Ryan Hekmat has a personal saying scrawled in big, bold letters across his office wall: “Build the best quality of product. Build faster than anyone can. Build at the cheapest price that anyone could ever build.”
“I am so often saying we can never sacrifice one for the other. You have to be all three,” said Hekmat, co-founder and co-managing partner of Bedrock Properties, which acquires, operates, develops and constructs mostly multifamily and office under its Uncommon Developers and Uncommon Builders subsidiaries.
Apparently by paying close attention to this motto, Uncommon Builders rose from No. 18 last year to No. 5 on The Real Deal’s ranking of the top 10 general contractors by project size, with 15 permits totaling 1.1 million square feet.
The jump came even as the area’s general contractors navigated a rough few years, thanks to rising costs and tighter credit.
The ranking, which debuted last year, analyzes building permits on new, repair, addition, demolition and relocation work issued by the city of Los Angeles between Aug. 2, 2021 and Aug. 25, 2024. The list is paired with a second contractors’ ranking based on permit valuations calculated from Los Angeles Department of Building and Safety information.
These rankings have some overlap with those published last year, which analyzed permits from May 1, 2020, through May 22, 2023.
Toll Brothers, like Uncommon, moved up the project-size ranking to take the top spot with 984 permits totaling 4.2 million square feet. The developer described itself in its most recent annual report as the general contractor on most of its communities.
“I would categorize Los Angeles as a steady market, but not growing at any significant pace right now.”
That’s about double the No. 2-ranked firm, W.E. O’Neil Construction Company of California, which had 2.3 million square feet across 26 permits.
Wilshire Construction, which came in third, and Walton Construction at No. 4 filled out the rest of the top five with 1.6 million and 1.4 million square feet in projects, respectively.
“I would categorize Los Angeles as a steady market, but not growing at any significant pace right now,” said Peter Tateishi, CEO of construction trade organization Associated General Contractors of California.
What is keeping crews busy at the moment are public works and infrastructure projects, including those at Los Angeles International Airport, Tateishi said.
Olympics, infrastructure upside
Even with construction sluggish, Tateishi said he’s upbeat on what’s to come.
“There’s going to be more resources coming into Los Angeles as we gear up for the 2028 Olympics,” he said. “With the interest rate drop and commitment to continuing to drop, I do think you’re going to see development that has been paused start up again.”
TRD’s top 10 list of contractors based on permit valuations shows the significance of infrastructure jobs. Valuations do not reflect actual construction costs, which would likely be much higher.
Hensel Phelps Construction Company sits in the top spot once again, with 67 permits, valued at $722.5 million for the August 2021-to-August 2024 period. Much of the company’s work stems from LAX.
That includes the multiyear, multiphase $2.3 billion Delta Sky Way project, which includes the relocation of the airline’s terminal.
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Hensel’s project valuation is more than double that of the next largest contractor on the list, Onni Contracting.
Onni, with 18 permits valued at $284.9 million, jumped from fifth last year to second place.
Its move up in the rankings comes as the company leaves its mark on the Downtown skyline with the 54-story Olympic & Hill apartments at 1000 South Hill Street.
Onni’s also got plans for two residential towers at the former Los Angeles Times headquarters and a mixed-use project in Downtown’s Arts District.
Rounding out the top five, Toll Brothers nabbed the No. 3 spot with $277.4 million in valuation for 984 permits; Carmel Construction West ranked fourth with $268.8 million across 10 permits; and at No. 5, W.E. O’Neill counted 26 permits valued at $242.3 million.
On the fast track
While infrastructure and public works initiatives offer dependable job flow, certain private projects are also inching forward because of government intervention.
Gov. Gavin Newsom in July helped push forward Continuum Partners’ 10-building mixed-use project Fourth & Central by tapping a law limiting the period when California Environmental Quality Act legal challenges can be filed against a development. The governor explained the move as cutting “red tape” standing in the way of “critical housing projects.”
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Tateishi pointed to gas tax revenue generated from Senate Bill 1, which was passed in 2017, as crucial for keeping infrastructure projects from stalling, which in turn contributes to an overall upbeat market forecast.
“Out of all the markets [in California], we’re not worried about Los Angeles or the greater Los Angeles area as much as we are other parts of the state,” he said, pointing to the pause on Bay Area commercial as more worrisome than any L.A. slowdown.
Hekmat said programs such as Opportunity Zone tax incentives and Los Angeles Mayor Karen Bass’ Executive Directive 1, which speeds up approvals for shelters and fully affordable developments, have helped push projects along.
Uncommon’s 53-unit Hollywood multifamily project and 128-unit East Hollywood developments are entitled and approved under the directive, which went into effect in December 2022.
“There’s still a lot of bureaucracy that we have to navigate through [with ED1 and Opportunity Zones], which is making it difficult but definitely not as difficult as it was before,” Hekmat said.
Uncommon is also busy with a market-rate multifamily project on Sepulveda Boulevard near Vanowen Street that’s expected to deliver roughly 405 units. It’s also finalizing the last two phases of a 24-acre Chatsworth campus that includes about 760 apartments, 350,000 square feet of office, 12,000 square feet of restaurants and retail and about 5 acres of open space.
Hekmat anticipates plenty of multifamily distress and office acquisitions leading to business in 2025.
“[Owners have] been kicking the can and we have been circling on a lot of different projects,” he said.
He thinks there is particular promise in Downtown Los Angeles — a neighborhood that Hekmat knows well after a nine-year stint on a portfolio of Brookfield buildings there.
“I was taking notes the whole time,” he said.
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