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May 12, 2016

Survey: Lease Crutcher Lewis

Photo courtesy of Lease Crutcher Lewis [enlarge]
Troy Block will reuse facades from two historic properties: Troy Laundry and Boren Investment Block.

Specialty: General contracting and design-build for commercial, institutional and residential projects

Management: Jeff Cleator, president; Bart Ricketts, chief executive officer

Founded: 1886 (moved to Seattle in 1939)

Headquarters: Seattle

2015 revenues: $507.2 million

Projected 2016 revenues: $550 million

Projects: Two office buildings on Seattle’s Troy Block for Touchstone and USAA; West Seattle YMCA; 168-unit Luma Condominiums on First Hill in Seattle

Jeff Cleator, Lease Crutcher Lewis president, answered questions from the DJC about what’s happening at his firm and in contracting overall.

Q: What are the biggest issues in your industry?

A: We find ourselves in a strong real estate market with significant growth opportunities for most everyone. But managing that growth well is essential. There is a real tendency for companies to bite off more than they can chew, compromising their performance and customer service. Opportunistic profits should be secondary to caring for your core customers. It is times like this that we are thankful for the business relationships we have fostered over 130 years in the Northwest.

Q: In which sectors are you seeing growth or a slowdown?

A: Some of our developer clients are becoming more cautious and unwilling to build as much on a speculative basis. Aside from this, we are still seeing strong growth in most all sectors of our business including office, multifamily, healthcare, biotech, technology, aviation, hotel, retail and education, with a good mix of tenant improvements, renovations and new construction.

Q: Are rising costs and the skilled labor shortage affecting your firm?

A: We pay close attention to construction cost indices. Not only do they help us estimate accurately for our clients, but they can be a meaningful leading indicator for when the market may peak. At some point, construction costs become too high and projects can no longer yield a reasonable return on investment. Creativity, lean delivery, strategic purchasing and leveraging strong business relationships become increasingly important to get projects to “pencil.”

As far as skilled labor shortages, people are definitely being stretched, but that’s not necessarily bad. There are a lot of professional growth opportunities. As I think about my own career, I grew the most during the times I was outside my comfort zone.

Q: Is there anything clients want that they didn’t a decade ago?

A: There will always be pressure on construction budgets and schedules as owners strive to increase margins and differentiate their products. Owners today are increasingly sophisticated consumers of construction services, analyzing the entire value proposition rather than just low fees. There is increasing acceptance of integrated delivery concepts, getting firms out of their silos and working closely together in order to create efficiencies and reduce waste.

Q: What’s something unusual you’ve worked on recently?

A: One job that definitely fits this description is the historic renovation of Union Stables for our own office. Being the landlord, tenant and contractor created some interesting dynamics and trade offs. In the end, we couldn’t be more proud of how it turned out.

The design beautifully preserved the building’s historic character exposing the original structure and repurposing over 127,000 board feet of timbers for flooring, benches, stair treads and furniture. The shell is LEED gold and the office improvements are LEED platinum. Our grand stair features a map of nails, 2,000 40d nails to be exact, to depict regional geography with blue nails highlighting Lewis projects. In many ways, the building reflects who we are as a company — local, innovative, sustainable and collaborative.

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