HOUSEHOLD HELP
Hot Housing Market Revives Architects
By CHRIS CZIBORR
The booming housing market has helped push Orange County’s architectural firms into recovery mode.
The 30 companies on this year’s Business Journal list of top architectural companies reported $274.5 million in Orange County billings for the 12 months ended June 30,5% more than they billed in the prior period.
That’s a big change for the crop of architects on last year’s list, which were coming off a 6% drop in billings.
Employment is more than keeping up with the gain in work.
Firms on the list bolstered their stable of OC architects 11% to 463, compared to a 1% reduction the prior year. Overall OC employment at the companies grew 5% to 1,800.
In all, 20 companies on this year’s list saw an increase in billings, one had no change, eight had decreases and one declined to provide figures and is a Business Journal estimate. Similarly, 16 bolstered their overall staff rosters, six had no change, eight said they trimmed staff, with one an estimate.
Irvine-based KTGY Group Inc. moved up four notches on the list to grab the No. 1 spot. The company, which benefited from strong housing demand, reported a 54% gain in billings to $28 million for the prior 12 months.
“We’re in the best part of the market, gaining a lot from the housing boom in the Sun Belt states,” said James Thomas, KTGY’s chief executive.
About 70% of KTGY’s business is residential. Thomas said he expects healthy double-digit sales growth this year. The company grew total employment 26% to 135 in the period.
Moving down a spot to No. 2 was the Newport Beach office of Honolulu-based Wimberly Allison Tong & Goo Inc. Billings for Wimberly dipped 14% to $24 million.
“We saw some after-effects of the Sept. 11 terrorist attacks and a general softening of the hospitality market,” said Ronald Holecek, Wimberly’s chief executive. “And we were completing a number of projects in Las Vegas without new ones starting up.”
This year should be different, he said.
“We’ve started seeing a change in the past year, continuing into this year,” Holecek said. “And our overseas work in China and the Middle East has maintained itself.”
The company added 16 architects in anticipation of expected work.
Repeating at No. 3 was Irvine-based McLarand Vasquez Emsiek & Partners Inc., which posted 4% growth in billings to $23 million.
“We’re seeing growth in student housing and apartments, as well as mixed-use developments,” said company president Carl McLarand. He expects the coming year to be “quite strong,” with about 20% revenue growth.
“We’re expecting growth in all sectors except for office,” McLarand said.
No. 4 Irvine-based LPA Inc. fell two spots as billings shrank 8% to $22.8 million.
The slow economy hurt LPA’s private work, though its public work continued to gain, said Dan Heinfeld, LPA’s president.
LPA nevertheless grew its workforce 10% to 135.
“We’re starting to see things gear up and we’ve been staffing up accordingly,” Heinfeld said. “We expect more public side work and we’re already starting to see a gradual increase in private sector work.”
About 50% of the firm’s work is in the education sector, with 40% in commercial.
Newport Beach-based GKK Corp. rose three spots on this year’s list to No. 9 with a 51% billings gain to $9.4 million.
Chief Executive Praful Kulkami said GKK is benefiting from public sector work, which makes up 80% of its business.
“We’re seeing growth in healthcare work, but not to the degree that we’re seeing growth in the education and government sectors,” he said. “We’re anticipating 50% revenue growth for this year,a growth rate I don’t anticipate for the entire industry.”
GKK bolstered its workforce 42% to 94 during the past 12 months.
The Newport Beach office of San Francisco-based Gensler Architecture, Design & Planning fell four spots to No. 10 on a 34% billings decline to $7.2 million.
“The revenue drop was part of an overall trend that saw all our clients trying to limit project scope and keep costs down,” said Darla Callahan, vice president and managing director at Gensler. “Companies have been looking to reduce relocation costs and that affects us. Clients have been slower at moving any remodel or expansion forward in this down economy.”
Gensler’s clients include software companies and law firms.
“We had situations where clients only engaged our services for a small portion of a project,that’s a huge impact,” she said. “If there’s a 100,000-square-foot project, and they instead decide to stay at their current space, you end up working on only 10,000 square feet of space.”
Callahan was optimistic about Gensler’s outlook.
“Business is definitely up for us,clients are now moving projects forward and being aggressive,” she said. “They’re looking at how they want to position themselves for the future and are very concerned about brand.”
The Costa Mesa office of Los Angeles-based Nadel Architects Inc. shot up 10 spots to No. 12 with a 45% billings gain in OC to $7.1 million.
“The majority of the growth is in shopping centers that we’re working on throughout California,” said Richard Grandy, senior vice president.
About 60% of the work Nadel’s OC office does is in retail. Grandy said Nadel should post continuing, albeit slower revenue growth this year of about 5%.
Another big gainer: No. 19 Robbins Jorgensen Christopher Architects in Newport Beach, which moved up six spots on a 51% gain in billings to $6 million.
The company’s growth came from more government and university work, as well as increases in interior design projects.
“Our outlook is good, but cautious because of the general state of budgeting problems and confusion in California,” said Robbins president Roberta Jorgensen. “We’re not sure how that will affect the economy in general and our industry specifically.”
Newcomers on this year’s list included No. 13 San Clemente-based PJHM Architects Southwest Inc., which saw revenue dip 17% to $7 million.
Also debuting was No. 29 Bauer & Wiley Architects in Newport Beach, which reported billings growth of 24% to $3.6 million.
Dropping off the list were last year’s No. 26 Irvine-based GAA Architects Inc. and the Irvine office of Cleveland-based The Austin Co., the former No. 28 company on the list. They didn’t post enough billings to make the $3.5 million cutoff.
