Hyman goes far afield to build new business
Conventional wisdom says the construction business is so lousy that its slogan should be "Find Something to Do Until 2002." George Hyman Construction Co. is trying to find a way around that.
Bethesda-based Hyman, a division of the Clark Construction Group, is opening offices in Chicago and in suburban Los Angeles, banking on public-sector business to offer a foothold in those markets by the time the private construction markets recover.
"We consider it an investment," said John Stranix, marketing director at Hyman. "The strong firms will be in a better position when the economy turns around. The recession will result in some of the weaker firms being forced out of the market."
Hyman is already working on major jobs in each city.
It is lead contractor on a $675 million expansion of McCormick Place, Chicago's biggest convention center, and is building a $187 million facility in Chicago for the U.S. Postal Service and a new $106 million suburban headquarters for State Farm Insurance.
In Los Angeles, the company is expanding another convention center and building a water treatment plant. The California office, in Irvine, will serve an eight-state area as far north as Alaska.
Mr. Stranix said the company doesn't expect much work in either city from the private sector right now. Chicago entered the recession later than many eastern markets and is expected to recover only after the East recuperates, he said. Other observers have said the same thing about the California market, especially Southern California.
The expansion doesn't change the fact that Baltimore-Washington is the company's biggest market, Mr. Stranix said.
Ground is broken at UM medical school
The public sector's dominance of big-time construction isn't limited to California or Illinois. It's much in evidence right here in Charm City, as Monday's groundbreaking for a new building at the University of Maryland School of Medicine illustrated.
Gov. William Donald Schaefer, Mayor Kurt L. Schmoke and other politicos showed up for the ceremony for Phase 1 of the $50 million Health Sciences Facility, an 86,000-square-foot research and teaching space at Redwood and Pine streets. Phase 2, another 100,000 square feet of space with a $60 million price tag, is on the drawing boards.
"If Phase 2 goes through as well, that will put us ahead of some of our peer institutions," said medical school spokeswoman Victoria Strittmater.
Michael Conte, director of the University of Baltimore's regional economic studies program, said the health sciences building is the largest new construction project in the area. Although private commercial construction is still in the doldrums, money is available for such institutional projects because the state made a commitment during the late 1980s to upgrade the university.
"The university has cut back tremendously on the operating expense side," Mr. Conte said. "Capital expenses are financed by debt and don't have to come out of the current portion of the budget."
Ms. Strittmater said a state decision on funding construction of Phase 2 isn't expected for a couple of years.
Scotsman Buildings sets sights overseas
Scotsman Buildings of White Marsh sees another way to beat the slowdown in domestic construction -- expand overseas.
The maker of modular buildings is joining a venture to sell modular homes in foreign countries, especially Russia, spokeswoman Mary Lou Jay said.
"It gives us new possibilities," she said. "There's a need over there that we can really see."
Scotsman already gets about 10 percent of its sales from overseas. But until now, overseas efforts have focused on commercial buildings such as magnetic resonance imaging centers in Germany and a modular liaison office the company built for the U.S. State Depatment to use in Angola.
Overseas opportunities include helping Russia enter the modern housing era, creating field camps for oil drillers, and building temporary quarters for United Nations personnel around the world, Ms. Jay said.
"Modulars are really good at getting buildings [completed] in a hurry."
Officials of Scotsman would not disclose their partner in the overseas venture. And there was no word from the company on how many units it can sell early on.
"I think it's kind of 'Let's see what happens,' " Ms. Jay said.
New apartment boom may be coming
After years of watching office developers and home builders be the most celebrated people in real estate, the humble apartment building owner may get his due in the 1990s, a new report from Ernst & Young and the National Multi-Housing
"Rental housing, like office, warehouse and retail, experienced excess capital and overbuilding in the 1980s, followed by decelerating demand," the report said. "Yet apartments, as a consumer product, are in a fundamentally more competitive position than other property types.
"Continued decreasing supply and growing demand point to an impending undersupplied market that will decrease vacancies, increase rents and raise prices in the near term. All these factors indicate that apartments . . . may well provide the highest return on real estate investment this decade."