FOUNDATIONS NEWSLTR JUNE

2023 APRIL MEMBERSHIP REPORT

Membership Total: 402

Retention rate: 93.8%

STAFF

John Eischen, Executive Director

John@RochesterAreaBuilders.com

Shelly Bahlmann, Shelly@RochesterAreaBuilders.com

Golf Outing, Sporting Clays, Home Show, Directory, Newsletter, RAB Update, Member Plus App & RAB Events App

Rebekah Fierst, Rebekah@RochesterAreaBuilders.com

Ambassadors, Awards, Builders, Bags & Brews, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & Remodelers Tour, 40 Below

Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees and Showcase Committee, Website

GOVERNMENT & PUBLIC AFFAIRS CONSULTANT

Rick Dold, Rick@GodwinDold.com

BOARD OF DIRECTORS

PRESIDENT

J ason Scrimshaw, Kimley-Horn & Associates, Inc.

VICE PRESIDENT

Adam Giannini, Knutson Construction

SECRETARY

Jennifer Mitchenll, Edina Realty

TREASURER

Vanessa Hines, Widseth

PAST PRESIDENT

Becky Holmen, Haley Lighting

MISSION STATEMENT

DIRECTORS

Derrick Chapman, Schmidt Carpentry

Adam Kramer, Kramer Contracting

Jarett Jones, Merchants Bank

Aaron Thompson, The Design Connection

Austin Ryan, Ryan Windows & Siding

Kelsey Vaszily, Kraus-Anderson Construction

Melissa Barbour, TLS Companies, LLC

Joe West, Valor Mechanical

Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI) / SBDC

BUILDERS EXCHANGE COUNCIL CHAIR

Katie Reinhart, Kraus-Anderson Construction

COMMERCIAL BUILDERS COUNCIL CHAIR

Keith Kranz, LVC Companies

DEVELOPMENT COUNCIL CHAIR

TBD

REMODELERS COUNCIL CHAIR

Becky Holen, Haley Lighting

40 BELOW CHAIR

Adam Giannini, Knutson Construction

NATIONAL LIFE DIRECTORS

Steve Buss, Cornerstone Builders & Real Estate, Inc.

NATIONAL DIRECTORS

Dana Hlebichuk, Widseth

Levi Kaiser, Benike Construction (Rep)

Todd Severson, TLS Companies, LLC

STATE DIRECTORS

Mike Allen, Mike Allen Homes, LLC

Jay Burke, Heartwood Homes

Jean DeWitz, DeWitz Home Builders, Inc.

Kathy Einck, Maplewood Homes, LLC (Rep)

John McGuine, JM Consulting

John Eckerman, RSP Architects

Kenneth Bush, Bush Companies

The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota.

We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.

FROM THE EXECUTIVE DIRECTOR

the flip side is the presence of some fantastic staff. Elizabeth has the Builders Exchange, website, and other technology well in hand. She will be a steady hand on that wheel. Meanwhile, Shelly is learning how fantastic she is at her own duties. She will be valuable to the new staff as she pretty much knows everything that is going on at RAB. They both know they can reach out to myself or Bekah anytime. As we both will be members who understand the value of RAB, we both have all intentions of making the transition as seamless as we are able. I’d like to thank my boss, current President Jason Scrimshaw, for giving up his newsletter update space for me. The golf outing is next week. You can still register for the 19th hole only and join us for food and networking. We are also still accepting door prizes for the event. Contact Shelly if you have some items. See you next Thursday!

JOHN EISCHEN Executive Director Rochester Area Builders, Inc

Rory Lenton was my first president in 2011. My predecessor had just retired after a 25 year career with RAB and Rory understood that there would be concern from membership. With that in mind, his motto at every meeting of the membership that year was “Change is good, change is our friend.” Rory understood that a change in staff meant opportunity. Opportunity for fresh ideas, new perspectives, and a rejuvenated and active membership. The current changes will be no different. I know Bekah’s departure is surprising to many. She grew up at RAB and has been a constant for 20 years. As her friend, I’m happy she found her soulmate, had a darling little girl, and is focusing on her family. As her boss, I’m glad I got out before she did! Which leads to the opportunity. Your new Executive Director will not have to compare anyone to Bekah. I would have difficulty picturing anyone else in that role. Opportunity. Fresh ideas. New perspectives. On

Rochester Area Builders

2023 Calendar of Events

June 2023

WELCOME NEW MEMBERS

Polytek Surface Coatings

Coltan Rasmussen

Floor Refinishing

507.282.8112

mypolytek.com

SAVE THE DATES!

Builders Sporting Clay Shoot

SEPTEMBER 14, 2023

July 10 Registration Opens

Event Information

Youth Sporting Clay Shoot

SEPTEMBER 16, 2023

May 22 Registration Opens

Event Information

COMMITTEES & COUNCILS

With over 20 committees and 5 councils, there is no shortage of opportunities to get involved with the Association. From planning events, to awarding students scholarships, to participating in community projects, there are many options to choose from. As is often said, “You get out what you put into the Association”.

40 BELOW COUNCIL

This is an active, connected and engaged group of young professionals in the building industry. Through community involvement, professional development and networking events, this group is creating a welcoming atmosphere to cultivate long-term connections both professionally and personally.

COMMERCIAL BUILDERS COUNCIL

The members of this Council are interested in all aspects of commercial and industrial construction. They support one another and provide information to the community.

REMODELERS COUNCIL

The goals of this Council are to provide education for themselves in various areas of remodeling and to promote their expertise to the consumer.

DEVELOPMENT COUNCIL

The members of this Council are interested in the areas of industrial, commercial and residential development. They support one another and provide information to the community.

BUILDERS EXCHANGE COUNCIL

This Council provides access to commercial projects currently out for bid in our area. Members can view plans and

specs in our office and also online at their office if they subscribe to the Plans Online Service. Members also receive the Weekly Bulletin and access to the website, giving them information on posted projects.

Contact Rebekah if you are interested in joining a council or committee.

Thank you Haley Comfort Systems for hosting the April Networking Night. It was a battle of the BBQ with both competitors, Josh and Ben, bringing their A game. It was a close vote, but in the end Ben took home the Trophy with his amazing brisket!

SEPTEMBER 16 - 17 & 23 - 24, 2023

11 AM - 5 PM

The 2023 Fall Showcase will be here before you know it! Get your latest and greatest homes, townhomes, developments, and townhome communities out in front of the public.

DEADLINES:

1st Deadline: July 6 - $200 discount

2nd Deadline: July 27 - $100 discount

Final Deadline: August 17

Entry information can be found HERE

Now’s your chance to advertise to potential homebuyers throughout our area! Sponsorship now available for Fall Showcase of Homes and Remodelers Tour. Contact Elizabeth at elizabeth@rochesterareabuilders.com to learn more.

Remodelers

SEPTEMBER 16 - 17, 2023

11 AM - 5 PM

Do you have a remodeling project you would like to have open to the public so they can see the finished results firsthand?

The Remodelers Tour has been created to offer you this great marketing opportunity. It’s an excellent way to gain exposure for your company and your projects.

All remodelers are eligible to participate, including designers, landscape contractors, exterior contractors, and more.

DEADLINES:

1st Discount Deadline: July 27 - $100 discount

Final Deadline: August 17

Entry information can be found HERE

The

Earlier this month, members hosted students from Kasson-Mantorville High School as part of our job shadow program. These opportunities are always a great way to show the next generation what a career in the trades can offer.

A special thanks to:

Bigelow Homes

The Boldt Company

Briese Iron Works

Continuum Financial

CRW architecture + design group

DeCook Excavating, Inc.

Higgins Custom Cabinetry

IBEW

Pompeii Painting

Rochester Chevrolet Cadillac

Valor Mechanical

WSE Massey Engineering & Surveying

BUILDERS EXCHANGE SUMMER SALE

Bid more and save more with the Builders Exchange Summer Sale! For a limited time, get 10% off a new membership or Plans Online upgrade—up to $85 your first year!

Already a member? Refer a new member to Builders Exchange and get a matching discount when they join. Multiple referrals mean multiple discounts for you—earn up to one year free!

Builders Exchange puts projects for bid at your fingertips. Find projects for bid from all over our area—all in one convenient virtual planroom!

Ready to start? Go to https://www.bexroch.com/join to download an application!

AFTER SCHOOL PROGRAM - PLAYGROUND TO PLAYHOUSE

The Kellogg Middle School students have been working hard over the last couple of months to complete their playhouse to be raffled off to support Family Service Rochester and their Once Upon A Playhouse fundraiser. It’s been rewarding to see how far they’ve come in being more comfortable with the equipment being used and swinging that hammer! They worked very well as a team and are excited for you all to see the finished playhouse at Rochesterfest and all summer long at the Peace Plaza during Thursday’s Downtown. A HUGE thank you goes out to Jay Burke with Heartwood Homes for mentoring and guiding the students throughout the entire build. His patience is like no other.

We greatly appreciate the generous donations from ONB Bank for funding the project and Home Depot for providing each student with their very own set of tools!

LENDING STANDARDS TIGHTEN FOR RESIDENTIAL AND COMMERCIAL REAL ESTATE LOANS IN Q1 2023

BY DAVID LOGAN on MAY 12, 2023

According to the Federal Reserve Board’s April 2023 Senior Loan Officer Opinion Survey (SLOOS)—conducted for bank lending activity over the first quarter of 2023—banks reported that lending standards tightened for most residential real estate (RRE) and commercial real estate (CRE) loan categories. Demand for RRE and CRE loans weakened across all categories over the quarter. No banks expected their lending standards for most loans to ease over the remainder of 2023 and one-third expected more tightening.

Residential mortgage lending standards tightened the most for subprime loans as the net share of banks reporting tighter standards for these loans climbed from 14.3% to 33.3%. Banks also reported substantial tightening for non-QM non-jumbo, non-QM jumbo, QM jumbo, and QM non-jumbo non-GSE eligible RRE loans. In contrast, GSE-eligible (+0.1 ppt) and government (+0.1 ppt) loans each saw a small increase in the net percent of banks reporting tighter standards in Q1 2023 than Q4 2022.

Demand weakened for all RRE loan categories and home equity lines of credit (HELOCs). The net share of banks reporting weaker demand averaged 50.8% across loan categories. While high, it was a large improvement from the 87.4% average in Q4 2022.

Banks tightened standards for all types of commercial real estate loans, on net, though tightening was more widely reported by mid-sized banks than the largest firms. Banks also reported weaker demand for construction and land development loans, loans secured by multifamily properties, and loans secured by nonfarm nonresidential properties.

Banks reported having tightened all the terms surveyed on all categories of CRE loans over the past year. For multifamily and construction and land development loans, a substantial net share of banks widened the spread on loan rates, lowered the loan-to-value ratio, increased debt service coverage, and decreased maximum loan size.

M I D W E S T R E G I O N S P R I N G

F O R U M A W A R D W I N N E R S

C o n g r a t s t o t h e f o l l o w i n g l a d i e s f o r t h e i r c o n t i n u e d d e d i c a t i o n a n d s u p p o r t t o N A W I C . T h e S o u t h e a s t M i n n e s o t a C h a p t e r w a l k e d a w a y w i t h f o u r w i n n e r s :

J o d i W i e m e r s l a g e H

J e s s i H a n s o n B

M e g a n R a m a k e r

T h e B o l d t C o m p a n y

T H A N K Y O U T O O U R T O P S P O N S O R S

ANNUAL SPONSORSHIP GOLF TOURNAMENT

STUDS, STRUTS & ST ETTOS

More photos can be found on our Facebook page

Photography by: Faulhaber Film & Foto, LLC

40 BELOW - PROFESSIONAL DEVELOPMENT

The Essentials to Better Understanding Your Finances

DATE: June 22nd

TIME: 7:30am - 9:00 am

LOCATION: Charlie’s Eatery & Pub

COST: $20 - 40 Below Members

Non 40 Below Members - $30 or Free with Membership Application

Breakfast included.

PRESENTATION WE WILL COVER:

• The importance of goal setting and financial planning.

• The essentials to understanding your financials: budgeting, managing debt & credit, saving and investing.

• Good habits going forward.

PRESENTED BY:

Jodi Hruska, MBA, CFP®, CDFA®, APMA™, Financial Advisor

Connie Williams, APMA™, Financial Advisor

A LITTER BIT BETTER

Once again this spring 40 Below participated in A Litter Bit Better!, an annual event in Rochester where thousands of volunteers work together to scour ditches, parks, waterways and boulevards to pick up tons of trash. Thank you to our volunteers who took time out of their day to clean up 19th Street NW from West Circle Drive to Valleyhigh Drive.

Adam Giannini, Knutson Construction

Marc Kluge, Kimley-Horn & Associates

Jeremy Wohlfiel, Merit Contracting

Dan Horsch, S.E.H.

Thomas Bottema, Premier Bank

Charlie Sweeney, Kraus-Anderson

Rebekah Fierst, Rochester Area Builders

John Eischen, Rochester Area Builders

INFLATION FALLS BELOW 5% FOR FIRST TIME IN TWO YEARS

BY FAN-YU KUO on MAY 10, 2023

Consumer prices in April saw the smallest year-over-year gain since April 2021. This marked the tenth consecutive month of deceleration and the first time the rate has fallen below 5% in two years. While the shelter index (housing inflation) experienced its smallest monthly gain since January 2022, it continued to be the largest contributor to the total increase, accounting for over 60% of the increase in all items less food and energy.

The Fed’s ability to address rising housing costs is limited as shelter cost increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast expects to see shelter costs decline later in 2023.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.4% in April on a seasonally adjusted basis, following an increase of 0.1% in March. The price index for a broad set of energy sources rose by 0.6% in April as the increase in gasoline index (+3.0%) more than offset the declines in natural gas index (-4.9%) and electricity index (-0.7%). Excluding the volatile food and energy components, the “core” CPI rose by 0.4% in April, as it did in March. Meanwhile, the food index was unchanged in April with the food at home index falling 0.2%.

In April, the indexes for shelter (+0.4%), used cars and trucks (4.4%) and gasoline (3.0%) were the largest contributors to the increase in the headline CPI. Meanwhile, the indexes for airline fares (-2.6%) and new vehicles (-0.2%) declined in April.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.4% in April, following an increase of 0.6% in March. The indexes for owners’ equivalent rent (OER) increased by 0.5% and rent of primary residence (RPR) rose by 0.6% over the month. Monthly increases in OER have averaged 0.6% over the last four months. These gains have been the largest contributors to headline inflation in recent months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 4.9% in April, following a 5.0% increase in March. This was the slowest annual gain since April 2021. The “core” CPI increased by 5.5% over the past twelve months, following a 5.6% increase in March. The food index rose by 7.7% while the energy index fell by 5.1% over the past twelve months.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index rose by 0.1% in April.

ROCHESTER BUILDING PERMITS

APRIL 2023

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

OLMSTED

PINE ISLAND BUILDING PERMITS

HIGHEST PAID OCCUPATIONS IN CONSTRUCTION IN 2022

BY NATALIA SINIAVSKAIA on MAY 9, 2023

According to the latest May 2022 Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) and analysis by the National Association of Home Builders (NAHB), half of payroll workers in construction earn more than $54,540 and the top 25% make at least $77,030. In comparison, the U.S. median wage is $46,310, while the top quartile (top 25%) makes at least $73,460.

The OES publishes wages for over 406 occupations in construction. Out of these, only 46 are construction trades. The other industry workers are in finance, sales, administration and other off-site activities.

The highest paid occupation in construction is Chief Executive Officers (CEO) with half of CEOs making over $163,410 per year and the top 25 percent highest paid CEOs earning more than $234,090. Lawyers working in construction are next on the list with the median wages of $156,000, and the top 25 percent on the pay scale making over $213,120. Out of the next 12 highest paid trades in construction, 11 are various managers. The highest paid managers in construction are architectural and engineering managers, with half of them making over $143,420 and the top 25 percent on the pay scale earning over $174,880 annually.

In general, construction trades that require more years of formal education, specialized training or licensing tend to offer higher annual wages. Median wages of construction and building inspectors are $64,070 and the wages in the top quartile of the pay scale exceed $85,400. Half of plumbers in construction earn over $60,070, with the top quartile making over $79,390. Electricians’ wages are similarly high.

Carpenters are one of the most prevalent construction crafts in the industry. The trade requires less formal education. Nevertheless, the median wages of carpenters working in construction exceed the national median. Half of these craftsmen earn over $52,400 and the highest paid 25% bring in at least $68,220.

Among construction trades, elevator installers and repairers top the median wages list with half of them earning over $100,480 a year, and the top 25% making at least $123,020. First-line supervisors of construction trades are next on the list. Their median wages are $74,330, with the top 25% highest paid supervisors earning more than $93,600.

The OEWS program adopted a new estimation methodology in 2021. As a result, the previously published estimates are not directly comparable to the latest 2021 and 2022 editions. Nevertheless, comparing the median wages in construction over the last two years reveals that, on average, lower-paid occupations experienced a somewhat faster wage growth. Median wages of construction laborers, for example, grew 13.3%, while the overall construction median increased 11.1%, one of the largest increases among all industries.

Reach Qualified Customers

Advertise on the RAB Website!

More than 3,000 people visit the RAB website each month, many of them looking for a contractor. Advertise on our site and reach them when they’re primed to buy! Banner ads are available in a variety of locations on the RAB site, from job posts to the contractor directory. Higher tiers come with priority placement in directory search results too. Contact us today to learn how you can start advertising, starting at $299.

Contact Elizabeth Elizabeth@RochesterAreaBuilders.com or 507-282-7698

WEBSITE PROFILE ENHANCEMENTS

Company Name, Address and Phone Number

Links to Website, Address, and Phone

5 Categories

Medium Placement in Search Results

Link to Profile Page

12 Categories

Company Description (200 Characters)

Keywords (240 Characters)

Hours of Operation

Driving Directions

Higher Placement in Search Results

Company Description (1600 Characters)

Keywords (Unlimited Characters)

200 Characters on Search Results

Bulleted List with Hyperlinks

Logo on Profile Page Can Be Added

Search Results Summary (200 Characters)

Profile Page Header Can Be Added

Gold Map Pin

Logo On Search Results Can Be Added

Social Networks Can Be Added

Photo Gallery Can Be Added

YouTube Video Can Be Added

Contact Elizabeth for more information

Exclusive Incentives on your next vehicle available for NAHB Members

This full-line fleet just went corporate.

The Nissan Business Advantage is a one-stop fleet shop for all your corporate needs. With America’s only full-line fleet import brand,* it’s the perfect addition to help your business reach its goals. Get ready to handle all your fleet needs from vans to sedans.

nahb.org/nissan

FOUNDATIONS NEWSLETTER ADVERTISING

Rochester Area Builders Newsletter is an unbeatable opportunity to advertise to members and individuals associated with RAB. It is a source of valuable association and industry information, and is published and emailed monthly. Foundations is sent to over 1600 connected industry professionals. Ad sizes are listed under Display Ad Dimensions, and prices are located above. Ads may be changed from month to month.

Our prices are for full color ads. We will gladly work with you to design your ad. Please send digital files for all ad copy, logos, and artwork. We use PC format. We accept Illustrator and Photoshop files. Convert all fonts to outlines. We also accept the following high resolution file types: .tif, .eps and .pdf (with all graphics and fonts embedded). If you have any other formats please contact us.

RETURN TO: ROCHESTER AREA BUILDERS

Shelly Bahlmann

Shelly@RochesterAreaBuilders.com

108 Elton Hills Ln NW

Rochester, MN 55901

507-282-7698