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In an industry sometimes besieged with logistical challenges and change orders, Philip Kellogg isn't afraid of a report card.
The president and co-founder of Sarasota-based Kellogg & Kimsey, one of the largest commercial builders in the Sarasota-Bradenton region, Kellogg actually embraces the monthly report cards the firm sends to clients. That includes the Hilton and Marriott hotel chains and retailers from Walmart to Saks Fifth Avenue to Kohl's.
The report cards allow the firm to see where it stands, says Kellogg, and where it needs to improve. The ability to take feedback — and act on it quickly — is also a key reason why annual sales grew 33.3% in 2013, from $45 million in 2012 to $60 million. While that's barely half of what firm had in 2008, when it was at $115 million, it's at least an upward trend.
Kellogg & Kimsey has about 50 employees, including five hired in the last quarter of 2013. “You have to adapt to what the client expects, or they will go on to the next contractor,” says Kellogg. “We will adjust on the spot. We don't wait until it's too late.”
The result of that nimbleness is a 90% client retention rate, a successful figure in a competitive industry like construction. The firm's current projects include a Saks Fifth Avenue at The Mall at University Town Center in north Sarasota County and the One Palm project in downtown Sarasota. One Palm, at Ringling Boulevard and Palm Avenue, is a mixed-use hotel and apartment complex.
Adjusting to client's needs isn't the only factor behind Kellogg & Kimsey's recent surge. The company, says Kellogg, has made a concentrated effort to stay diversified, in geography and sectors. On geography, it has built projects in more than 35 states, and from Sarasota to Phoenix to Seattle. On sectors, it handles a variety of work, including multifamily, retail and hospitality.
The one sector it won't do: public and government work. Kellogg has nothing against that, but he tries to follow the business axiom of stay with your top skill set. Says Kellogg: “I would dilute our abilities if I ever entered the public sector.”
Another staple of the firm's success, says Kellogg, is a niche in mid-level high-rise buildings and other tall structures, which it's done in 17 states. The 10-story One Palm project, a total of 280 hotel rooms and apartments, is its latest tower. “The higher you get off the ground the harder it becomes,” says Kellogg, who cites factors like sequencing and safety that impact tower construction.
The big challenge that looms over all the firm's projects, says Kellogg, is a common industry theme: a labor shortage that plagues builders in all sectors up and down the Gulf Coast. “It's the driving concern and question in our industry,” Kellogg says. “How will we get people to do these jobs?”
Kellogg co-founded the firm in 1986 with business partner Charles Kimsey, who is now executive vice president. Even back then the focus was to get and retain clients, not constantly chase new work. The company will grow at least another 30% in sales this year and in 2015, Kellogg projects, given the commercial recovery tends to trail homebuilding by about 15 months. With growth like that, Kellogg maintains a passion for the company, and the industry — despite the recession.
“It's very tangible,” Kellogg says. “You get to see the results. You get to touch it, feel it and walk on it.”
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