According to architects, the new year has rejuvenated prospective clients, though awareness and adaptability are key to weathering the storm.
One draftsman has found that projects across the seas and tapping developing areas may turn into a lucrative option in the industry.
“Our firm is primarily in the commercial sector and we watched our brethren architects take it on the chin in the residential market for the last 16 months,” said Dennis Noskin, principal and founder of Dennis Noskin Architects in Tarrytown.
Noskin said it wasn”™t until September 2008 that the commercial side of the market saw signs of a weakened economy.Â
“Requests for proposals dwindled and the constant volume of phone calls we saw in the summer came to a trickle,” said Noskin. “The work load heading toward the holidays showed incredible signs of weakness given the government bailouts and a number of well-known companies having huge fallouts.”Â
Noskin”™s company was forced to cut hours and lay off some personnel as a last resort.Â
“If there were some signs of new prospects in December, we did not see it,” said Noskin.
Noskin said paralysis would describe the majority of his clients.
James G. Rogers III, one of the founding partners of Butler Rogers Baskett Architects who recently split with his old firm to establish James G. Rogers Architects in South Norwalk, Conn., said, “The thing about the economic times that we”™re in is that we”™ve all been through ups and downs, but the reality is this is not like anything we”™ve ever experienced. So I think the key is to be vigilant and thoughtful about the work that we pursue and attract. It”™s going to be tough times for architects because we depend on people”™s extra wealth.”
Tobias S. Guggenheimer, founder and principal of Tobias S. Guggenheimer Architect, said, “Architects are problem solvers who are intellectually equipped to adapt to changing conditions.”
According to Guggenheimer, with few hints as to how the market will turn, the profession is unsure how to respond and where to focus its energies.
“ I assume that project types relying on private financing will recover only when the confidence of both financiers and borrowers improves,” said Guggenheimer. “According to my colleagues in the industry, and my own clients’ recent experience, there is already a willingness of banks to lend on construction, but only on fully collateralized terms. For most developers, that is a tough proposition but it signals a good, if modest, start.
According to Guggenheimer, it also broadcasts that banks are rediscovering their conservative roots. “One result may be that real-estate syndication may take on a new form, as backers will be asked to put more assets into the supporting pool,” he said.
Guggenheimer said there are regions of the world that have been only modestly affected by economic crises to date, leaving architects in demand.
“I just returned from Asia where, surprisingly, I found commercial construction strong in the Philippines as developers fill demand for large business process centers, some of whom house thousands of employees,” said Guggenheimer.
Guggenheimer said, with growing pressure to reduce labor costs in the West, architecture might actually expand in the developing world.
“I met with a large commercial kitchen company in Thailand who identified India as a strong market, especially in growth sectors like hospitality,” said Guggenheimer.
Noskin”™s firm has sought projects that were at the outer limits of their normal building types, including industrial buildings, retail properties and governmental work.
“Project diversity appears to be one of the answers in this downturned market,” said Noskin. “The new year so far has improved with a few companies venturing out beyond their comfort zone seeking architectural proposals, which has become music to my ears. This does not guarantee business but it is very encouraging.”Â
“The crisis in housing is slowly being addressed by the political and economic system,” said Guggenheimer. “That is good news. However, a growing problem in commercial real estate might offset gains elsewhere in the privately financed realm, at least until it is fully understood.”
Guggenheimer said he is a bit less optimistic about the prospects for recovery in the commercial area, especially given that so many industries are struggling.
“I would guess that demand for new commercial and industrial space might pick up late in the game,” said Guggenheimer. “The first sectors to return to full vigor might be those which suffer least in the downturn, an indication of their underlying strength.” He said it is probably too early to identify exactly which industries these might be, but education, health care, government, agriculture, military and some institutions are good candidates to keep an eye on.
