Face off: Triangle construction firms show resilience and growth
Writer: Eleana Teran
June 2024 — Construction leaders in the Triangle are demonstrating resilience and adaptability as they navigate a dynamic market landscape. Marking significant achievements and embracing strategic expansions, they are setting a benchmark in the industry. Through diversification, employee empowerment, and community-focused projects, leaders in the region are not only growing their businesses but also contributing to the region’s economic and social fabric. The construction sector’s proactive approach to workforce development and market challenges showcases a commitment to innovation and sustainability.
According to CBRE’s Q1 2024 Raleigh-Durham Industrial Figures, of the 2.6 million sq. ft. underway in 1Q24, 41% has been reported as leased. Construction starts have slowed dramatically, which is expected to balance supply and demand. Similarly, Colliers’ Q1 2024 report Raleigh-Durham Industrial report coincides, attributing the slowdown to the higher interest rates and capital market volatilities.
In the multifamily sector, Avison Young’s Raleigh-Durham 1Q24 report notes that 11% of the inventory is under construction. The first quarter saw a delivery of 3,160 units, pushing annual deliveries in the Triangle to 12,059 units. Additionally, CBRE reports that office space under construction has declined to 855,616 sq. ft., representing 1.5% of inventory, with just 18% of this space leased.
Mike Benford, vice president of project development at Samet Corporation, and Drew Hardin, director of operations at Monteith Construction, provided insights into their companies’ recent successes, discussing key developments such as record revenue growth and diversification into new market sectors. Their perspectives highlight how their organizations are adapting to current economic conditions and preparing for future opportunities in the Raleigh-Durham metro area.
What have been some of the most notable achievements and developments for your organization over the past year?
Mike Benford: This past year has been remarkable for us. Since 2017, we’ve consistently achieved year-over-year growth. The fiscal year 2023, from Oct. 1 to Sept. 30, was our highest revenue year for this office, marking a great accomplishment. We’ve expanded our team significantly, adding new talent, from project engineers to project executives, bringing our employee count in the Triangle to 125. Additionally, we’ve diversified into new market sectors. Beyond multifamily projects, we’re now actively involved in life sciences, advanced manufacturing, and public sector projects, including collaborations with universities, municipalities, and civic entities in Raleigh. The key highlights would be our revenue growth, enhancement and diversification of our portfolio, and investment in talent.
Drew Hardin: The most exciting highlight in the past year has been Monteith adopting an Employee Stock Ownership Plan (ESOP), meaning the company is now 100% owned by its employees. Every team member sharing in an “owner’s mindset” brings a new level of opportunity to grow and share in the benefits of our hard work. Additionally, this Spring, we officially opened the doors to our Winston-Salem office, the company’s fifth location, and are excited to grow relationships and our portfolio within the Triad region. Over the past decade, the company has maintained an 18% average annual growth rate, and we’re continuing to climb on that trajectory. We have a promising backlog of work for 2024/2025, and locally in the Raleigh office, we’re excited about upcoming projects with Durham Public Schools, Wake Tech Community College, and several private developers in the region.
How has your organization adapted to the current market challenges and economic conditions?
Benford: Our primary strategy has been to diversify our market sectors. Given the challenges in traditional markets like multifamily, where deals are harder to close due to interest rates and inflation, diversification has been crucial to fill revenue gaps. Looking ahead, the next 12 to 18 months will be challenging for the construction industry. Indicators like the Architectural Billing Index, which has been negative for several months, suggest upcoming challenges. Our approach involves understanding and planning for these delays and revenue gaps, ensuring we are well-positioned to handle them.
Hardin: Monteith maintains a well-diversified portfolio of public and private sector work, as well as across industries and asset classes, so our team has a good perspective of how interest rates are influencing development. Over the past year, yes, public projects have moved forward into construction at a steadier rate. And, while we have seen a slight decrease in private sector work—either projects being canceled in full or put on pause—many of our private partners are moving forward with projects with slight changes from the original plan that reflect their modified capital stack.
How are you addressing workforce development and diversity in the industry?
Benford: Developing future construction professionals is a top priority for us. We’re industry leaders in minority- and women-owned business enterprises and diversity and inclusion trade partner participation. Our focus is on economic mobility and capacity building for minority and disadvantaged businesses in the Carolinas and Southeast. Internally, our D&I initiatives are vital. A key achievement this year is our Women at Work employee resource group, which I support as an executive sponsor. This group aims to attract women to the industry, starting from middle school to college, and invests in their development within our organization. We’ve achieved a significant presence of women in our workforce, about 19 to 20%, and are committed to providing an inclusive environment for all.
Another major focus is workforce development in trades. There’s a noticeable gap, with significantly more electricians leaving the industry than entering. Addressing this imbalance is crucial for the industry and our projects. We are actively working on impactful strategies to fill this gap.
Hardin: Monteith has managed to retain and bring in excellent talent for various roles, such as project managers and superintendents, despite ongoing labor concerns. Our approach has always been to welcome skilled individuals from diverse industries and train them to excel in our field. Unfortunately, we have witnessed the impact of labor shortages on our trade partners, which makes it increasingly important to maintain a broad network of partners throughout the Carolinas. I’m optimistic about the efforts made by local community colleges and trade schools- particularly some of Monteith’s partners Wake Tech, James Sprunt, and Cape Fear— to support workforce development and increase the skilled trades talent pipeline. These schools, and many others across the state, are recognizing the incredible opportunity these programs provide the community and its young people, and ultimately, are dramatically helping to support our region’s growth.
What are your team’s key strategic priorities and future goals?
Benford: In the next few years, our goal is to play a significant role in both real estate development and constructing infrastructure that creates spaces for people. With the population and economic boom in the Triangle, we see opportunities to develop schools, healthcare facilities, community spaces, and entertainment areas. These developments will shape the future of the Triangle, providing spaces for families and communities.
Our focus is threefold: enhancing client experience, employee experience, and diversifying our work and profitability. While the specifics under each category might evolve, these three pillars will remain central to our approach. They are crucial for our cultural and operational growth in the coming years.
Hardin: We’re emphasizing technical innovation and sustainability. Sustainable construction is becoming increasingly important due to regulatory changes and growing client interest. We’re committed to promoting it in our construction practices and continuing to find ways to help our clients think big and integrate non-traditional building methods into their projects. In terms of innovation, we’re closely monitoring the AI developments happening across industries and are evaluating our internal processes to ensure they can effectively utilize AI tools.
We’re enthusiastic about the ongoing growth in the Raleigh-Durham region and are excited about partnership opportunities with both new businesses and established institutions alike. We know many of our colleagues and peers share in the forward-thinking mindset we have at Monteith and are excited to be part of the region’s continued growth story.
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