Construction costs in South Florida are still rising, but that doesn’t mean a bad year ahead for the region’s construction companies. Miller Construction SVP Brian Sudduth tells us why.
1) Costs are still rising. Just like in 2014, materials and skilled labor costs will rise, Brian says. High demand is only one reason. More stringent energy codes will also add to project costs, and require more due diligence in the pre-construction phase. Also, a Florida building code revision is due. As code requirements become more stringent, owners will see an increase in the upfront building costs as they install items like insulated glass, LED lighting and high-efficiency mechanical systems to ensure compliance.
2) Demand isn’t slowing. Brian nevertheless anticipates that robust South Florida construction demand of '14 will intensify throughout '15. The Miami-Dade market is leading the way, especially in the residential condo market, which is spurring growth in retail and other markets. Institutional investors are back in South Florida markets in a big way, and their growing presence is boosting industrial construction. Brian, left, is snapped at Gateway Center Doral, a mixed-use project Miller is building for developer DBH Properties.
3) Public development is back. County and city governments with long-delayed projects are starting to spend, Brian says. “That’s shifting the construction industry’s competitive landscape, where it seemed everyone was competing for every job,” he notes, with many contractors who traditionally specialized in public sector work returning to that sector. Broward’s $800M school board bond issue voters approved in 2014, plus the $1.2B bond Miami-Dade approved in 2012 for the school board, will have a major positive impact on the local industry.
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