Three Things To Know About San Diego Construction

Construction's rebounded in a lot of other SoCal markets, but what about San Diego? (Why do other markets get to have all the fun?) Things are a little tougher here. C.W. Driver’s Ryan Stichler tells us why.

1) Too Many Contractors, Too Few Deals

The market is oversaturated with competition, Ryan says. With the sequester, military and government opportunities have decreased, creating more competition in other market sectors, and contractors are having to learn how to work with lower fees to be competitive. Recently, C.W. Driver tapped Ryan to be director of project development in its San Diego office; he previously was in a similar rainmaking position at Kitchell.

2) Creeping Construction Costs

Labor costs have been relatively stable, but Ryan expects them to rise due to increases in the cost of living, benefits, and minimum wages. Fortunately for SD contractors, the area has a large qualified subcontractor community, and so it isn't difficult to find subcontractors, Ryan notes. Snapped: the Storm and Nasatir Halls complex at the San Diego State University campus, which C.W. Driver completed earlier this year. The project included a 100k SF renovation and a 30k SF expansion of the 1950s complex.

3) Materials Costs Headed Upwards

Mostly, material prices have flattened out compared with the previous 18 months, “but we expect them to rise as the economy improves and the demand increases,” Ryan says. Currently, steel prices aren't changing much, but drywall has been increasing slightly. Copper and lighting materials are harder to predict (isn’t that just like that trickster, copper?)