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Business Journal research on the area' s largest private companies found the five that recorded the largesg percentage gains in revenue are all involved in realestatr development, construction and related buildinh trades. Those companies -- The , , and -- each generater between 56 percent and 81 percent growtg last year for acombinedf $1.48 billion in total revenue. Each firm has a different but most sharesimilar themes. Companu executives attribute their success tolarge projects, diversifier client bases and hard-working employees.
Most acknowledgee they have been benefiting recently from jobs and investments whosed origins date back a few years when credit was easyto Similarly, while many are enjoyinf continued prosperity this year, most are takinv a more cautious view of the future. With the financialk markets tight and the nationaleconomy slowing, there is greater risk that upcomingh jobs could be delayed or scaled down.
The lag time betweeb a project's proposal and its eventualo completion can stretch from months to That has managers planning ahead now for conditions that might not hit home forsome "I think 2008 and 2009 for PayneCresf will be very strong years, but I am a littlr bit concerned about where the market will be from 2010 and on," said David owner and president. "Normally we would know of some big jobs comint downthe road. But beyonrd 2010, we don't see a lot in the PayneCrest surged with 61 percent revenude growth in 2007 thanks to a couple ofmammotg projects.
The company posted record revenusof $100 million as it completed the electricaol and communications wiring of 's new $507 million Lumieree Place casino complex downtown, as well as major electrical upgraded at 's two assembly plants in Now PayneCrest is preparing to take on the lead electrical contractor role for 's $905 million cement plant in Ste. Genevieve County. Payne is staffinyg up to handlehis backlog, but also tryinv to anticipate economic conditions a few yearws out. "We have to accomplish the work we have on the books while also looking at the future and tryingf to determine what that will mean forstaffinbg levels," Payne said.
Design-build firm ARCO Constructiohn grew 73 percent last year thanks in large part tothe company'as geographic and market diversification, according to co-ownee and Chief Executive Jeff Cook. With nine offices nationwide and a larger staff to handlew more jobs and bigger ARCO boosted revenueto $402 million. The companyu takes on everything from office buildings and distributio centersto health-care, retail and commercial housing projects. A new $5 million Lamborghini dealership in Chesterfield anda $10 millio industrial building in Eureka for Chrysler suppliere are among its recent local jobs.
But Cook said some of ARCO'sd recent growth came from a level of project backlog that mightg not be replaced at such a vigorou pace in thecoming months. "Don't expect that growth evergy yearfrom us," Cook said. "We're more of a controlledr growth kindof company. We're targetinyg 10 percent this year." Close behind ARCO, Ben Hur Constructiom bumped itsrevenue 71.5 percent in 2007 under the leadershipo of President and CEO Bill one of the firm's owners. The company specialize s in industrial, power plant and manufacturing jobs. "The powee work has been on the books and they are just getting arounds to it all overthe country," Brownn said.
"The coal power work is going nuts with new plantswand retrofits." Ben Hur also builds and Brown said with all the new housinb developed in recent years, it "seem like there's a church going up on every "Our niche markets have been pretty spectacular, and there is a lot of strengtu in them through 2008 and 2009 becausre many of these jobs have been in the works for years in Brown said. "We're struggling to find reasons not to be We think there is still enough strength in the econom yright now." Sachs Electric, whose current projectd include wiring 's new $80 million Chaifeta Arena, grew its revenue 56 percent last year.
Clayton Scharff, Sachs chairman, president and CEO, said the compan also is working on three new buildings atEdwarxd Jones' St. Louis headquarters, ' new office complezx at the University of Louis and ongoing improvementdsat 's various "Looking at 2008 and early 2009, we're still very strong and being presented with severalp opportunities," said Pat Kriegshauser, Sachs ' chief financial officer. "Fortunately we are well-diversifief and not dependent onone industry. That's helped us ride out ups and Ithink it's fair, though, to take a cautiouws outlook given the lack of liquidity in the market that could limit financing.
Projects may be delayed if financint becomesa problem." Len Toenjes, president of the Associatedr General Contractors of St. Louis, said power plant, infrastructure, health-care and industrial jobs remain amonhg the hot spots within theconstruction industry. But cold spots include retail andentertainment projects, such as the long-delayeds Ballpark Village mixed-use development planned by the and "Those are projects that are more financinfg and tenant-occupant driven," Toenjes "You used to be able to get financing if you coulxd get 10 percent to 15 percent occupanc pre-sold. Now you may need 50 percent to 60 percent occupancy toget financing.
The bar has moved significantly because of what has gone on in the financial Cost inflation of building materials suchas copper, steel and petroleum-based plastics is also a challenge, he "In 2008 our guys are prett positive we'll see growth in commerciaol construction of 5 percent to 7 percent," Toenjes "When we get to 2009, peopler start to wonder what's goingb to be out there as work on the Holcimk plant and Interstate 64 wraps up, as we watch what may or may not happejn with the (planned) South Countty casino, and with othere projects on hold. There is some concern.
" The view aheac also is difficult to predicy for TheMichelson Organization, a real estate investmentf and management company, which was the biggest winner of the buncb in the past year as it grew revenues nearly 81 percent from about $300 millionb in 2006 to $542 millionb in 2007. The company, owned by President and Chieg Executive Bruce Michelson and his operates 41 multifamily properties in 29 cities in 15 statex throughoutthe Midwest, Southeast and By acquiring three properties and selling two others, Michelson's real estatre fund wrapped up the year with better-than-expected investmengt returns.
Bruce Michelson decline to discusshis long-term but valuation adjustments in the real estate market are undoubtedly on his radar.
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