Build, baby, build. Big D keeps expanding, and the city’s top general contractors are busy.
Dallas construction firms posted record years in 2022, but that momentum has hit a lull as some projects have slowed or stalled completely in light of higher interest rates and construction costs. But contractors remain optimistic that another boom could be on the way.
“The second half of 2023 does look more promising. We have clients that look to have the financial assets available to close and move forward with some deals,” said Grant Mendeljian, vice president of preconstruction at Moss Construction.
Like the rest of the country, supply chain issues and high material costs were the main speedbumps to dealmaking, but the breakneck pace at which DFW continues to grow helped offset some of those problems. Though Mendeljian said a recent relaxing of material costs could spur a run on permits later this year.
“We are seeing a decrease from what we were bidding for in 2022, and that will help many of our clients hopefully close deals,” he said.
While office construction is down outside of the most prolific submarkets, apartment deliveries were high in 2022. With over 65,000-units in the DFW construction pipeline, it should be another strong multifamily year for builders.
On the retail side of things, demand is high, but deliveries aren’t keeping pace. Only 538,000 square feet of new retail space was delivered last year, a new low for the modern Metroplex. The last two years are the only times less than 1 million square feet in retail construction was delivered across DFW.
Another problem facing Dallas contractors last year was a backlog of building permits due to an outdated city system that almost led to the firing of City Manager T.C. Broadnax. Last summer, it was reported to take about four months to get a commercial building permit in the city and 35 days for a residential permit. Though Broadnax was ultimately retained and given a raise after a series of minor process improvements, many contractors still say Dallas’ system needs an overhaul.
But despite delays and high costs, developers filed permits for 15,765 new buildings across Dallas last year, according to city data.
To find out which construction firms captured the largest portions of that work, The Real Deal analyzed every building permit issued across the city between February 15, 2022 and February 15, 2023, then added up the total square footage across all filings where a given firm was listed as the general contractor.
Balfour Beatty Construction tops TRD’s inaugural list with 66 permits valued at $168 million encompassing over 1.3 million square feet across Dallas. Formerly known as Centex Construction, the firm was acquired in 2007 and rebranded to Balfour Beatty. In 2022, it filed permits on a variety of projects in the commercial, industrial and residential sectors. Notably, Balfour announced last year it will construct three new towers near Uptown that is reportedly Hunt Realty’s North End development. The project could house 5,000 Goldman Sachs employees.
Next on the list is Alabama-based Brasfield and Gorrie, one of the largest private construction firms in the country. The firm’s Dallas branch filed 68 permits valued at $152 million, which would equal 1.5 million square feet of deliveries. The firm has completed a number of high-profile Dallas projects and is currently undertaking a multi-million dollar renovation of the Gild towers off North Central Expressway, which is also home to the company’s Dallas office.
Coming in third is Dallas-based the Beck Group. The homegrown firm filed 54 permits last year valued at $141 million to deliver 630,000 square feet. The firm recently delivered the American Airlines Hospitality Complex, a $250 million hotel in Fort Worth with 600 guest rooms.
“Lending and the banking situation has tightened up the office market quite a bit. Some prospective clients that have the equity are still moving forward because they know DFW in general is going to come back strong,” said Matt Leyman, Beck Group’s Dallas director. “So they want to be the first to market when that happens.”
Leyman said the firm is pursuing some big deals, including getting in on the $3 billion Kay Bailey Hutchison Convention Center project and Terminal F, planned at Dallas-Fort Worth International Airport. One of the secrets to Beck’s success, Leyman said, is its pursuit of perfecting the design-build process.
“A lot of our competitors do design through a third party. It’s still two separate entities that are delivering the work and I think there’s an added benefit to having a truly integrated firm that’s working together,” he said. “We have been working at that for over 20 years, trying to perfect the entire delivery process from concept through delivery and close out, and we are getting pretty good at it.”
Fourth on the list is the Dallas branch of California-based DPR Construction. The firm filed 63 permits valued at $123 million to deliver 1.4 million square feet of space. DPR is building 23Springs by Granite Properties, which will be the largest office building in Uptown and is set to be delivered in 2025. The development will include a 26-story, 626,000-square-foot Class AA office building, six stories of underground parking and separate buildings for restaurants.
Moss Construction slots in at fifth on the ranking with 47 permits valued at $111 million dollars totalling 438,000 square feet. The national firm completed a number of wood-framed multifamily projects last year but most notably delivered the first tower of Urby Dallas. The project consists of three residential towers on a 4-acre parcel in what is expected to be the largest project in the city’s Design District. The first tower Moss Delivered is a $98 million, 383-unit luxury apartment building.
Cadence McShane Construction, Scott and Reid, Hill and Wilkinson Construction, Structure Tone and Korte Construction Company rounded out the top 10.