The 27 biggest firms with work here posted $9.4 billion in local revenue last year, flat from a year ago and up 7.4% from two years ago, based on this week’s Business Journal list.
Nine firms on the list saw year-over-year increases in work, 12 saw declines, and six entries are Business Journal estimates.
The industry is faced with sky-high construction costs as commodity prices rise, while labor shortages continue to impact the sector, potentially causing delays down the line.
Still, the pandemic did not bring about the lull that some local firms feared.
“The work we did in 2020 was business that was already on the books before the pandemic, so although we did see a pause at the onset of the pandemic, it didn’t have a significant impact on our business,” said Michael Myers, Southern California regional president of McCarthy Building Cos.
“It’s the projects we are chasing now that are being impacted by rising costs.”
FivePoint School
McCarthy once again led local companies in 2020, with annual revenue from OC operations jumping 19% to nearly $1.2 billion.
C.W. Driver Cos., which counts civic and education projects among its top-generating sectors, saw a similar jump in revenue last year, boosting the company to No. 11.
Work handled from the Pasadena-based firm’s Irvine office jumped 19% to nearly $247 million, with recent local projects including work for Chapman University and Orange Coast College.
The company recently broke ground on Solis Park School, a K-8 school at Great Park Neighborhoods within the Irvine Unified School District.
The school will serve about 1,000 students in new communities at the FivePoint Holdings LLC (NYSE: FPH) development.
“Education continues to be our strongest sector,” said President Karl Kreutziger. “We think the opportunities of last year will carry over into 2021 and 2022.”
The largest local project that started last year were the first two phases of expansion at the James A. Musick Facility Jail, with construction led by the Irvine office of Bernards.
The $261 million project is the fifth-largest construction start in the state last year, according to data from construction trade publication ENR California.
ENR also puts the latest phase of Edwards Lifesciences Corp.’s campus expansion in Irvine at around $141 million.
Pandemic Pivot
When stay-at-home orders hit the region a year ago, construction firms were deemed essential, albeit with a few concessions.
Companies had to quickly adapt to keep operating, such as having fewer workers on-site in order to adhere to social distancing protocols.
Firms also looked to diversify their portfolios as the pandemic hit some sectors harder than others.
Such was the case for R.D. Olson Construction, the Irvine-based affiliate of Bob Olson’s R.D. Olson Development in Newport Beach that specializes in hospitality projects.
“We luckily had the foresight to pivot into other industries, such as the housing sector, which helped carry us through the pandemic,” said President Bill Wilhelm, whose firm is No. 18 on this year’s list, down five spots from last year.
The company has several multifamily projects on the books with north of 500 units currently under construction, including Prado Family Homes, a 50-unit, five-building community in Fountain Valley.
C.W. Driver has also noticed strong demand for multifamily construction in Orange County.
“We almost can’t keep up with it,” Kreutziger said. “We have a drastic shortage of residential units here and I don’t see demand letting up any time soon.”
The company has 18 residential projects in the works.
Hospitality business appears to be picking up as California prepares to fully reopen and consumer confidence returns, according to Wilhelm, whose firm recently began a redevelopment project for the 498-room Sheraton Park Hotel near Anaheim’s convention center.
“We’ve been fielding calls from existing customers in the past month who had pressed the pause button on projects last year, and are ready to pick back up,” said Wilhelm, noting that the market will first see a return for renovation and adaptive reuse projects followed by ground-up developments.
