COMMERCIAL BUILDERS ADAPT AND SURVIVE
Commercial builders adapt and survive in recession
By Peter Healy, Staff Writer, The Advocate

Stamford, CT - (March 12, 2009) - Someone apparently forgot to tell Building & Land Technology about the recession.

The Norwalk-based developer has started construction on four speculative buildings in Stamford's South End.

An eight-story, 260,272-square-foot office building and a six-story, 140,222-square-foot office building are under way at the southwest corner of Atlantic Street and Washington Boulevard, overlooking Stamford Harbor.

Also, construction has begun on a 15-story, 336-unit condominium tower on Pacific Street. The renovation of Yale & Towne's Mill Building at 200 Henry St. also is under way. Named for a lock factory that closed several decades ago, the Mill Building will contain 225 condos as well as retail space.

The structures are part of the 80-acre Harbor Point project that BLT expects to finish over the next 10 years. Plans include 5.1 million square feet of housing in 4,000 units, a 115-room hotel building with 50 condos, three office buildings that will encompass 800,000 square feet, 400,000 square feet of retail and restaurant space, 11 acres of parks and a 485-slip marina.

BLT officials declined requests for an interview.

Among the retail projects in the South End, BLT has city zoning approval and a committed tenant, New York grocer Fairway Market, for a 55,000-square-foot grocery store at 7 Market St. It is awaiting a building permit, according to city officials.

The company's Harbor Point is one of the few major commercial projects actively being built in Fairfield County. Last year, Stamford-based F.D. Rich Co. put a Ritz-Carlton hotel and residence project at Atlantic Street and Tresser Boulevard on hold until market conditions improve.

Blackrock Realty last summer broke ground on the Fairfield Metro Center rail station project in Fairfield. TD Bank, however, filed a foreclosure notice against the developer last month.

The 35-acre project on Black Rock Turnpike would include a railroad station, a hotel, 860,000 square feet of office space, 75,000 square feet of retail space, restaurants and a conference center. The proposed completion date is mid-2010.

The developer of a similar project, 95/7 in Norwalk, expects to start construction later this year, said Kim Morque, a principal at Spinnaker Real Estate Partners.

Morque said Spinnaker has done site preparation and utility work at the 95/7 location near the Norwalk River, Route 7 and Exit 15 of Interstate 95. He said Spinnaker was looking for office and retail tenants for the $450 million project, which is slated to include 600,000 square feet of office space, 125,000 square feet of retail, 300 housing units and 2,500 parking spaces.

Spinnaker and BLT's projects would be going up when the rest of the industry is tanking. Last year, U.S. private sector construction dropped 9.4 percent from 2007 levels to $770.4 billion, the Commerce Department reported early this month. A 27.2 percent plunge in private housing construction caused most of the decline, it said.

Though commercial construction companies cannot rely solely on out-of-ground projects, renovations and additions have sustained them.

A.P. Construction of Stamford has plenty of active customers among schools and medical buildings in Connecticut and Westchester County, N.Y., said Andrew Ashforth, president and chief executive officer.

"At this point, we have a backlog for '09," Ashforth said. "We got the contracts in early '08."

The company expects to finish a two-year renovation of Trumbull High School this summer, he said. A.P. Construction, a division of the Stamford-based Ashforth Co. commercial real estate firm, also is slated to do a $36 million upgrade of the Hamden Police Department facility.

Ashforth said this is a good year for clients to start building projects because lumber prices are down to 1982 levels, and prices for fiberglass and copper piping have dropped, too.

"It's a good time to build, but you have to have the money to do it," he said.

Renovations and additions to banks, schools, hospitals and corporate offices also support W&M Construction, whose customers are in Connecticut and Westchester County.

"We are still finding work," said Tom Durels, chief executive officer of W&M Construction. It is a unit of W&M Properties of New York City, which owns and manages office buildings in Westchester, Stamford and Norwalk.

"At W&M, we have been through economic cycles before," Durels said. "We are in this for the long haul. We are strong financially, and we are able to weather this storm."

He said school work will help W&M survive the downturn. W&M Construction is the construction manager for a $17.3 million renovation of Stratfield Elementary School in Fairfield and the contractor for a $3.5 million renovation at Jonathan Law High School in Milford, Durels said. No W&M Construction projects have been delayed or canceled this year, and the company's 35 employees have remained onboard, he said.

Durels said he has noticed, however, that office tenants are demanding less extravagant improvements when expanding or downsizing facilities.

Ashforth, of A.P. Construction, said his company has not laid off any workers, either. It employs 50.

But Ashforth said public entities such as schools and municipalities have slowed their building projects because it is harder to raise money by issuing bonds. He is cautious about construction prospects for the near future. Ashforth said architectural firms have been cutting staff, which could be a trend indicator.

"We are strong for this year, but concerned about 2010 and '11," Ashforth said.