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Rate of Development in Seattle Prompts Rapid Change in Construction Workforce and Demographics

Rate of Development in Seattle Prompts Rapid Change in Construction Workforce and Demographics

By Meghan Hall

Frank Stauff, President at Compass Construction

Seattle’s commercial real estate industry use to be tightly-knit; development projects were easy to track and many of the region’s players worked in tandem with one another on a regular basis. However, the industry has changed dramatically as Seattle has established itself as a major metropolitan center not just regionally in the Pacific Northwest, but nationally as well. The Registry caught up with Compass Construction’s President Frank Stauff to talk about how development in Seattle has accelerated over the past decade and how the industry continues to evolve. Stauff, who has been in the construction industry for nearly two decades, was named president of the company at the beginning of February and intends to lead the firm’s new leadership team through the region’s changing market.

Tell us a little bit about your career in the Puget Sound construction industry and your new position as president of Compass Construction. How long have you been there and what did you work on prior to taking over as president?

I went to the University of Washington and graduated with a degree in Construction Management. Immediately upon graduation, I went to work for SDL, which was later acquired by McCarthy. I spent 10 years there and worked on a variety of projects ranging from tilt-ups, retail, resort, office and high-rise residential. My time spent there formed the foundation of my technical knowledge, as McCarthy had a strong self-performed presence in concrete, structural steel and finish carpentry.

The next significant stop in my career was with Opus NW Contractors. Opus was a developer contractor headquartered in Minneapolis with a regional office in Seattle. All our work was performed in a design-build format. While there, I spearheaded our multi-family construction and supported acquisitions for the same.

When Opus shut down as a result of the recession in 2009, I went to work on my own doing construction and development consulting. Services offered ran the gamut, from feasibility studies to project management and owner’s representation. During that time, I met the team at Compass while representing an out-of-town developer on three projects Compass was building for them.

I swore that I’d never get back into general contracting, but there’s a reason they say, “never say never.” While working as an owner’s rep on the Compass projects, I was able to have a level of visibility that few people see outside of the organization. I liked what I saw. The Compass jobs were well organized with budgets that allowed ample protection of finishes and cleanup as the job progressed. Subcontractors and clients alike were treated well, and the Compass teams were enjoyable to work with. When the offer was presented to participate in the ownership transition with Dan Selin and Pete Anderson in 2015, I accepted.

I joined Compass at the start of 2016 and immediately went to work supporting operations. The company had grown so fast from the recession, our immediate task was building the company infrastructure, process, procedures and best practices to support our teams in the field. As we go into 2019, we are well positioned to take advantage of the investments in infrastructure to execute on our backlog that extends deep into 2020.

Compass Construction built its first project — the Tera Apartments — in Kirkland, Wash., in 1998. How have you seen the Puget Sound construction industry evolve over the past 20 years? What has changed and what has stayed the same?

Two things come to mind. When I started in the business in the early 1990s, we knew every tower crane in the city. The type of project, who the general contractor was and design architect. There were probably only a half-dozen cranes up at any given time. Now we cannot even count them all.

The other major shift has been the demographic of the people doing the work. When I started it was almost exclusively male, and the workforce was in their late thirties to early fifties. Now the workforce is much younger — twenties, on average. Our workforce has been quick to embrace the opportunity presented by the construction boom through in-house training, tuition reimbursement and mentorship programs. Management has changed profoundly as well with women in all positions and international students from around the globe.

Outside of general contracting, what is Compass’ perception of the Puget Sound multifamily market?

We believe the multifamily market will cool down but are optimistic it will remain steady. Multifamily development has been moving to the suburbs chasing both affordability in land, economies of scale, less restrictive building codes and light rail expansion. There is also the underlying challenge of housing affordability, and multifamily construction is the most efficient way to address that problem.

2018 was an active year for the Puget Sound region in terms of development and construction. How did Compass fare this past year, and what are your expectations for 2019?

Our 3-year average volume has been about $225 million. We expect to do slightly less than that in 2019 and slightly more in 2020.

What does the region’s construction pipeline look like for the next 12 to 24 months? Where is Compass building in the Puget Sound and why?

We have more staff devoted to estimating than at any previous time, and they are very busy. The outlook for the next 12 to 24 months seems to be very strong, and our backlog reflects that. Our building has gradually progressed from the urban core of Seattle to the suburbs. Our presence on the Eastside has expanded dramatically, as well. Development is chasing light rail expansion north, east and south, while we start a large project in Auburn next to a Sounder stop. Our furthest venture south previously was The Maverick for Legacy Partners in Burien.

What project completions is Compass looking forward to in 2019? How do they exemplify Compass’ work as a company?

We are excited about completing our fifth project for Aegis Senior Living on Mercer Island later this month. I am very proud of this project not only for its stunning architectural features, but the teamwork exemplified by Ankrom Moisan, Aegis, the subcontractors and the Compass crew, which drove a complicated project to finish a month early; a rare event in this economy.

What excites you about the Puget Sound construction industry in 2019? What concerns you? What challenges do you think multifamily construction companies will face in the future?

I am excited about the diversity and youth entering the industry today. Graduates arrive with varied backgrounds and are better prepared. We are seeing women and people from all parts of the globe participating in the field and key management positions. This has allowed us to not only take on more projects but to also field more capable teams.

Over the last few years Seattle has emerged as a gateway market, with construction and development booming. What are Compass’ goals moving forward? How does Compass plan to achieve these goals?

Our goal moving forward is to create and maintain a loyal base of clients while delivering quality projects in a fashion that promotes long term relationships. Ken Coleman, our original founder, believed in and promoted the following principles which serve to guide us to this day.

Integrity – From the Company’s inception, integrity has been at the heart of the way we conduct business. Whether in the field or in the office, integrity is first and foremost when working with clients, subcontractors and the entire project team.

Collaboration – We strongly believe the greatest value outcome for all is by approaching the project in a collaborative partnership, working with owners, architects, subcontractors and others to ensure each project’s success.

People – Compass believes that a contractor is only as good as the individuals assigned to the project, and that its employees are its most valuable asset. Therefore, we provide opportunities for each individual employee to grow and advance through in-house training programs and tuition reimbursement at local universities and community colleges. We strive to create an atmosphere where employees take pride in their work while fulfilling the client’s vision.

Value – Compass delivers value through active design input during preconstruction, competitive pricing that avoids “cost creep,” and methodical planning with collaborative problem solving that minimizes change orders or schedule delays while maximizing quality.

Innovative – Ken was always brainstorming ways to change the business, a trait that exists at Compass to this day. Whether it was cost, quality or time frame, he was always trying to find a way to do it better.

Make it fun – Construction is a challenging business, and Ken believed in making it fun. Compass strives to build close knit teams on our projects and deliver exceptional buildings to our clients while making the process enjoyable. Our track record of repeat clients is one result of this philosophy.

The way we achieve these goals is to always remember this business is one built on relationships. We strive to create solutions that all parties can not only work with but thrive, whether they are clients, subcontractors, or employees.