Interview: Kerri Smith, Vice

Kerri Smith

Vice President - Southeast Region Baker Concrete Construction

What were the major successes for Baker Concrete Construction in 2020?

Any company that made it through 2020 should consider that a major success. As a small part of the construction industry, we feel very fortunate to be able to continue operating. The pandemic has presented us with many challenges but these challenges also created opportunities. As a leadership team we had two options, we could shy away from the spotlight that was thrust upon us or we could use that spotlight to really look at who we are and the value that we bring to our coworkers and clients. We had to make a decision quickly and chose to do so through the lens of our core values of People, Honor, and Grit. It was inspiring to see us all roll up our sleeves, come together and live in those values. Facing these challenges wasn’t about financial business decisions, it was about protecting the essential men and women on our front lines, the carpenters, laborers, and project teams. Our greatest success in 2020 was navigating the crisis, staying true to our core values and becoming better as one.

What is your outlook for Baker Concrete Construction?

The 2021 outlook is very positive. Both internally and externally, we are seeing a shift toward growth. Numerous economic trends are pointing to the overall growth of the economy. The construction market is typically at the tail end of economic growth but recent movement in the market and pent-up demand will push us into new opportunities beginning midyear. Our portfolio mix has shifted, which we view as a good thing as long as we remain agile enough to take advantage of it.

One positive that has emerged from the crisis, is that we have been forced to slow down, rest, pivot and adapt to doing business in a new way. This reflective period has allowed us to double down on our core ideology and strategies. We want to continue to focus on being the concrete experts that are here to support our clients and communities through People, Honor, and Grit.

Despite supply chain and cost challenges, the construction industry remains a solid source of job growth in the county.

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Landscape More than 5,900 companies make up Broward County’s construction industry cluster, accounting for approximately 60,000 jobs, according to CareerSource Broward. From laborers, plumbers, carpenters and electricians to heating and air conditioning professionals and solar installers, the local construction workforce is as dynamic as the projects going up in Broward County. Recent 2021 job reports show promise of a robust rebound for construction jobs in the state as well as Broward County. As of April, the construction industry had created more than 29,400 jobs, posting 5.5% growth, throughout the state of Florida, according to the Florida Department of Economic Opportunity. In the same month, more than 2,800 construction jobs were created in Broward County, the most in the South Florida area, CareerSource Broward reported. In comparison, Palm Beach County posted approximately 2,200 jobs while Miami-Dade and Monroe counties collectively saw approximately 800 jobs created.

As the industry recovers, the performance of the construction sector runs parallel to that of real estate

in relation to residential, commercial and industrial trends. A hot housing market and increased demand for industrial properties given the rise of e-commerce have carried the development and construction sector in Greater Fort Lauderdale throughout the pandemic. These market forces are expected to drive the bulk of construction demand in the near future.

Broward County saw total home sales surge to 103.9% year over year in April 2021. Single-family home sale transactions were up 80.9 % in April while condos transactions increased 126.9% year-over-year, according to the MIAMI Association of Realtors®, creating opportunities for homebuilders and developers seeking to meet consumer demand. Conversely, there are over 1.8 million square feet of industrial construction happening across the county as of 1Q21, Cushman & Wakefield reported, with 64.2% of the space slated for delivery by the second half of the year. According to the brokerage, all of these industrial projects underway are speculative, pointing to Broward County’s ability to attract these types of tenants.

Residential A key consensus across industry leaders is the acceleration of trends already present in the South Florida market prior to March of 2020, namely the increased migration of new residents from high-tax and high-density states settling in the South Florida region. Double-digit increases in home prices have been the new normal throughout the South Florida market since the start of the pandemic, driven by record-low inventory figures and equally low interest rates. Constrained monthly supply of single-family inventory has been commonplace in the local market since July of 2019, according to the MIAMI Association of Realtors®. As of the start of 2021, available inventory of single-family homes throughout South Florida had dwindled to two months, indicating a seller’s market, the association reported.

The lack of inventory, coupled with attractive interest rates, creates a perfect storm for bidding wars and price surges. As of April, the median list price of homes in Broward County was approximately $350,000, trending 16.6% higher year-over-year, according to REALTOR. com. Cash transactions have been widely popular with buyers seeking to differentiate themselves from competitors and Broward County is attracting its fair share of buyers comfortable with buying residential properties via cash transactions, topping national figures. Cash sales represented 38.9% of Broward County closed sales in April 2021, compared to 27.8% in April ( )