Commercial construction companies projected to stay busy in 2016…

2015 was a terrific year for H.W. Holmes Inc. and other commercial contractors. The economy is on an upswing. This has resulted in more large-scale and ground-up commercial construction projects that have us incredibly optimistic for 2016. Here are some commercial construction trends to watch for this year.

Local & Regional Restaurant Groups Will Open More Locations

National restaurant chains have always been a source of work for commercial contractors. But expect to see more local and regional restaurant groups grow their brand and branch out from their original core business model. We expect to see more local restaurant companies expand their presence in the Southern California region. People in the region have more disposable income for dining and entertainment. This has many culinary entrepreneurs opening up new locations outside of their original geographical focus.

Senior Housing Construction Expected to Rise

Baby boomers are retiring every day, which means demand for senior housing is at an all-time high. This not only means new senior communities are being built, but existing facilities are upgrading to match the features and amenities of new senior centers. This increased competition has commercial contractors getting calls for not just new ground-up senior housing construction projects, but also large-scale renovations and cosmetic updates at existing senior centers.

Labor Shortage Means Higher Constuction Costs & Other Challenges

While it’s great that we and other Southern California commercial contractors are benefitting from an influx of work, the bad news is many contractors scaled down their labor force when the economy nosedived. Since the recession, a number of skilled laborers have left the industry. Young people entering the workforce are more tech savvy than blue-collar or handy, which has the construction industry struggling to appeal to younger workers. This has resulted in a shortage of skilled and experienced construction workers. Additionally, increased immigration controls have migrant workers remaining in Mexico.

Needless to say, such a shortage presents its share of problems at a time that’s busier than ever. Commercial construction companies are much more cautious when it comes to project selection. Their bids are on the high-end and they’re only taking jobs they know they can handle and complete on-time given the labor shortage. Many commercial contractors in Ventura, Los Angeles, and Santa Barbara are even declining work or convincing prospective clients to delay their projects until off-season.

Green Commercial Construction Still Trending in 2016

Environmentally friendly buildings will continue to be in demand. Not only do companies want to boast about their green building, they’re also looking for ways to increase energy efficiency and reduce utility bills. In addition to LEED (Leadership in Energy & Environmental Design) certification, the WELL Building Standard focusing on human health and wellness factors will also be sought out.

Adapting and Reusing Existing Urban Commercial Structures Will Become More Popular

Rising labor and new construction costs have more companies looking to adapt or reuse existing commercial buildings – particularly preserving historic buildings in urban areas to secure tax credits.

Entertainment Districts Will Continue to Be Popular

Real estate developers have recognized that there’s money in entertainment districts where packages of restaurants, bars, theaters, retail, and late-night venues drive traffic and feed off each other.