Domestic prospects dry, architect looks offshore

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Architectural firms can be a leading indicator for the construction and real estate markets, as the design process is typically the first stage in a project’s development.

“We get phone calls every day from contractors asking us what we have going on,” said RTA Architects President Randy Thorne.

By this metric, and by Thorne’s account, the prospects for a 2011 recovery in the real estate sector are gloomy at best. RTA is the largest architectural firm in Colorado Springs, although Thorne said that his company has shed almost 50 percent of its staff since late 2008.

RTA is down to 31 employees from a high of 60.

“Most of our drop has been because there are no large projects in the area. The projects we’re getting are very small and limited in duration,” he said. “We worked on St. Francis (Hospital) for three years, but now our projects are only scheduled-out for two or three months. We have to hope to bring in a group of seven or eight projects instead of that one big one.”

Thorne said his industry has suffered along with the rest of the market because of political uncertainty.

“A lot of companies put a lock on their money as they waited-out the election,” he said. “We still

have to wait and see where tax breaks are headed, but if they go through, hopefully we’ll start to see some of that money that has been buried away.”

In 1985 Thorne merged his company with a friend’s architectural firm; the merger lasted and the two are still partners. While nationwide the architectural industry has benefited from increased merger and acquisition activity this year, Thorne doesn’t expect much of that to trickle down to the Springs.

“If it happens at all it will be on a onesy-twosy basis. Firms here just don’t have the backlog that would make them attractive to buyers,” he said. “Instead of acquiring to become larger, things really should be going the other way. Without the bigger projects, firms are looking to get down as low as they can. I think we’re a good-sized company for this market right now.”

In the search for work, local firms are looking outside of the Springs, outside of the state, outside of the country, and in the case of RTA, outside of the hemisphere.

Over the past few years, RTA partner John Holesher has been on several church mission trips to Vietnam to work with children in need of medical attention. Through interactions with doctors in the area, he realized the need for improved medical facilities in the country. After lecturing to a university on Western medical architecture, he was approached by a private investor about the possibility of designing a hospital just outside of Hanoi.

“We were happy to help, so we made the 34-hour flight out there,” Thorne said. “We finished the preliminary design package just a few weeks ago; we’re just waiting to get the go-ahead now.”

Working on a project of this scope presents some unique challenges for RTA.

“They’re sending one of their young architects out here for two weeks. He’ll help us translate the drawing package and schematics (into Vietnamese),” Thorne said. “The hospital will be a mix of Eastern medicine and Western culture. We put together a book for him to teach him about some of the critical areas.”

Whatever challenges RTA faces, it will be worth it. Thorne estimates the size of the project at 500,000 square feet, and the value at $3 million to $4 million.

That’s about the size of the St. Francis Hospital RTA finished in 2008.

Apparently you can still land boom-sized projects in 2010; you might just have to go to Vietnam to get them.

Leases and contracts

Ted Link of Cascade Commercial Real Estate continues to find success in the medical industry. This month he leased his third space in the North Pointe building at 6005 Delmonico Drive. Dr. Robert Vogt will be renting 4,657 square feet for his family practice. Earlier this month, Cascade leased 6,300 square feet to Colorado Springs Imaging in the same building.

And the local presence of Ford Motor Credit Co. won’t be going anywhere, thanks to Grubb & Ellis agent Michael Palmer. Working with Marty Johnson of CBRE, Palmer renewed the 86,900 square foot office space at 9930 Federal Drive for the financial arm of the carmaker.

Finally, according to the Pikes Peak Region project permit listings, Northgate Self Storage LLC hired Springs-based Executive Custom Construction for a $3.5 million build-out at 791 Copper Center Parkway.

Jonathan Easley can be reached at jonathan.easley@csbj.com or 719-329-5235. Find him on Facebook or Twitter.