Sean Ouellette, Chief Operating Officer, Kast Construction

Sean Ouellette, chief operating officer of Kast Construction, spoke with Invest: about navigating market changes in the South Florida market. “There is a lot of wealth and investment coming into Palm Beach, and it has all of the runway and characteristics to be a great city.”

What changes have affected Kast Construction the most over the past year and in what ways?
The last two years have been interesting for our industry, in our market and nationally. The macroeconomics of our industry have played a big part, especially with interest rates, the political climate, and general market changes. Two years ago, we saw multifamily starts slowing drastically, which was a big part of our business. In the past year, we’ve seen a big shift to condominium for-sale products. The luxury condominium space is in high demand, and Palm Beach has been a great place for that. We’re surrounded by uncertainty with tariffs, and projects take a lot more work to underwrite today compared to years ago. In spite of these challenges, we are seeing an overall positive sentiment in the market.

What projects and industries are driving growth, demand, and profitability for Kast Construction?
Our core markets have historically been condominium, multifamily, and hospitality. Although multifamily is down as a whole, we have seen an uptick in our Miami market. We signed four multifamily deals this year so far, which is a good indicator. Condominiums are still strong, especially on the high-end luxury side. Our focus has been state, local, and educational (SLED) facilities, and we see a big pipeline in that work with the in-migration coming to Florida and Palm Beach County. We see future development growth within infrastructure and higher education resulting from in-migration.

What is your overview of the construction industry in West Palm Beach and South Florida in terms of trends or market dynamics?
The market is cautiously optimistic, and many are taking a wait-and-see approach due to the uncertainty. It’s not just for construction, but for our development partners. Uncertainty keeps investment on the sidelines, and there is a lot of pent-up demand. We feel positive and believe that a few things will go our way and clarity in the market will have a significant impact on the industry. For example, lowering of interest rates will certainly have a positive effect on the market and maybe enough to entice investment and projects to move forward in due time. We’ve seen the threat of tariffs being implemented, but we haven’t seen many impacts in costs. The market, in general, wants deals to happen. The volatile political climate is playing a big part, but as that settles down over the rest of the year people will be able to put a stake in the ground where they want to invest. Palm Beach is one of the best markets in Florida, and there is a lot of interest in investment and growth here.

What are the primary challenges facing the construction and development sector in Palm Beach and South Florida, and how is Kast Construction navigating these?
Uncertainty is the biggest factor, with interest rates and macroeconomics being a big part of the equation. There is still demand in the luxury condominium space despite a slowing in velocity of sales. There is also the market of resale with older condominiums, and there’s a disparity between those products in the marketplace. It’s hard to predict where to go but it feels like the new construction market is still strong. The construction labor market in Florida is always strained, and we could see an impact in the labor market due to ICE activity and an increase in deportations. Our strategy is to align ourselves with clients who have the capability to be top sponsors in projects that lenders and investors will rally behind. On the subcontracting side, we align ourselves with those who can overcome challenges in the labor market and supply chains.

What factors make Palm Beach an ideal location for Kast Construction, and how does it differentiate from other markets?
The main markets we are in are Greater Tampa Bay, Miami, and Palm Beach. They are all great markets and although Florida has been cyclical, Palm Beach has a great energy around the city and more interest in investment. Miami is a great market, but there’s a lot of competition. There is a lot of wealth and investment coming into Palm Beach, and it has all of the runway and characteristics to be a great city.

What are some strategic advantages that differentiate and set Kast Construction apart from its competitors in the region?
We are in a people business, and it’s very important that we take care of our people and our customers. That comes with a higher level of service. We get involved in big, dynamic projects that are difficult to underwrite and build. Taking something from a pro forma to a finished product is hard work and takes a whole team. We pride ourselves on providing a high-touch, high level of service to support our clients and give their projects the attention they deserve. Our focus on everything we do is quality, from preconstruction to closing units. We set a high standard for ourselves and for the industry.

Where are opportunities for growth for Kast Construction in the local construction and development industry?
There is opportunity for expansion into the SLED space. Along with the influx of residential projects, there is opportunity in infrastructure and commercial projects. Another sector of focus is building recertification. With new state laws requiring 40-year building recertification, there is a new, untapped market to recertify buildings throughout the state. That will be a big part of our growth plan over the next several years.

What is the importance of ensuring high-performance, reliable, and durable development practices to ensure better and safer quality construction?
It is critically important. Another big headwind in the market is insurance. The insurance sector in Florida, as it relates to condominium construction, is expensive and litigious. Providing a high quality, resilient product in those markets has always been important, and has been a major driver in our focus and attention on quality. The clients and designers we work with are focused on continuously improving the product they offer which result in more durable and resilient buildings. We are always looking for better products and practices to be cost effective and increase durability, quality and safety.

How is Kast Construction leveraging technology and innovation, such as smart and LEED buildings, in its construction and development operations?
Smart technology, in terms of the design and end product, is driven by the market and what the developers want to provide to their clients. Where the technology supports the construction process is in planning. We invest heavily in technology and are constantly testing new software to make us more efficient. Investment in technology helps us get better to leverage our people’s capabilities to make complex processes easier and more streamlined. Technology helps with virtual design, modeling, scheduling, and planning techniques. Through these software programs, we have a lot of data to enhance our business analytics side of the business operation to make faster decisions. We are excited for the future of technology in our industry and see the leveraging of AI tools being a game changer in terms of making our business and industry more streamlined and efficient.