The Harold E. Eisenberg Foundation

Annual Program Book 2015-2016

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41 G eneral contractors are encour- aged by a gradual uptick in commercial construction activ- ity across the Midwest, ranging from the development of new facilities in the healthcare and higher education sectors to the construction of ofce and industrial buildings. But the combina- tion of a small pool of skilled workers, stif competition and unsteady pricing for materials continues to present chal- lenges. Many skilled workers who were laid of during the Great Recession went into other industries to make a liv- ing. "Our national data shows that the commercial construction industry has only recovered about 30 percent of the 2 million jobs it lost in the Great Reces- sion," says Dave Bangasser, president and CEO of Minneapolis-based Opus Design Build LLC. "Activity is con- tinuing to pick up, but it's not uniform across all markets or product sectors." Scott Wittkop, president of the cen- tral division of St. Louis-based Mc- Carthy Building Cos., says the current shortage of skilled labor is one of the biggest challenges confronting the in- dustry. "The cause is twofold. Those tradespeople who left the construction ranks during the recent recession are not coming back. Secondly, there are not enough new individuals deciding to enter the trades to replace those that are retiring," says Wittkop. The average age of a tradesman con- tinues to rise, Wittkop notes, based on data from human resource consulting frm ManpowerGroup. In 1985, the av- erage age of a tradesman was 36. By 2008, the average age had risen to 40, and today it is approaching 44. (The Virginia Manufacturers Association's defnition of a skilled tradesman — the defnition used by ManPower to arrive at those fgures — encompasses 21 particular occupations.) ManPower projects that by 2020, about 25 percent of the construction workforce will be over the age of 55, up from approximately 20 percent to- day. Wittkop says one solution is to build alliances between local chapters of the Associated General Contractors I n 1957, Anthony Sansone Sr. launched his St. Louis-based commercial real estate company with two employees — one to answer the phone and the other to help him generate business. He's come a long way over those 57 years. Through hard work and perseverance, Sansone and his four sons have built the company into a full-service frm recognized nationally. Today, the Sansone Group has ofces in Missouri, Kansas, Arkansas, Tennes- see and Florida and manages more than 20 million square feet of retail, ofce and industrial property in 14 states and more than 5,000 residential units val- ued in excess of $2.5 billion. The original staf of two has grown to include more than 220 employees. The 88-year-old Sansone Sr. recalls his determination to break into the com- mercial real estate business. "It was a new business, you had to prove yourself Plans New Industrial Complex Planned in Columbus page 12 Millennials Spark Rebirth of KC's Downtown Multifamily, Offce Markets page 18 Speculative Building Is Back In Some Ohio Industrial Markets page 19 INSIDE THIS ISSUE G e n e r a l c o n t r a c t o r s a r e e n c o u r - a g e d b y a g r a d u a l u p t i c k i n c o m m e r c i a l c n s t r u c t i o n a c t i v - i t y a c r s s t h e M i d w e s t , r a n i n g f r o m t h e d e v l o m e n t f n e w f a c i l i t i e s i n t h e h e a l t h c a r e a n d h i g h e r d u c a t i o n s e c s t o t h e c o n s t r u t i o n o f o f c e a n d i n d u s t r i a b u i i n g s . B u h e c o m b i n a - t i o n o f a s l l p o o l o f s k i l l e w o r k e r s , s t i f c m p e t i t i o a n d u n s a d y p r i c i n g f o r m a t e r i a l s o n t i n u e s t o p r e s e n t c h a l - l e n g e s . M a n y s k i l l e d w o r k e r s w h o w e r e l a i d o f d u r i n g t h e G r e a t R e c e s s i o n w e n t i n t o o t h e r i n d s t r i e s t o m a k e a l i v - i n g . " O u r n a t i a l d a t a s h o w s t h a t t h e c o m m e r c i a l u c t i o n i n d u s t r y h a s o n l y r e c o v e r e d a b o u t 3 0 p e r c e n t o f t h e 2 m i l l i o n j o b s i t l o s t i n t h e G r e a t R e c e s - s i o n , " s a y s D a v e B a n g a s s e r , p r e s i d e n t a n d C E O o f M i n n e a p o l i s - b a s e d O p u s D e s i g n B u i l d L L C . " A c t i v i t y i s c o n - t i n u i n g t o p i c k u p , b u t i t ' s n o t u n i f o r m a c r o s s a l l m a r k e t s o r p r o d u c t s e c t o r s . " S c o t t W i t t k o p , p r e s i d e n t o f t h e c e n - t r a l d i v i s i o n o f S t . L o u i s - b a s e d M c - C a r t h y B u i l d i n g C o s . , s a y s t h e c u r r e n t s h o r t a g e o f s k i l l e d l a b o r i s o n e o f t h e b i g g e s t c h a l l e n g e s c o n f r o n t i n g t h e i n - d u s t r y . " T h e c a u s e i s t w o f o l d . T h o s e t r a d e s p e o p l e w h o l e f t t h e c o n s t r u c t i o n r a n k s d u r i n g t h e r e c e n t r e c e s s i o n a r e n o t c o m i n g b a c k . S e c o n d l y , t h e r e a r e n o t e n o u g h n e w i n d i v i d u a l s d e c i d i n g t o e n t e r t h e t r a d e s t o r e p l a c e t h o s e t h a t a r e r e t i r i n g , " s a y s W i t t k o p . T h e a v e r a g e a g e o f a t r a d e s m a n c o n - t i n u e s t o r i s e , W i t t k o p n o t e s , b a s e d o n d a t a f r o m h u m a n r e s o u r c e c o n s u l t i n g f r m M a n p o w e r G r o u p . I n 1 9 8 5 , t h e a v - e r a g e a g e o f a t r a d e s m a n w a s 3 6 . B y 2 0 0 8 , t h e a v e r a g e a g e h a d r i s e n t o 4 0 , a n d t o d a y i t i s a p p r o a c h i n g 4 4 . ( T h e V i r g i n i a M a n u f a c t u r e r s A s s o c i a t i o n ' s d e f n i t i o n o f a s k i l l e d t r a d e s m a n — t h e d e f n i t i o n u s e d b y M a n P o w e r t o a r r i v e a t t h o s e f g u r e s — e n c o m p a s s e s 2 1 p a r t i c u l a r o c c u p a t i o n s . ) M a n P o w e r p r o j e c t s t h a t b y 2 0 2 0 , a b o u t 2 5 p e r c e n t o f t h e c o n s t r u c t i o n w o r k f o r c e w i l l b e o v e r t h e a g e o f 5 5 , u p f r o m a p p r o x i m a t e l y 2 0 p e r c e n t t o - d a y . W i t t k o p s a y s o n e s o l u t i o n i s t o b u i l d a l l i a n c e s b e t w e e n l o c a l c h a p t e r s o f t h e A s s o c i a t e d G e n e r a l C o n t r a c t o r s I n 1 9 5 7 , A n t h o n y S a n s o n e S r . l a u n c h e d h i s S t . L o u i s - b a s e d c o m m e r c i a l r e a l e s t a t e c o m p a n y w i t h t w o e m p l o y e e s — o n e t o a n s w e r t h e p h o n e a n d t h e o t h e r t o h e l p h i m g e n e r a t e b u s i n e s s . H e ' s c o m e a l o n g w a y o v e r t h o s e 5 7 y e a r s . T h r o u g h h a r d w o r k a n d p e r s e v e r a n c e , S a n s o n e a n d h i s f o u r s o n s h a v e b u i l t t h e c o m p a n y i n t o a f u l l - s e r v i c e f r m r e c o g n i z e d n a t i o n a l l y . T o d a y , t h e S a n s o n e G r o u p h a s o f c e s i n M i s s o u r i , K a n s a s , A r k a n s a s , T e n n e s - s e e a n d F l o r i d a a n d m a n a g e s m o r e t h a n 2 0 m i l l i o n s q u a r e f e e t o f r e t a i l , o f c e a n d i n d u s t r i a l p r o p e r t y i n 1 4 s t a t e s a n d m o r e t h a n 5 , 0 0 0 r e s i d e n t i a l u n i t s v a l - u e d i n e x c e s s o f $ 2 . 5 b i l l i o n . T h e o r i g i n a l s t a f o f t w o h a s g r o w n t o i n c l u d e m o r e t h a n 2 2 0 e m p l o y e e s . T h e 8 8 - y e a r - o l d S a n s o n e S r . r e c a l l s h i s d e t e r m i n a t i o n t o b r e a k i n t o t h e c o m - m e r c i a l r e a l e s t a t e b u s i n e s s . " I t w a s a n e w b u s i n e s s , y o u h a d t o p r o v e y o u r s e l f P l a n s N e w I n d u s t r i a l C o m p l e x P l a n n e d i n C o l u m b u s p a g e 1 2 M i l l e n n i a l s S p a r k R e b i r t h o f K C ' s D o w n t o w n M u l t i f a m i l y , O f f c e M a r k e t s p a g e 1 8 S p e c u l a t i v e B u i l d i n g I s B a c k I n S o m e O h i o I n d u s t r i a l M a r k e t s p a g e 1 9 I N S I D E T H I S I S S U E Good actions give strength to ourselves and inspire good actions in others. — Plato www.REBusinessOnline.com We are dedicated to THE HAROLD E. EISENBERG FOUNDATION in their tireless efforts to fght gastrointestinal cancer and save lives a m m c i a l c o n t r u r o s s t h e M w e t , r a n g i e d e v e l o p m e n t o f n e f a h e l t h c a r e a n d h i g h e r e d e c t o r s o t h c o n s t r u c t f o f u s t r i a l b i l d i s . B u t t h c o o n o f s m a l p o o l o f k i l e d w c o m e t i o n n d u s t e a d l s c o t i n d w e G d u s i o n a l a l c o n s t r u c t 3 0

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