MacKenzie Contracting Company Successfully Navigating Challenging Environment
Full-service general contracting company, currently celebrating 35-year anniversary, reports the most robust construction management backlog in the history of the company
A perfect storm has enveloped the general contracting industry over the past two years – both nationally and locally – driven by escalating construction materials and labor costs, a rising interest rate environment and a noticeable new project slowdown in certain asset classes, led by the commercial office sector. Despite these many challenges, MacKenzie Contracting Company, the construction arm of Lutherville, Maryland-based The MacKenzie Companies, has generated the largest construction backlog in the history of the company, with overall construction volume to increase approximately 45 percent this year. Featuring a team of 35 employees, MacKenzie Contracting Company is celebrating its 35-year anniversary in 2023.
“With many companies and its employees embracing remote or hybrid work arrangements, there has been a dramatic decrease in the volume of commercial office construction but, in the Baltimore-Washington, D.C. region, this has been offset by robust activity in the medical/healthcare, education, retail and senior living categories,” explained Marty Copsey, who has functioned as President/COO of the company since 2001. “We are extremely lucky to be operating within a geographic area that is so economically diverse, with drivers including tech companies, medical institutions, higher education and the federal government. The most challenges issues we currently face is learning to navigate the new normal with regard to longer lead times for materials, unpredictable pricing and labor shortages.”
As hospital operators continue to push services closer to the communities they serve, Copsey expects to see the need for more outpatient facilities, especially in the suburban areas. Certain neighborhood shopping center projects, struggling to fill vacancies caused by failed operators, are targeting medical uses due with the promise of free parking, locations near major highways and access to consumers. “Diagnostic and behavioral health facilities, together with urgent care practices, can relieve the strain on emergency room traffic, and patients are looking for healthcare options near their homes to bypass visits to the main hospital campus,” he added.
Initiating the procurement process earlier helps with unpredictable situations
Copsey adds that, although supply chain issues have improved dramatically from conditions one year ago, he still advises end-users to start the procurement process earlier to avoid delivery issues and to take advantage of present-day pricing. “Delivery schedules for items such as air handling units or electrical panels can be widely unpredictable, so it always makes practical sense to order high-demand materials such as these as soon as possible,” Copsey said. “On-going communication with the customer, as well as anticipating problems, is always the key in avoiding potential delays.”
More than 97 percent of revenue attributed to third-party work
Although owned by a full-service company which has developed its own real estate portfolio, more than 97 percent of current revenues are derived from third-party work. Notable projects completed by MacKenzie Contracting Company include Cross Street Market, which underwent an $8.4 million redevelopment in 2019, the Under Armour Brand House in Harbor East, numerous Starbucks Coffee stores, and multiple assignments for healthcare-related groups such as Johns Hopkins Health System and Luminis Health.
Among the most challenging was the construction of the 130,000 square foot Brigade Sports Complex for the United States Naval Academy which included an Olympic-sized ice rink, six indoor tennis courts, a fitness center and ten locker rooms and a driving range. Completed in 2007, the multi-use facility required several miles of underground refrigerant piping, with only three vendors between the United States and Canada available to provide sub-contractor services.
MacKenzie Contracting Company is the construction arm of The MacKenzie Companies, which operates six full-service divisions addressing all real estate asset classes including MacKenzie Commercial Real Estate Services, LLC, MacKenzie Management Company, LLC, MacKenzie Capital, LLC, MacKenzie Investment Group, LLC and MacKenzie Multifamily Management, LLC. The company provides customized real estate solutions for institutional owners, investors, private companies and individuals. For additional information, visit www.mackenziecontracting.com.
