The Window of Opportunity is Wide Open
These are very unique times. We have not seen an economic downturn of this scale in over 70 years. But for some, the downturn has created an unexpected window of opportunity.
According to Engineering News and Record, construction volume fell by over 30 percent last year and that means contractors and their suppliers are 30 percent hungrier than they were a year ago. On the other hand, most veterinarians are doing okay. In an informal survey of our clients and contacts in the veterinary industry, we found that most veterinarians are holding steady, or have grown 5 to 10 percent in the past year. This means that veterinarians are in a great position to actually gain from the construction downturn.
In the six years before 2008, construction costs grew 66 percent. This means if you built a veterinary hospital in 2002 for $150 per square foot, in 2008 the construction cost grew to $250 per square foot. According to Engineering News and Record, construction costs fell by 9 percent in 2009. Our own experience of real veterinary projects that were rebid after the crash shows that construction costs for these types of projects are down closer to 25 percent.
The majority of contractors predict that commercial construction will be down for another 12 to 18 months. Perhaps now is the time to jump in and take advantage of this unexpected opportunity before the window closes.