Mark Payne | Courtesy Swinerton

Trends to Watch in SoCal Construction

Carrie Rossenfeld Hospitality & Tourism

Commercial construction firm Swinerton is celebrating its 130th anniversary this month with a new logo and name change. Earlier this year, Swinerton announced the company would undergo a rebranding from Swinerton Builders to Swinerton and unveiled its new logo.

According to the company, while the logo remained true to Swinerton’s roots and history, it evolved to visually showcase the company’s outside-the-box thinking and symbolically represent Swinerton’s forward-thinking and driven nature, as well as its shift from Swinerton Builders to Swinerton to highlight it “limitless future.”

The company, a staple of the building industry on the West Coast, has been involved in such high-profile projects as the San Diego Airport Terminal 2 Parking Plaza, part of a recent trend of large airports planning major renovations over the next decade. In Orange County, Swinerton is involved with the Great Park Ice & Hockey Sports Complex and improvements to both John Wayne and Long Beach Airports.

SoCal Real Estate spoke with Mark Payne Swinerton’s San Diego district manager, and Ray Haj, the firm’s district manager for Los Angeles and Orange County, to gain insight on upcoming commercial construction projects and trends in the Orange County and San Diego areas

SoCal Real Estate: Which upcoming commercial construction projects in your respective markets stand out for you?
There are some very exciting and notable projects on the horizon in San Diego — the Convention Center expansion, San Diego Airport Terminal 1 replacement, SDCCU Stadium redevelopment, and over $4 billion in upcoming work for UCSD, split between the UCSD campus and Hillcrest medical sites. In the private sector, there are also major redevelopments planned for the Embarcadero and Horton Plaza properties. There is also the ancillary work that accompanies many of these major developments that will also be available. Much of this upcoming work will be progressive design-build, which we prefer due to the collaborative, team approach that we can provide to our clients.

Haj: The L.A. and OC markets are extremely busy, and Swinerton is lucky to be diversified in many markets to take advantage of that. Some of the key projects we are working on are The W-Hotel Downtown L.A., Evergreen Project “Disney” in Anaheim, the Radisson Hotel in Anaheim, Culver Studios in Culver City, Long Beach Airport, 2nd Home in Santa Monica, Wanda in Beverly Hills, and 801 South Broadway in Downtown L.A. are some of the upcoming projects that we are working on.

What construction trends are you noticing in each of your markets?
The overall trend in the San Diego commercial construction market is still fairly robust, although there does appear to be some slowing down in late 2018 and carrying into 2019. The major markets in which we are actively involved in San Diego are multifamily residential (primarily high-rise), tribal gaming/hospitality, healthcare, higher education, parking structures, aviation, and office/tenant improvements. Each of these markets will continue to have opportunities and will remain active, although the multifamily residential market is slowing as more and more product comes online, primarily in the Downtown San Diego area.

We are also seeing an increase in the use of the P3 and progressive design-build delivery models in both the public and private sectors. Swinerton has a good track record of successfully completing projects with both the P3 and progressive design-build delivery models and is well positioned to expand these capabilities in the future.

Ray Haj | Courtesy Swinerton

The use of modular/pre-fabricated units in the hospitality, multifamily-residential, and student-housing markets is becoming more prevalent due to cost and schedule savings. This allows us to cut overall project costs and reduce construction time. Early involvement in the design phase, working collaboratively with the architect and structural engineer, is essential to making the use modular construction feasible.

Haj: We continue to see a more and more collaborative design approach, much earlier engagement required from the GC, and a bigger leading role by the GC from precon thru construction. On the civic and county side, we see more opportunities on the P3 side and support in financing to have those projects materialize. We see more national GCs and subcontractors trying to establish themselves in SoCal market, which is bringing more competition and more innovation but unfortunately limits any available qualified craft in the market. We are seeing projects that are designed to allow future flexibility as needed to adjust to proper market needs, parking requirements, and technology differentiators.

What trends are starting to go away?
The old, traditional design-bid-build delivery model for commercial construction is being replaced by other, more collaborative, team focused, best-value delivery models such as design-build, progressive design-build, CM at-risk, lease/leaseback, and P3.

Digital document management has primarily replaced paper documentation. Software such as CMiC, Bluebeam, Revu, BIM 360 Field, and BIM 360 Field are used primarily on all of our projects. The days of blueprints are over.

Haj: As expected, the new laws and tariffs have limited some foreign investors (especially Chinese) from continuing their development in the market. We continue to see a decline in hard-bid work or just pure design-bid build projects. The traditional way of contracting between the owner, architect, and GCs is definitely becoming more of an anomaly these days.

What else should our readers know about SoCal commercial construction?
The SoCal commercial construction market is still very active, with considerable amounts of development in both the public and private sectors. There is also a considerable amount of competition that still exists across most markets, requiring GCs to stay in the forefront relative to new technologies and innovations. Swinerton strives to do this on a daily basis. The focus needs to be on providing exceptional customer service to our clients and giving them the peace of mind they want. Clients want you to bring solutions, not problems, and those companies who can do this successfully will prosper.

There continues to be a considerable shortage of skilled labor available across most construction trades, which oftentimes can lead to quality and schedule delay issues if not managed properly. This shortage will continue until the overall construction industry begins to slow down.

This is still an exciting time to be involved in the SoCal commercial construction market, and Swinerton is well positioned to remain a leader not only in SoCal but throughout California.

Haj: SoCal (especially L.A. and OC) is booming. Although there are less foreign investment (especially by Chinese developers) and some new tariff regulations, I still feel the market will stay steady for the next three years, and after a little slowdown and softening it will pick up again as we start preparing for the Olympics in 2028. We are very fortunate to be living in such a market, but due to limited qualified labor, we should all be careful not to overextend ourselves such that we can’t deliver what we promise.