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Tenant-Improvement Work Tops $900 Million Here

Orange County’s 30 largest tenant-improvement contractors continued to grow last year, combining for $909 million in local work.

This week’s Special Report includes a list of OC’s 30 largest tenant-improvement contractors ranked by dollar value of work performed in the county last year. It also details data about the square footage of work the firms performed and their number of employees, though that information didn’t affect the rankings.

The firms’ revenue rose by 16%, or about $122 million, about the same rate as the 28 firms on last year’s list. Previous lists showed gains of 29% in 2013 and 20% in 2012.

The slower growth appears related to lower leasing activity volume in OC, where 10.4 million square feet changed hands last year, down about 14% from 2014, according to Voit Real Estate Services.

Many tenants also may have decided to remain in place, considering OC’s low 10.8% vacancy rate and higher average rent of $2.26 per square foot at the end of the year, up about 9% over 2014.

Tenant-improvement work typically occurs when firms move into new offices.

Waiting for Bulldozers

Local businesses likely are waiting a couple of years before moving into larger offices, said Jason Lantgen, a vice president with commercial real estate company JLL, which has an office in Irvine.

“Another 4 million square feet will come on line by 2018,” he said of projects in the pipeline, so companies are likely signing short-term renewal leases until new offices are finished. It will be easier to find contiguous blocks of at least 100,000 square feet by then in Class A buildings, he said.

Twenty-five firms still reported increases in revenue. Two firms debuted on the list, three reported revenue decreases, and the Business Journal estimated revenue for two firms.

• KPRS Construction Services Inc. in Brea jumped three spots to No. 1 with about $118 million in revenue, up 57%. The firm worked on 2 million square feet worth of projects, up 29%.

KPRS also had the largest increase on the list in dollar amount and square footage worth of work.

“We hired some new managers, saw several of our existing clients grow, and signed a few national clients, like Coca-Cola, that wanted a lot of space in Orange County,” President Joel Stensby said.

• Howard Building Corp., which is headquartered in Los Angeles but maintains a Costa Mesa office, dropped one spot to No. 2. The firm had about $110 million in local revenue, down about 10%. It worked on about 1.5 million square feet, down about 19%.

• Swinerton Builders’ Irvine office also dropped one spot to take No. 3 with about $101 million, up 26%. It worked on 846,000 square feet. The San Francisco-headquartered company employs 223 locally and 2,484 firmwide, up 23%.

• The Turelk Inc. office in Newport Beach held steady at No. 4 with $74 million, up 10%. Its local work was flat at 2.6 million square feet.

• Irvine-based Synder Langston climbed one spot to No. 5 with an estimated $50 million in revenue, about flat. The Business Journal estimated the company worked on 550,000 square feet.

Notables

Four firms reported growth greater than 70%:

• Caliber Construction Inc. in Brea leapt four spots to No. 12 with $26 million in local revenue, up 88%. It worked on 525,000 square feet, up 50%.

• CDG Builders Inc. in Irvine moved up two spots to No. 16 with $18 million in revenue, a 92% jump. The firm worked on about 707,000 square feet, up 76%. It worked on 29 projects worth about $6.6 million in the first quarter of the year, the equivalent of about 70% of its revenue in the prior year.

• Caribou Industries Inc. in Santa Ana moved up four spots to No. 22 with about $9 million in revenue, up 134%. It nearly doubled the local square footage it worked on to 162,000. It employs 212 in OC, up 47%.

• Servco Builders in Irvine climbed two spots to No. 23 with $7.5 million in revenue, up 78%. The company worked on about 236,000 square feet here, up 28%.

• Meanwhile, Slater Builders Inc. in Costa Mesa debuted at No. 18 with $17 million, up 32%. It worked on about 544,000 square feet, up 260%.

• MSH Construction Co. in Huntington Beach made its first appearance on the list at No. 29 with $3.7 million, up about 8%.

Down Trend

Two companies reported lower revenues last year:

• Lexington, Ky., contractor Gray Construction Inc. fell two spots to No. 7. Its Anaheim office revenue was $45 million, down about 18%. The firm worked on about 1 million square feet, down 42%, and employed 165, up 36% locally, the greatest employment increase of any firm on the list.

• DBaC Inc. also had a down year, though it climbed one spot to No. 8. The Newport Beach-based firm took in $38 million, down 1%. It worked on 1.3 million square feet, up 38%.

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