There appears to be no shortage of work for Orange County’s tenant-improvement contractors. The local market heated up last year after a slower 2017.
“There’s a lot of activity right now. The economy is on fire,” Chris DeFazio, principal at Irvine-based CDG Builders Inc., told the Business Journal.
“In our company history we’ve never said no to opportunities,” he added, “but we’re getting to the point where we have to decide if we want to take on new projects.”
CDG handled about $64 million in local work last year, a 48% surge over 2017.
The increase pushed the company into the top five of the Business Journal’s annual ranking of the 37 busiest tenant-improvement contractors ranked by dollar value of OC business.
Big Names
Local TI work last year jumped 11% to $1.3 billion, following a lackluster 2017 when sales inched up less than 2%.
Most companies fared better in 2018, with only six ranked firms experiencing a decline.
Contractors have otherwise reported double-digit year-over-year sales increases since 2011.
Gains are expected to continue.
“We set ourselves up to be successful with the onslaught of work coming in the door,” DeFazio said.
Part of this expansion was to staff a new division—another sign at CDG of a healthy workflow—serving hospitals and medical offices here. The firm also dabbles in science and higher education projects, though commercial work is still tops for the 60-employee firm.
Big clients include Irvine Co., Edwards Lifesciences Corp. (NYSE: EW), Hines, and University of California-Irvine.
DeFazio expects a slower clip in this year’s uptick, with the presidential campaign bringing market uncertainty—part of why the firm moved into the new product type.
“We are trying to balance our portfolio,” DeFazio said.
1,200%
One of four newcomers to this year’s list is No. 31 SCGWest Retail & Restaurant Construction Management, which moved its headquarters from Arizona to Irvine in 2017. It handled $7.9 million in work last year—up more than 1,200% from its first year here—and has nearly 20 employees now.
It worked on about 119,000 square feet in OC last year.
“When we started working in California, we realized it would be best for our growth to move here,” said co-founder Kyle Gorman. “Orange County itself is its own great economy.”
New customers and a new niche bolstered growth: “Once we started to focus on retail and restaurants, things started to really take off.”
Gorman nabbed new clients such as Waters Edge Winery, with a handful of Southern California locations, and repeat business from companies like Xperience XRG, which runs a half-dozen Mexican restaurant chains such as El Torito as well as single, higher-end locations like Laguna Beach’s Las Brisas—which on its own has had two renovations in the last four years.
Like DeFazio, Gorman sees slower growth ahead.
“We’re new to this market and don’t want to expand too fast,” Gorman said. “There’s a lot of available work, and we feel like we’re in the driver’s seat.”
Ups, Down
Top-ranked Howard Building Corp. operates locally out of Costa Mesa and reported a 15% jump in sales to $163 million, edging out KPRS Construction Services Inc. The Brea firm had $151 million in local work, a 4% hike.
San Francisco-based Swinerton’s Irvine office reported a 20% jump to $120 million, and a 36% jump in square footage to 680,000 square feet; No. 4, Long Beach-based Turelk Inc., had $110 million in deals from its Newport Beach office, a 5% increase.
Deacon Construction LLC in Citrus Heights reported losses in sales, square footage, and employee count, dropping from No. 9 to No. 17. Its 52% decrease in sales to $22.6 million was the biggest drop on the list.
