New construction and development industry emerges - real estate development and construction industries - Annual Review and Forecast

Economic outlooks for 1996 predict a growth year for the real estate development and construction industries.

According to a recently published construction outlook analysis by The McGraw Hill companies, the construction industry is entering a mature stage of expansion. In contrast to the 8-9 percent growth rate reported between 1992-1994, 1995's flat construction cycle may be predictive of a more mature phase of expansion characterized by a longer construction cycle that is more sustainable. Resultingly, 1996 projections for development and construction are optimistic, as new opportunities for redevelopment of infrastructure in aging properties and new core and shell construction to replace non-functional sites continue to unfold. In addition, new programs such as the Industrial and Commercial Incentive Program and the Lower Manhattan Revitalization Plan will spur construction in the City.

Our current economic recovery is only partly responsible for growth in the construction industry. Customer satisfaction is fast becoming the driving force in determining the scope and quality of services delivered in the development and construction marketplace. The customer's request for value-added engineering and expanded pre-construction services is transforming the city's construction industry and creating a new category of construction professional who must serve as a sole source to provide a broader range of integrated services only previously available from multiple contractors and consultants.

At Plaza Construction Corporation, the independent construction subsidiary of Fisher Brothers, one of the country's leading builder-developers, our primary objective has always been to ensure the satisfaction of our parent. Over the last decade, Plaza has aggressively re-directed away from solely serving its parent's construction needs and has successfully entered the fee construction market. Over the last two years alone, the firm has been awarded assignments for the construction of over $200 million of interior installations, as well as comprehensive infrastructure upgrades of several signature properties.

Plaza has evolved into more than just a conventional construction organization. The foundation of Fisher Brothers' developer-builder history has had a profound effect on the way in which we respond to our client's projects. We implement an integrated approach that provides added value in our construction strategy and delivers expanded services during the pre-construction phase, as well as throughout all phases of a project. Specifically, the way in which we respond to our clients translates into several important initiatives that have served to differentiate us from our competitors.

First, we participate in a construction project actively during the pre-construction phase, Many of our clients meet with us during the site identification and site selection phase, consulting with us to determine construction feasibility even before a site is leased or acquired.

Second, our construction strategy is shaped on the basis of the best way to develop and build a site or installation. It involves extensive discussion with the owner to determine answers to use and occupancy questions usually outside of the realm of the traditional general contractor. Drawing upon development, management and other consultants available in our organization, the Plaza team provides an experienced set of "eyes" to assist the owner in making critical decisions about the way in which a project will proceed.

In many cases we have found that a client's facility usage requirements - especially in a changing technological environment - can be more important to understand than the initial evaluation of design elements. That level of input sets Plaza apart from its competitors. More importantly, during the planning phase of construction, this level of information serves to correct design decisions that may not result in delivering the client's original objectives.

Third, our staff has been trained in serving the client during every phase of construction, including use and occupancy phases. Once a contractor has completed work, it's often difficult to call upon their services to remedy a problem, especially after the punch-list has been reviewed and completed. Focused on serving the client, Plaza has developed a special "Encore Service Program." Our work with a client is not completed until well after a client has moved-in and has occupied a facility for a period of time. Our Encore Service guarantees that our clients are satisfied with several elements: workmanship and facility performance, as well as their relationship with us, their construction partner, even after the project has been completed.

Perhaps the most important element of our approach to meeting the client's needs is the involvement of the senior principals of our firm in every project. Plaza is selective in the projects that we accept. We do not operate as a high volume producer who is likely to ignore quality control requirements. Our focus on delivering select projects permits us to involve our Executive Committee, comprised of senior Fisher Brothers and Plaza Construction professionals, in every phase of the construction process. That involvement has permitted us to build many of the signature installations in the Greater New York area.

The past several years have created an intensely competitive business environment. Numerous firms have been lost to the lowest bid phenomenon, and many client relationships founded on good faith have dissipated.

At Plaza Construction, we recognize that perhaps the most important element in a successful construction job is not simply a well-built project, but it is a well-established relationship between owner and contractor or construction manager, based on ample information and sound decision-making procedures that ensure client satisfaction long after a project has been completed and the client has moved. Most importantly, at Plaza we recognize that the development services we provide enhance our ability to thrive in today's competitive construction marketplace, where the needs of the client have expanded far beyond simple contracting services.

COPYRIGHT 1996 Hagedorn Publication
COPYRIGHT 2004 Gale Group