges though, says Hill. Some are approaching previous clients and offering to perform feasibil- ity studies and cost-benefit analyses to upgrade existing spaces, he says. "Some have seen steady work in health care, which seems to be in an interminable

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