Michael Kaufman, CEO, Kaufman Lynn Construction
Michael Kaufman, CEO of Kaufman Lynn Construction, spoke with Invest: about adapting to uncertainty in the market during a period of extended regional growth. “We are shifting our multifamily emphasis to condominium construction, an area of growth for us. We are looking at geographical refocusing and slight pivots within our current markets.”
What is the state of commercial and residential construction at the moment?
Everyone is frozen right now due to the tariff turmoil. I can’t even guess what it will be like if the tariffs go away. All the headwinds are stacking up against commercial real estate development. Interest rates are higher than they’ve been in four or five years, making it more difficult for projects on the commercial side. Rental rates have peaked and some niche areas are dropping. We’re also going to see large impacts to supply chains. Companies manufacturing in other countries are not going to send their products until the trade war settles down.
What services and sectors are driving the most growth?
Public sector work is healthy. K-12 schools, public safety, public administration, and parks and recreation are all strong sectors across South Florida. We are finishing the Dental and Medical Technology Services building for Palm Beach State College’s Loxahatchee campus, a state-of-the-art educational dental and allied medical facility for dental technology. We are looking at a number of hotels in Palm Beach County, and condominium construction is strong. The multifamily rental market has slowed, but the high-end condominium market is very active.
To what extent is Kaufman Lynn Construction committed to sustainable practices?
Sustainability has worked its way into building design permanently. Every one of our projects is designed with strong sustainability, mandated through code revisions that have become mainstream over the past ten years.
What is the importance of providing high-performance building products to ensure better and safer quality construction?
The South Florida code requirements have incorporated those requirements since Hurricane Andrew. They become more stringent and every few years there are new amendments to the code. Recent code changes have impacted HVAC the most. As codes evolve, buildings become safer, more structurally sound, and more resilient.
How has Kaufman Lynn Construction benefited from greater interest in the South Florida region in recent years?
Being a housing builder, we have to modify which subsector we operate in because of the shortage of housing. One example is shifting in emphasis from large-scale rental apartment projects to more boutique, high-end condo projects because that’s where the activity is. The influx of new residents to Palm Beach County has been wonderful over the last 10 years and has been a great boom for the county. It has supported our business because over 50% of our business is in housing.
How is Kaufman Lynn Construction working to provide durable, efficient, and affordable housing options?
We support several initiatives that invest heavily in determining how to effectuate affordable housing at a larger scale, or support affordable construction through Habitat for Humanity.
Are there any markets or areas of opportunity that you’re looking to expand into?
We are shifting our multifamily emphasis to condominium construction, an area of growth for us. We are focusing more intently on regions outside of Palm Beach County, including Miami-Dade County. We are looking at geographical refocusing and slight pivots within our current markets.
What are some strategic advantages that differentiate and set Kaufman Lynn Construction aside from other competitors in the region?
We have two key differentiators. The first is we are diversified in product types we build. We are only one of a few contractors in South Florida that has penetration into the private multifamily and commercial side, as well as the public sector. There are substantial differences in how the projects in private and public are funded, and they tend to be complimentary, especially during slowdown. The second differentiator is that we are an employee-owned company. We have over 200 associates, and they are all owners. They deploy an ownership mentality which is reflected in our products.
What is your medium-term outlook for Kaufman Lynn Construction?
Our primary goal is executing generational succession within the business. We spent two years in a well-orchestrated program of executive leadership training with a large swatch of associates in the company, from relatively new associates as well as individuals who have been with the company for 20 years. We want to have the next set of leaders emerge from these training programs, and we are proud of the work they have done. Kaufman Lynn will be in good hands for many years to come.
