As we welcome in the New Year, it’s customary for us to look back at what the previous year meant to Englewood Construction and the commercial construction industry as a whole. I’m pleased to report 2012 was an excellent year for Englewood as we saw activity levels that we hadn’t seen since 2008.

There are still some headwinds out there, but last year brought some interesting commercial construction trends and developments.

Bids were up…substantially

Commercial onstruction project bidding came back at a high velocity in 2012. It was good to see so many commercial property developers, owners, retailers and restaurants moving forward with confidence and initiating new commercial construction projects. However, this activity level came with a caveat. While the number of projects increased, competition was still high and margins were much lower than other banner years in the commercial construction general contractor industry. So, while we were pleasantly surprised with the amount of work out there, it would be tough to call 2012 an ideal business climate.

Still, the amount of work coming in the door prompted us to substantially increase our commercial pre-construction services and staff. Prior to 2012, it was almost impossible to find national commercial contractors that were expanding staff.

We were also fortunate to see an uptick in negotiated business vs. competitive bid activity and hope this commercial construction trend continues into 2013. As only the best commercial contractors will tell you, negotiated work truly is best for a commercial construction project and helps a commercial developer save money and time.

Englewood and world domination

Last year, we saw a proliferation of international retailers opening new stores in the U.S. Due to our 20,000+ national subcontractor network, we were fortunate to work with many international retail brands as they made inroads into several major markets.

Through these new relationships, Englewood was able to do something we hadn’t done before…we took our business international with new retail construction projects in Canada last year. Entering new international markets may prove challenging for some, but for the best national general commercial contractors like Englewood, the process should be a smooth transition. We had such a good experience that we are anticipating more international commercial construction work in 2013 for Englewood.

Investors bring value to struggling shopping centers

The most shopping center construction activity in 2012 came from owners reinvesting heavily into older shopping mall renovations. These projects were across the board – from strip centers and stand-alone stores to grocery-anchored power centers and regional malls – but the strategy was the same: owners sought to bring value to underperforming retail properties by engaging the best shopping center contractors.

Another trend we saw was a large increase in commercial construction maintenance calls. In the past, it seemed like owners were just crossing their fingers that something wouldn’t go wrong. And we all remember the preventive maintenance lessons we learned from the BP oil spill. It was good to see owners being proactive to make sure major equipment and building systems were up-to-date and in-tact.

High- and low-end retail rule…middle coming back

As we stated in our 2013 commercial construction trends and predictions, two markets have been leading the retail resurgence: the luxury and the value market. We saw this trend begin to take hold in 2012 and we fully expect it to play out on a larger scale in 2013.

The questions still remain for the middle market. 2012 was not kind to the tried-and-true middle-market retailers that were the backbone of the retail sector for years. As new international retailers muscle their way into the U.S. and value stores and restaurants gain greater appeal to the masses, the middle-market is still struggling to regain its identity and the status it once held. We won’t count them out though. As a retail construction contractor with more than 30 years of experience, one thing I have learned is to never count out the consumer. When confidence is back in full swing, I expect many of the middle-market stalwarts to come charging back.

Congrats to the team at Englewood

Lastly, I’d like to share some commercial construction news and heartfelt congratulations to my team at Englewood Construction. In 2012 Englewood received a prestigious Best Projects award from ENR Midwest for the interior design work we did at the Local 17 International Association of Heat & Frost Insulators headquarters in Tinley Park. It’s always nice to finish off a good year with recognition as one of the best Midwest commercial contractors around from your peers.

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