DeAngelis Diamond co-founder believes construction company has found a gem in Detroit’s re-emergence as a millennial magnet.
Since it was founded 22 years ago, Naples-based commercial construction firm DeAngelis Diamond has based its expansion model on organic growth. Whether geographic or product type expansion, the company has minimized risk in moving into new markets.
The result has been steady growth: founding partners John DeAngelis and David Diamond have built the firm into a 200-employee company with 2017 revenues of $366.4 million. That’s up 36.6% over $268.3 million in 2016 revenues.
When the firm wasn't expanding in Florida and the Southeast, with offices in Fort Myers, Sarasota, Birmingham, Ala., and Nashville, it was broadening its portfolio into upwards of 20 project categories, such as health care, office, institutional, faith-based, hospitality, multifamily, manufacturing and more.
On the surface, the firm's latest growth move — opening an office in Detroit — may appear to be unusually risky, and out of geographical character. In reality, it's as sensible as anything else DeAngelis Diamond has done.
“No matter if it's geographic growth or product type, there are three things we have to have,” says Diamond in a conference room aptly named “The Orange Room” in the company’s contemporary-design Naples headquarters. “We have to have existing client relationships; existing talent that has success in that market; and it has to be a strong, growing market.”
'We look for markets that have been in a long downturn trend, they’ve reached the bottom and are recovering.' David Diamond
In entering a market more than 1,300 miles from the company’s headquarters and 550 miles north of its closest office, Detroit checked all three boxes.
David Kovalik, who started with DeAngelis Diamond as an intern 13 years ago, is a Michigan native with existing relationships in the development community in Detroit. Having quickly risen through the ranks to vice president of project management, he is now vice president and Detroit division manager, poised to take advantage of what he says is $3.4 billion worth of current construction in the re-emerging market, with another $5.1 billion in projects working through the pipeline.
"He said he'd like to go back, and we said, ‘Gee we'd like to go with you. Let's do this together,”’ says Diamond. “He probably would have gone up there with or without us. He said he'd much rather do it with us.”
And while still in the process of setting up the office and hiring personnel, Kovalik already has a project to work on. “We have a medical office building client here in South Florida that also has a project up there,” says Diamond.
Another plus: the Detroit area, despite some negative national press, is poised for explosive growth.
“We look for markets that have been in a long downturn trend, they’ve reached the bottom and are recovering,” says Diamond. “We want to be in the beginning of what we see as a very long-term growing market, and we see that in the Detroit area. Other contractors will come, but we will have already been there and established relationships.”
Rather than manufacturing, which fueled Detroit’s boom during the golden age of the automotive industry, Diamond says the city is investing incentive dollars into small to mid-size tech and entrepreneurial companies, drawing millennials in an effort to repopulate the city with a youthful workforce.
Kovalik says investment is being led by Quicken Loans founder and owner of the NBA’s Cleveland Cavaliers Dan Gilbert and Mike Ilich, founder and owner of Little Caesars Pizza and former owner of the NHL’s Detroit Red Wings and the Detroit Tigers of Major League Baseball.
He says Detroit is a right place-right time proposition. “There are a lot of opportunities in Detroit right now,” says Kovalik. “The City of Detroit is on board with everything that’s going on. In the metro area, the GDP is $250 million annually, so it’s a very large market, and with the strengthening economy, there is a lot of opportunity.”
Diamond says he expects the Detroit office to employ as many as a dozen people.
“We're looking forward to being part of the Detroit area,” says Diamond. “We don't want to be thought of as a company that just parachuted in. We're there to stay. We're intentionally not sending a dozen people form Florida up there. We have a home-grown boy there to run it and we're hiring from there."