Centrepoint Builders

Source: Construction Digital

Date :21/11/2007 11:27:02

Building a new style

Taking a different approach has led to dramatic growth for Centerpoint Builders Ltd. as David Gunderson explains

Written by Ruari McCallion and Produced by Chris Culkeen

As one of the fastest-growing states in the Union, Texas offers plenty of opportunity for construction companies, whether they’re large or entrepreneurial. But opportunity does not, in itself, explain growth at the rate of expansion enjoyed by Centerpoint Builders Ltd. It has been tripling its revenues annually over the past three years – which means those revenues are now 27 times their level in 2003/4. OK, you may think, but where did they start from? Anyone can triple revenues from a one-dollar base.

That’s true but Centerpoint is a multi-million dollar company, with projects under its belt ranging from NexBank’s Galleria branch in Dallas, Texas, through United Way’s regional headquarters, also in Dallas, to US Bioservices headquarters and clean rooms in Dallas and Los Angeles, CA, and the US Secret Service and US Dept of Education regional headquarters.

David Gunderson, AIA, founded Centerpoint, having first set up Durango Project Management LLC in 1999. For four years, Durango acted as a private label project management company, providing services under the banner of the commercial real estate brokers it represented.

It handled construction management for the largest office lease transaction in Dallas in 2000 for Locke Liddell & Sapp, and McAfee/ Network Associates’ build-to-suit project in 2002, the city’s most prestigious such transaction at that time. Durango is now a general partner of Centerpoint Advisors. It could be that some light is shed on the company’s ongoing success by considering what Gunderson was able to do for Network Associates. His analysis for the client – confirmed by a PricewaterhouseCooper audit – saved the company over $1.2 million a year, compared with the previous leasing commitment.

“We are not a typical contractor,” said Gunderson. “We undertake a lot of negotiated and representative business and we’re into the building long-term relationships with our clients. While we do bid against other contractors for selected projects the majority of our work is negotiated directly with clients to help them to get the best value.” But business tends to go out to multiple bidders in order to get what they see is the lowest price. Gunderson maintains that’s not the best approach.

Adding value early

“We add so much value at the front end,” he said. “Rather than rely totally on the architect’s information, we use our own in-house team of architects to value engineer. Centerpoint is about finding faster, cheaper and better ways to build projects.” While that may sound like a great idea, businesses do tend to be wedded to the ‘lowest bid’ approach. Those marriages in haste often end up in not-so-leisurely repentance.

“Between two-thirds and three-quarters of business in Dallas is competitively bid,” he conceded. “That usually ends up in variations and change orders, which elevate project costs way above the original offer. What we can do is go back to the client and show them quantitative savings in areas they didn’t think were possible. For example, most architects understand design but they don’t understand the cost of implementation. We can show that, if you do something this way rather than that, you can achieve exactly what you wanted while saving money.” As the Network Associates experience showed, those savings can add up to a lot of money. And the sooner Centerpoint gets involved, the better.

“If we get involved at the architectural stage, before electricals, HVAC and services have been settled, we can offer very helpful input. In some areas, even if plans are already 100 percent done, we can still go to customers and offer effective changes, which will still save far in excess of any immediate cost implications,” he said.

At the early stages, it’s sometimes a question of simply knowing the marketplace properly. “There are two ways of constructing retail buildings in Dallas: steel frame or concrete filled wall. Depending on commodity prices, the advantage oscillates back and forth between the two. For example, we have been involved with a retail project that was originally designed as concrete tilt-wall. We were able to show the client they could save $100,000 by switching the structural system to steel.”

Triple reassurance

Centerpoint is experienced in all aspects of construction. As such, it provides three distinct services: design/build; construction management; and general contractor. Each division does pretty much ‘what it says on the can’: design/build takes on responsibility for all aspects of design, budget, and construction, contracting directly with the architect to develop drawings and then building the project for a guaranteed maximum price, providing the client with a single point of contact. As an architect-led design/builder, Centerpoint naturally places heavy emphasis on the design phase, designing-in cost and time savings and sorting out problems before they arise. As a construction manager, the company oversees the whole project on behalf of the owner, from conceptual planning through to completion.

As a general contractor, the company takes responsibility for all the trade work under a single contract. The owner and its consultants direct the design process but Centerpoint will still offer suggestions throughout the project.

“We’ve been very successful in keeping a good stable of subcontractors available. We treat them fairly, pay on time and do what we say we’ll do. It’s a two-way street: we expect the same consideration in return,” said Gunderson. “I believe our subcontractors like working with us; they know we won’t discard them for the sake of a few dollars. We get dependability, as an important client, and if we need something challenging or urgent done, we know we can rely on them to get the job done.” One of the biggest challenges facing a company that’s growing exponentially, as Centerpoint has been, is control. It’s well in hand.

“The great secret of our success is our people – our staff have been very loyal. Without that stability and loyalty, we couldn’t have grown at the rate we’ve achieved,” he said. “We are tripling our revenues but not the number of projects. What we’re doing is larger and more complex undertakings. We are adding people but one of the keys to our success is that our partners stay very involved with our end product; we don’t have three layers of management between the field and decision-makers.” Going forward, Centerpoint expects to continue to grow and branch out, primarily within its home state.

“We learned before and after 9/11 that we were too dependant on the technology sector and office finish-out and that market disappeared in a heartbeat. We’re now more diversified and undertook more retail work during 2007. In 2008, we will be more involved with multi-family projects,” said Gunderson. “We have undertaken projects outside Texas when our clients have asked us to but our home state is a huge market. There’s plenty of work here; we’re more likely to open an office in Austin than in Boston.” ¬