Commercial real estate and construction in 2019

Continued growth is expected for the next few years, mimicking recent trends throughout the industry

As Board president of the Southwest Washington Contractors Association, I am proud to say that we have championed a thriving construction industry in Southwest Washington since 1946.

With a strong economy in the Pacific Northwest, it has been very gratifying to watch as our contractor members experience unprecedented growth. When contractors grow, a whole host of other companies grow, too. As does commercial real estate development.

As we approach the end of the year, my thoughts are focused on 2019 and beyond. We expect to see continued growth for the next few years, mimicking the trend we’ve seen over the past couple of years. To illustrate, both the City of Vancouver and Clark County have hundreds of projects in the permitting and review process. All our ports in Southwest Washington are aggressively planning on expanding their future developments as well. Several school districts have passed bond measures that should result in over a billion dollars in new construction locally as we move in to the next decade. Clark College, too, is in the planning process for what will be a North County campus.

With all the growth and what appears to be a solid future, you may be wondering what the larger long-term issues are that face the construction industry.

Effectively attracting talent has been plaguing the construction industry for several years. Like most industries, there is a frustration within the contracting community about how to secure an adequate and engaged staff.  The rising concern from property developers, whether they are constructing apartments, offices, industrial parks, or schools, is project timelines. If the industry can’t attract sufficient talent, it takes a toll on the length of project timelines, thus increasing the cost of development.

One reason for the lack of workforce is the “old school” image of the industry. Do construction companies create a welcoming environment? Do they value diversity in their workforce? Do people get to work on something impactful? There are so many questions to be asked.

This is not to say our local workforce development agency and other partners are not taking appropriate steps and putting programs into place, because they are. In addition, I am also aware of efforts from the Governor’s Office to create stronger programs based around apprenticeships. We need to continue these efforts with increased urgency and support from the State Legislature.

Contracting is an industry that has been slow to adapt to the pace of change in technology. New technologies are already changing how infrastructure, real estate and other built assets are being designed, constructed, operated and maintained. Those technologies include building information modeling (BIM), prefabrication, wireless sensors, automated & robotic equipment and 3D printing. In the early phase of this transformation, start-ups have been among the first to experiment. As with other industries, disruption can and will occur as startup companies find niches they can squeeze into. They can provide new and effective solutions, lower cost, and faster service. With the pace of change accelerating, they should act now to identify how these technologies might impact their company.

A small, well-known example includes Amazon and their shake up to the brick-and-mortar retail world. As their business model includes regional distribution centers, Amazon has changed the balance of the type of buildings needing to be built. Not only does the demand for certain assets change, new buildings must live up to new requirements. People want buildings to be as adaptable as their electronic devices, serving numerous purposes. Buildings are designed and constructed to be used 24/7 for multiple purposes, for example, as offices during the day and residential units at night.

I’d suggest we create even higher levels of involvement with our education industry, from the local school districts to trade schools and universities. Education discussions should focus on a specific target of charting a path to create the workforce and resources we need here in Southwest Washington. We need to keep our commercial construction industry and local companies on the cutting edge as we move into the next decade.

Jim West is with Jim West Commercial Real Estate and Zenith Properties NW, and is also the Board president of the Southwest Washington Contractors Association.

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