Architectural firms reported their Orange County billings climbed 9.7% as they recuperated from the pandemic.
Billings for the 25 largest firms on this year’s list were $518.9 million for the 12-month period ended June 30, according to the Business Journal’s annual list. A year ago, the firms reported a 1.1% decline.
Irvine’s KTGY, which specializes in residential, retail and interior designs of resorts, climbed one spot to No. 4 by reporting OC billings increased 29% to $36 million.
“We’re seeing the growth in almost every type of work we’re doing—residential, higher density apartments, for sale residential as well as build for rent,” Chief Executive Tricia Esser told the Business Journal.
The four largest firms all reported growth.
Irvine-based Ware Malcomb retained the top spot, reporting billings climbed 8.9% to $87.7 million. Companywide sales during the same period climbed 20% to $218.8 million.
Customers of the firm are often discussing whether employees will return fully to their offices, Chief Executive Ken Wink told the Business Journal.
“We’ve seen good activity in the office market and the existing market is absorbing some new growth,” Wink said. “But it hasn’t come back fully.”
Multifamily has also been a hot market for No. 2 AO Architects of Orange, which reported a 17% increase to $73.6 million, saying it’s emphasizing the healthcare sector.
“We’re expanding our multifamily services into different segments, such as affordable, modular and senior housing,” Managing Partner Rob Budetti said. “We are bullish on the sector.”
For more on Ware Malcomb and AO, see stories on pages 14 and 16.
The list ranks 25 architecture firms that hit the Business Journal’s baseline of at least $5 million in local billings.
Eighteen firms reported an increase in year-over-year billings, up from seven last year. Only four reported a decline in billings, compared to 11 a year ago.
Ten firms reported billings topped 10% growth, versus four a year ago.
The firms reported faster growth outside of OC as that revenue rose 11% to $2.1 billion.
The companies on the list reported a 4.4% increase to 400 OC licensed architects, while their overall employee count increased less than 1% to 2,639.
Orange County’s architecture firms are seeing faster growth of late than the region’s cohort of engineering firms.
Engineering growth has slowed from a 13% increase in 2019 billings to a less than 0.1% increase last year.
• The biggest percentage increase on the list was No. 20 GAA Architects Inc. of Irvine, which climbed 46% to $7 million. The firm, which was established in 1978, has designed buildings for clients such as Extron Electronics, Paramount Studios and 99 Ranch Supermarkets.
• No. 17 tBP/Architecture Inc., which was the fastest grower on last year’s list at 47%, kept growing but at a slower rate, reporting a 2.6% increase to $9.1 million.
• Irvine-based LPA Inc., No. 3 on the list, reported its OC billings climbed 21% to $66.6 million, a rebound from a year ago when they fell 8.6%.
• Irvine-based No. 21 TCA Architects Inc. rebounded to 6.7% increase at $6.6 million. A year ago, it was the biggest decliner on the list with a 41% drop.
Interest Rate Worry
Higher interest rates created a “slight hesitation” among residential customers while giving a respite to employees because workflow has been so high, KTGY’s Essen said.
An emerging trend is creating designs where adults can work from home and possibly alongside their children, Essen said.
“It’s a different world,” she said. “It’s figuring out how to make a dining room space into an office. You also have the issue of kids being at home with parents, so it’s created interesting conversations about how you do that.”