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Compass Points® Q1 2018 Market Survey

Compass Points Q1 2018

Cover Article By Howard Friedman, CCIM

While driving around the southeast industrial area to survey buildings for our Compass Points® newsletter, I noticed an unusual amount of ‘Now Hiring’ signs posted in front of businesses in the area. It should come as no surprise to locals that the construction industry and its related trades are in a very dynamic and busy time. But it is also a very challenging task for the industry to keep projects on time and on budget.

At the recent Central Oregon Builders Association breakfast, SunWest Builders President Steve Buettner discussed the labor shortage in the area. He talked about the need to pay his subcontractors well and on time, a sentiment echoed by Sage Builders President Mark Huffman. Both Buettner and Huffman are involved with the Bethlehem Inn homeless shelter’s two-phase project currently underway on north Highway 97 in Bend to completely rebuild the facilities. Huffman serves as the Inn’s “owner’s representative,” a volunteer position designed to be the liaison between general contractor SunWest and the Inn. “It is a challenge to find and keep good sub[contractor]s,” Huffman noted at a recent OAC (owner, architect, contractor) meeting at the Inn. “And with construction material and labor costs on the rise, it presents a real challenge for owners to stay within their budget.”

Steve Hendley, Managing Partner of Compass Commercial Construction Services (CCCS) added that it is important to have an identified group of subs loyal to the team, as the competition is fierce for quality workers. “To foster responsiveness, we make sure that our subs are paid in a timely manner, often well in advance of our billing cycle. This means we pay our subs first then are reimbursed by the owner. When subcontractors perform for us in this environment, we feel a responsibility to provide excellent service to them in return, similar to how we treat our clients. It all goes back to the company’s core values.” Dale Hendley, project manager with CCCS, says the labor market is so tight “Contractors are pulling subs from as far away as Seattle who are looking for a different environment to work in.”

Bethlehem Inn’s rebuild has been a smooth project, according to Executive Director Gwenn Wysling. “Even in this highly competitive construction market, SunWest has stayed extremely close to their time schedule and budget, even taking into account the rising costs of material and labor over the last three years of planning and building. We expect to get the keys on June 11th to the first building, which will house ten families, (double our present capacity), our service hub and support service, and for the first time ever, a commercial kitchen!” So far, the community has helped to raise $7.5 of the $9 million dollar campaign. With this great community support, Phase 2 will start soon and is scheduled to be completed at this time next year, expanding services for single adults experiencing homelessness.

Howard Friedman is a partner and principal broker at Compass Commercial and currently serves as vice-president of the Bethlehem Inn board of directors.

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Compass Points® is a quarterly publication of Compass Commercial Real Estate Services offering comprehensive surveys of the Central Oregon commercial real estate market. The report provides a detailed look at quarterly vacancy and absorption data in office, retail and industrial product types throughout Bend’s primary submarkets, as well as the Redmond industrial market. Absorption data contained in the report pulls from samples of buildings over 3,000 sq. ft.