Contractor’s Solutions For CRE Uncertainty: Realistic Expectations, Early Involvement

The commercial real estate industry has been working overtime to make up for pandemic-driven delays, but labor shortages, supply chain delays and other costly setbacks have been standing in its way. Ben Walker, chief operating officer at Clune Construction, believes now is the time for contractors to go above and beyond to get the job done while setting realistic expectations for their clients. 

“The advice I would give to any of our clients in any of the market sectors we serve is to really adjust your project timelines,” Walker said.

Walker, who started his career as an intern with Clune more than 20 years ago, says the congestion in the market today is unprecedented in his experience.

In addition to shortages of materials from cement to lumber, many construction stakeholders are dealing with their own unique challenges. Architects are in high demand to design workspace configurations to help clients bring employees back to the office and local governments are overwhelmed with permit requests. 

“The overall process to build out a single floor from start to finish may now take longer than it did a year ago because of all of these other factors,” he said.

In response, Clune makes a practice of getting involved early on in a project to come up with solutions to challenges before construction begins. This has always been the company’s preferred way to manage projects, but the 2021 environment has added urgency to this approach.

“We can help a client value-engineer things ahead of time, so they don’t get that initial sticker shock from the hard bid,” Walker said.

Working closely with clients has been part of the company’s DNA since it was founded by Mike Clune in 1997, with an emphasis on performing tenant improvements. Clune looks at every job as a partnership, whether it is a negotiated bid or a hard bid.

“Once we’re awarded a project, we don’t consider ourselves the contractor; we consider ourselves an extension of the client,” Walker said. “We partner with them, their vendors and anybody that's integral to the project. And we understand not just what the project is, but also their other ancillary needs and concerns.”

Clune Construction credits its base of loyal clients for its growth from a modestly sized tenant improvement contractor with two regional offices to a player in six major regions across the country. Over the years, clients have encouraged Clune to follow them to new cities and apply its skills to market segments beyond TI.

Today, the GC has more than $1B in projects under contract, supported by offices in Chicago, New York City, Dallas, Los Angeles, San Francisco and Washington, D.C. Clune takes pride in helping clients through good times and bad. Now, even as it contemplates further expansion, the company is working to navigate the scheduling disruptions caused by Covid-19. 

According to Walker, clients’ needs are always the No. 1 priority for Clune. This is the exact approach that has enabled the firm to expand nationwide.

“We never went into a new market simply thinking, ‘Let's go there because it's a good opportunity to make money,’” he said. “It's always been because a client asked us to go there numerous times to work on their projects or multiple clients asked us to go.”

Clune continues to eye expansion, particularly in the Southwest, where construction is increasingly active. Walker said Clune’s geographic diversity has been a boon for the firm during the coronavirus pandemic. While tenant improvements took a hit in markets like New York and Chicago, the company was sustained by its expertise in constructing data centers as well as facilities for the entertainment industry on the West Coast.

He credits Clune’s clients — a large percentage of whom are repeat clients — for introducing it to those two growing markets, just as clients have brought the company into new regions for the past two decades.

“Between government contracts and the need for everything to be digitized, the data center market doesn't seem to be slowing anytime soon. It’s the same with entertainment,” Walker said. “But I think the tenant market as a whole across the country is going to take a little bit longer to recover. It will probably be two or three more years before it gets back to even pre-pandemic level.”

In the meantime, Clune will keep following its best practices of empowering the next generation of leaders and mentoring new employees. That kind of internal support has enabled Clune to perform at its peak for clients and continue to grow across the country.

“By giving our employees the tools and support they need to succeed, we can then be successful for our clients,” Walker said. “We have a real hands-on, collaborative team environment here.” 

This article was produced in collaboration between Studio B and Clune Construction. Bisnow news staff was not involved in the production of this content.

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