|TOP COMMERCIAL BUILDERS|
|COMPANY||2008 COMMERCIAL CONSTRUCTION REVENUE|
|1||California Pools Inc.||$27,000,000|
|4||Van Kirk & Sons Inc.||$9,374,145|
|5||Patio Pools & Spas||$5,200,000|
|7||Paddock Pools and Spas||$3,650,000|
|9||Aqua Pool & Spa||$3,000,000|
|10||Mission Valley Pools & Spas||$2,860,000|
Companies with separate commercial divisions saw their investment more than pay off in the last year.
In fact, some of the larger firms on this list entered the commercial segment a long time ago as a way to stay diversified.
“We’ve been doing commercial pools for about 30 years,” says Ryder Steimle, CEO of California Pools in West Covina, Calif. “We’ve found over the years that they trend differently, so residential may be down, but commercial stays up. Then as residential bounces back, commercial trends down.”
But unfortunately, builders are beginning to see this market tighten as well.
Private and government funds are drying up, and while some companies have several jobs moving down the pipeline, fewer are in the start-up phase.
“There’s quite a bit of work on the books,” says Bruce Dunn, president of Mission Pools in Escondido, Calif. “It’s not like the marketplace has bids going every week, but there is a fair amount of that that has already been funded and put in place. I’d say they were probably in the development process before it got as tight as it is right now.”
But this hasn’t stopped pool companies from entering the commercial market in an effort to compensate for lost residential revenue. These newcomers are causing established firms to feel the pinch as more and more businesses compete for a smaller commercial pie.
“Developers are [getting bids from] these guys,” Steimle says. “And sometimes it takes longer for them to sort through all the companies, so it just kind of muddies up the process.”
In turn, the more established commercial companies have begun to go after markets that they had left alone in the past.
“We weren’t as aggressive about getting business before,” says Jim Cich, CEO of Paddock Pools and Spas in Scottsdale, Ariz. “That’s changed. In this environment, you have to be going out after every possibility. Some of that is going after a wider geography than before.”
The lower-tier semi-commercial projects, such as condominium and apartment complex pools, are drawing the most new bidders. These jobs are fairly simple and fall well within the scope of most builders new to this segment.
Large-scale commercial pools and waterscapes are more immune to this new competition, since they require that the builders be bonded. However, some of those projects are now being sought after by out-of-state contractors, at least in Southern California, both Dunn and Steimle report.
But there are some bright spots on the horizon for the commercial market.
“I was surprised to see so many hotels and motels expand out,” says Don Cesarone, general manager and vice president of the commercial division of Van Kirk and Sons Inc., based in Deerfield Beach, Fla. “They’re looking for waterparks, [with] wet deck areas for the children to play in, with little fountains and features.”
In addition, work continues in bringing commercial pools into compliance with the Virginia Graeme Baker Pool and Spa Safety Act.
Finally, more resorts are beginning to show an interest in green technology as a way to attract customers who want to be environmentally responsible, says Tim Van Kirk, vice president and CFO of Van Kirk and Sons, Inc. And, like the residential market, he expects things to pick up as soon as credit loosens.
“The renovation of hotels and some projects that have been in planning are going to come back alive,” he says. “I think they’re there — they’re just waiting for some of the financing to loosen up.”