In the darker days of the real estate downturn, when most asset classes were stumbling, it was a niche in standalone bank branches that helped Hollister Construction Services keep its pipeline full.
That sector has since dried up, but the firm has not skipped a beat. Hollister has grown every year but one over the past decade, thanks to what its founders say is an ability to both pivot and work across all sectors in the construction market.
“Construction is such a dynamic industry that you are forced to adapt and be nimble and deal with challenges on daily basis,” said Kieran Flanagan, co-founder and president of the Parsippany-based firm. “But that's what makes it exciting. And we do it well — that's what enables us to be successful.”
Hollister, which last year marked its 10th anniversary, has built a platform that touches everything from multifamily and refrigerated warehouses to charter schools and medical office space. And that includes a few of New Jersey's high-profile projects, such as Teachers Village, the eight-building, $150 million mixed-use project that is quickly transforming a swath of downtown Newark.
To date, the firm of about 90 employees has completed construction on two buildings for developer RBH Group and is overseeing work at two others at the site. And the project is particularly important for Hollister, which in recent years has actively tried to build its ties to Newark.
NJBIZ met with Flanagan and Hollister project executive David Williams to discuss its work in the city and the region, where it expects to have some $200 million worth of construction activity this year.
NJBIZ: Let's start right here. Why is Teachers Village a good project for Hollister to be working on?
David Williams: It's great to be part of the reconstruction of Newark and the revitalization of Newark, and partnering up with the RBH Group. … That's what it comes down to, and we're extremely proud to be part of that and we'll look to do more work with RBH in their future endeavors in Newark.
NJBIZ: This is a pretty high-profile project. Have you seen it start to pay off when it comes to getting other business?
Kieran Flanagan: We've been consistently working in Newark for 10 years, and we don't see an end in sight right now — there's quite a bit of work. But this is a marquee project. It's nice because it proves that we can build in a tight urban environment (with) tall structures and deal with the city and all of the logistics that go into urban development.
NJBIZ: What about the rest of your pipeline? What does that look these days?
KF: We're very busy in all commercial sectors. We do quite a bit of industrial and refrigerated and frozen storage and distribution centers, as well as apartment buildings, charter schools, corporate interiors, medical offices. So it pretty much runs the gamut.
NJBIZ: Is it typical for a construction firm to be that diverse in the types of asset classes that it works in or is that something that Hollister had to work at?
KF: I think we always wanted to be diverse — for a lot of reasons. It fits our model well. I think it keeps our project managers interested, because they're working on different types of projects. But, most importantly, it has allowed us to not only stay buoyant in the down times — we actually were thriving and growing. We only had one flat year, which was 2008. And we still made money — it was just not as robust as the other years.
So we've grown year over year since 2004 and plan on doing the same in 2015 and 2016.
DW: Diversification allowed us to be flexible in the market, where we're capable of going to different sectors in the market and being able to compete in those sectors.
NJBIZ: Hollister has done more than 30 retail bank branches, which you said helped you thrive during the recession. How did you fill the void after that dried up?
KF: Again, it's just being nimble enough to take advantage of the market. We have done over half a dozen charter schools in Newark and Jersey City. Dave really helps us in industrial.
DW: On the refrigerated warehouse side, we've probably done four or five projects in the last five or six years, and that continues to grow. We're presently doing a 126,000-square-foot refrigerated warehouse in Newark, in the Ironbound section.
NJBIZ: How about the office sector? How has that changed in recent years?
KF: The office market has not been quite as robust over the past 10 years. It's come back, but a lot of it is the smaller (projects). I would say the average is that 10,000- to 15,000-square-foot range. We are seeing some larger ones now coming back to the market.
How has it changed? It has changed quite a bit. It was always perimeter offices and a bullpen of cubicles in the middle. And now it's the direct opposite. It's the perimeter cubicles and internal bullpen of offices. That's probably one of the biggest changes. And then with hoteling and adapting to a younger workforce, they've really changed the office use. There's a lot more huddle space and open spaces for collaboration and (companies are creating) little phone areas and smaller meeting areas so that people both can have an open platform and still get their privacy.
NJBIZ: It looks like medical office and medical real estate are becoming an important niche for Hollister. Tell us more?
DW: To me, that market seems to be expanding now. With the whole medical industry changing, a lot of the urgent care-type places, a lot of the small specialty offices, like endoscopy and others — those types of units are being set up by doctors. And they're not working out of hospitals, and not having a little private practice, but having an emergency room, urgent care setting. That market seems to be something that we're starting to tap into more and more, and the opportunities seem to be rising in that market.
NJBIZ: Can you quantify your growth over the past 10 years?
KF: We've grown pretty much exponentially over the last 10 years. Each year we've grown more and more by doing what we do best, which is really nurturing relationships with our clients and making sure that we're keeping the clients first. And we've had great success where most of our work is, in one way, a referral, either direct or indirect. And I would say that accounts for probably 60 or 70 percent of our work.
So, obviously, we had a goal of establishing ourselves as a brand in the marketplace, and we were successful in doing that. And now we've developed ...a diverse portfolio of some marquee projects in (the region) that we're very proud of.
NJBIZ: Hollister started with just its two co-founders — you, Kieran and CEO Chris Johnson. What can you do now as a bigger company that you couldn't before?
DW: I think it's allowed us to be more flexible and nimble. With the different talent that we have within the company, that gave us opportunities to go harder into markets we were just touching on, but now we can really go after and be confident that we can be successful at it.
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Company: Hollister Construction Services