For years it seemed as though New Jersey’s demand for industrial spaces — which intensified during the pandemic — would never end. Developers stepped up to build more warehouses throughout the state to accommodate the rise of e-commerce.
That demand has been waning lately, and the industrial sector is coming down from its high point and returning closer to normal. About 6.4M SF was leased in New Jersey in the second quarter, a 25% decline from Q1 2023 and a 28.8% decline from Q2 2022, according to Colliers' second-quarter report.
Lou March, owner and founder of New Jersey-based construction company March Construction, said that the current softening in the Garden State’s industrial sector is a result of rising interest rates and cap rates. Bisnow sat down with March to discuss how the company had contributed to the warehousing boom in New Jersey and why preplanning and maintaining strong relationships with subcontractors are essential to ensure a successful project.
Bisnow: How has March Construction not only adapted but thrived in a changing market?
March: One strategy we've employed is doing joint ventures with our clients. This approach lets us get into the initial stages of planning and construction early on. By doing so, we're able to secure long-lead items.
We can acquire electrical switchgear well in advance, around five to six months before breaking ground. This early procurement is a game-changer for us because it gives us a firmer grip on our schedules. In a joint venture, everyone pools their expertise together from all aspects of construction and development. We work as a team to achieve a shared goal and a better end result.
The construction timeline has also been on our radar lately, especially with the uptick in new lending interest rates. We're honing in on the construction schedule over time, and applying every little strategy that can help us compress that time frame. The quicker the project is, the less interest our clients must bear.
We are working on a six-story industrial warehouse at 23-30 Borden Ave. in Queens, New York. For this project, we rolled out an overtime program. We shaved off several months from the project timeline, and that means carrying a lot less interest. It made a huge difference to our client’s budget.
Our playbook is straightforward: Get everything, from subcontractors to materials, lined up and ready to go. This preparation lets us navigate our construction projects smoothly from beginning to end.
Bisnow: How does March Construction collaborate with clients in the industrial sector? What services do you offer that truly set you apart?
March: We pride ourselves on getting involved early in the development process through our pre-construction services. We helped clients overcome the impact of inflation by working closely with the development and ownership teams and value-engineering their projects, saving a significant amount on construction costs while maintaining the quality of the building.
We have a legacy that spans 38 years in the construction market. Over this period, we've nurtured a strong subcontractor network. A lot of this comes down to always treating our subcontractors with respect. We use our good ties with subcontractors to firm up budgets early and always look for opportunities to make purchases ahead of time.
Bisnow: In an industry where time is money, how does March Construction ensure that its warehouse projects are on time and on budget?
March: Our approach hinges on detailed pre-construction planning. We work closely with clients to understand their requirements early on. We provide clear and accurate cost predictions, setting a realistic financial framework from day one. Our emphasis on value engineering means we find smart ways to save on costs without affecting the project's quality. In addition, we've developed solid communication channels, paired with efficient project management tools, ensuring everyone's on the same page.
Because we’ve spent decades in this business, we've built strong ties with subcontractors and specialists, giving us an edge in timely project execution. If challenges do come up, our risk management strategies kick in, ensuring projects stay on track. In essence, our dedication to planning, collaboration and industry know-how helps us deliver warehouse projects both on time and within budget.
The video below depicts March Construction discussing its recent industrial projects.
This article was produced in collaboration between Studio B, Lou March, owner and founder of March Construction and Briana Samman, Digital Marketing Manager of March Construction. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
