Joe Furey, CEO, Michael Graves Architecture

In an interview with Invest:, Joe Furey, CEO of Michael Graves Architecture, highlighted how they have grown four to five times in revenue through strategic acquisitions, how they continue to balance the firms’ boutique-style client relationships, and why, despite economic challenges, they remain optimistic for project activity.

Reflecting on the past year, what have been the most significant milestones or achievements for Michael Graves Architecture?
There are two key aspects of growth in our business: one is projects, and the other is corporate development. Projects focus on what we deliver to our clients, while corporate development, where I spend most of my time, involves acquisitions of other firms. Let me address projects first and then dive into the corporate growth side.
On the project side, the number and variety of projects have grown significantly due to our acquisitions. For instance, we have some incredible clients, including government work with the Architect of the Capitol in Washington, D.C., covering much of the Capitol complex. These projects are highly confidential, so we cannot share details about them. Similarly, we are working on cutting-edge projects in Saudi Arabia’s Neom and Qiddiya, which also remain highly confidential. We are also collaborating with Disney on an exciting project, which is also highly confidential. Disney will manage all press releases for it. These projects reflect the caliber and innovation of our team, even if they are not yet publicly visible.

How have acquisitions impacted Michael Graves Architecture & Design’s ability to deliver and innovate project design specifically?
Since 2022, we have closed six acquisitions, launched an organic startup in Charlotte, North Carolina, and are about to finalize a seventh acquisition in California and Chicago. The six acquisitions and the startup are fully integrated into our company, including systems for HR, payroll, IT, and accounting. This integration ensures that we operate as one cohesive company rather than as separate entities. To manage this growth, we have built a strong team, bringing in a COO, CFO, marketing specialist, and resource manager. These roles, alongside existing team members, have been instrumental in integrating these acquisitions and supporting our overall growth strategy.

In terms of scale, these acquisitions have been transformative. Since 2022, our size has increased four to five times. With the upcoming acquisition, we will grow to approximately 170 people, up from about 35 employees before the first acquisition. This is a remarkable expansion in just a few years.
Our first acquisition was Walden Studio Architects, a firm specializing in multiple building types, with offices in Baltimore, Columbia, MD, and Washington, D.C. We consolidated the Maryland offices into one. The second acquisition was Jose Carballo Architectural Group, based in Hackensack, New Jersey, specializing in multifamily projects and hospitality. This acquisition expanded our presence in the New Jersey and New York markets, enabling us to take on projects we previously could not.
The third acquisition was PGN Architects in Washington, D.C., and the fourth was Walter Robbs in Winston-Salem, North Carolina. Walter Robbs specializes in K-12 education, higher education, and large athletic facilities, and PGN in multi-family and mixed-use projects. The fifth acquisition, The Parallax Team, was a technology-focused firm specializing in Revit software, which is widely used by architects and engineers. This firm not only continues to serve its clients but also helps us integrate Revit across all our acquisitions.
The sixth acquisition was Studio Four Design in Knoxville, Tennessee, which works on a variety of projects, including athletic facilities and churches. The upcoming acquisition in California involves a firm that has shifted from luxury single-family homes to larger hospitality projects. This addition will strengthen our hospitality team by bringing in 18 people.

The result of integrating these acquisitions into Michael Graves has given us more depth in various sectors, a broader client reach, and diversity of design.

What is the strategic vision behind these acquisitions, and how have they contributed to Michael Graves’s impact on the region?
The strategy is to bring in smaller firms with specific expertise and integrate them into the Michael Graves brand. This approach allows us to expand our portfolio while leveraging the brand’s reputation. For example, with Jose Carballo’s team, we can now take on multifamily projects in New Jersey under the Michael Graves name, which was not feasible before. Our industry is still highly fragmented, with many small firms and only a few large ones. By consolidating smaller firms with great talent, we aim to grow into one of the top firms in the industry while maintaining a boutique feel and intimate client relationships. This balance is critical to our model. We manage these firms as individual business units for accountability, but will preserve their boutique nature and client relationships. Our model is designed to avoid becoming a massive, impersonal firm. Even our smallest acquisition, a six-person team, brought exceptional talent and has been a perfect fit for our culture.
Each acquisition undergoes thorough vetting, not just for design capabilities but also for alignment with our strategy. Over the past five years, we have reviewed over 300 companies, carefully selecting those that align with our goals. This rigorous process ensures that the firms we bring in enhance our capabilities and vice versa. The equity growth and valuation of the company have exceeded expectations. While I was conservative in my initial projections, the actual outcomes have been better than anticipated. The acquisitions have added significant value, both in terms of expertise and financial performance, setting us up for continued success.

What is your impression of the real estate market today, and what role do you see mixed-use development playing in creating a more connected urban space?
Historically, Michael Graves did projects worldwide, with only a handful in New Jersey. Our current volume of projects in New Jersey has increased significantly through the acquisition of Jose Carballo and his work, as well as some amazing projects out of our Princeton office. Jose’s focus has been on high-quality, multifamily, hospitality, and mixed-use developments. Over the past year, we have seen a major slowdown in project starts and even paused projects due to the economy and interest rates. In the last several months, there have been three reductions by the Federal Reserve, totaling one point. This has sent a positive message, and we have started to see some movement. If there is another reduction, projects may pick up significantly. We are cautiously optimistic that early this year, some projects will break free, get on the boards, and begin construction.
Construction and real estate development often mirror the economy. We are also involved in public projects, such as New Jersey public schools. For example, we are currently working on a school in Trenton. Additionally, we have completed other projects like a restaurant in Morristown and work with Rutgers University in New Brunswick.

From your perspective, what are some of the top challenges that your team faces within the industry, either from a labor, cost, or another standpoint?
The biggest challenges are the interest rates and the economy. When times are tough, money does not move. If projects are not happening, billing and payments are delayed, which impacts us directly. About 85% of our company’s costs are related to people, including salaries, benefits, and healthcare. We cannot sustain operations if clients do not pay. The diversity brought by acquisitions has helped us navigate these challenges over the last few years. The one-point reduction in interest rates has provided some relief, and if rates drop further, we expect more projects to move forward.
Currently, we have 170 employees. As work increases, we may face a shortage of dozens of people. This is a good problem to have. We plan to address it through acquisitions, recruiting from schools, and hiring young talent. Managing people effectively as we grow is a critical focus. For instance, we have upgraded our accounting system and hired a resource manager to align people with projects. These systems ensure that we manage supply and demand efficiently.

What are Michael Graves’s top priorities for the next two to three years, and how do you envision your projects contributing to New Jersey’s identity?
We are not slowing down on acquisitions. From 2021 to the end of 2024, we have grown four to five times in revenue. We are currently evaluating several acquisitions. Initially, we focused on smaller deals involving 10 to 25 people. Moving forward, we aim for larger deals involving 50 to 100 people. This will result in bigger growth and opportunities, which enhances business valuation. Over the next four years, we plan to focus on larger acquisitions. We are also preparing for our first private equity partnership within this timeframe. This partnership will enable us to scale further. A decade from now, we anticipate another private equity cycle, which will help us recapitalize and provide significant monetization opportunities for our shareholders. The goal is to create a sustainable business that offers career paths for younger employees. This ensures the company’s longevity and provides growth opportunities for those who stay with us long-term.