To get a sense of what Richard Freund has had to do to survive the construction downturn, consider how many miles he's driven in just more than a year.
The GMC Yukon he bought in December 2010 already has 44,000 miles on it. “A lot of window time,” he quips.
But that's what it takes for the owner of Fort Myers-based commercial builder Brooks & Freund to grow the business in tough economic times. The firm's revenues grew 25% in 2011 to $45 million compared with 2010 thanks to geographic diversification.
“There's not enough work in Southwest Florida,” says Freund, 49. Instead, the longtime builder has traveled for work all over the state, picking up more public work as corporate construction shrank.
Freund, who merged his previous company with Don Brooks' firm in 2000, has successfully managed through the boom and bust (Brooks retired in 2010). In 2000, the combined firms did about $14 million in sales. By 2006, annual revenues had surged to $110 million.
But the real estate collapse shrank revenues by half, Freund says. Fortunately, the company had a track record of building public projects, which during the downturn became the only kind of work available.
Brooks & Freund won business from Fort Myers-based National Development Corp. and Tampa-based Norstar Primerica, which build affordable-housing apartments. “We got that right before the downturn,” Freund says. “We work with these two developers right now all over the state,” he says.
Construction of affordable housing complexes has continued through the downturn and isn't abating. “We have the potential to work for six housing authorities with them,” Freund says.
Brooks & Freund landed other public projects outside Lee County. “We're reroofing the Sarasota airport,” Freund says.
Still, it can be tough to win work in other counties because many municipalities give preference to local firms. “We lost a fire station in Palm Beach because of local preference,” Freund says, noting that taxpayers in that jurisdiction ended up paying more money for the project because of that barrier.
One of the keys to getting work in other jurisdictions is finding good subcontractors who can vouch for you. Then, Brooks & Freund sends a superintendent to live in that area temporarily during the life of the project and Freund visits frequently, hence the high mileage on his new vehicle.
Meanwhile, Southwest Florida continues to be plagued by high vacancy rates and depressed rents in many buildings. “We need to fill up that space,” Freund says. But Freund says he's seeing increased tenant-improvement work from companies expanding in existing space. “The phone is ringing again,” he says.
Freund recently hired a marketing administrator to remind customers that his company can do interior renovations. “They thought of us as big-building people,” he says. But, he notes, “We'll hang a door for you.”
Two obstacles remain in the way of a full recovery, Freund says: Bank lending and government uncertainty. “There's still too much turmoil,” Freund says.