When Stephen Jaron started Renovate & Restore 10 years ago, he spent the first few years concentrating on residential remodeling. But as he began subcontracting for restaurants and stores, he decided to pursue more commercial jobs to help maintain a steady flow of work in all economic conditions in his Naples, Fla., market. “I wanted a balance,” Jaron says. “In the long term, [commercial work] would smooth out the peaks and valleys. It also gives us a larger client base to pull from.”
Though his primary work is still residential, Jaron bids on tenant improvements for businesses such as restaurants, salons, and stores. “But commercial jobs are more competitive than residential bids,” he points out. In addition, the south Florida market where he works has a glut of commercial properties. “A lot of it is vacant,” Jaron says. “I see strip malls without tenants.”
Sourcing the Work
Renovate and Restore’s commercial work comes from a variety of sources, including referrals from other general contractors, as well as from property managers and real estate agents. Jaron also finds jobs in Dodge Project News, a print and online subscription database of building projects throughout North America, and CDC News, an online subscription service that provides regional public and private commercial construction leads (see “Commercial Lead Reports” below).
Jaron says that developing the commercial side of his business is a long-term effort. “I definitely have to develop relationships with architects, engineers, and commercial property managers,” he says.
Jaron usually bids on tenant improvement projects for retail businesses and restaurants that are leasing space in shopping plazas or in doctors’ or dentists’ offices. Much of the existing space is basic and raw, with just concrete floors.
He says that commercial work is more straightforward than residential. The tenant usually has a set of plans that they bid out. “If we are in the ballpark, we get to negotiate with the owner. We don’t have a lot of design input,” he says.
To do commercial projects, a company must be bonded for commercial work. “Bonding can be restrictive,” Jaron points out. “You get rated to a certain dollar amount. If you’re bonded for $1 million, you can’t do a $2 million project,” he explains.
Jaron spends a lot of time making sure his commercial bids are thorough and accurate. He and his crew keep up with commercial codes. His in-house crew handles the carpentry, drywall, and trim work for commercial jobs, but he subcontracts electrical, plumbing, roofing, HVAC, and concrete.
The actual bidding process for commercial projects can take a long time, and there may be a specific time line based on leases or bank loans. However, there is more flexibility in working hours, with longer days and weekend work.
—Nina Patel, senior editor, REMODELING.