Gareth McGlynn: Jim Brain, welcome to the Preconstruction Podcast.
Jim Brain: Thank you. Good to be here.
Gareth: Good man. Thanks for making the time. So, for anybody that doesn't know you, Jim, myself and yourself, we are kind of connected on LinkedIn commenting on each other's preconstruction content. For anybody who doesn't know you give us a quick bio of where you're at now, in the US what you're doing.
Jim: So currently, I'm Vice President of preconstruction at Reaume Richardson, which is a general contractor located in Pasadena, California, which is the center of the known universe. And previously, we were known as City Constructors, Inc. So the company has been around for 20 years now. A couple years ago, we rebranded. So same company, nothing changed legally, we just changed the name and the brand to Reaume Richardson. So, in a sense, it's kind of like a startup company, because we changed direction a little bit a few years ago, but we have the 20 year history.
Gareth: Brilliant. Love it, and you've got all the connections. I like it. I mean, you're a California native currently living in Pasadena. So there's not much that goes on in California that you don't know about. So I'm looking forward to digging in--
Jim: Southern California.
Gareth: I know it's a big, it's a big place.
Jim: It’s a big divide between Northern and Southern California.
Gareth: Very good sport. Sports are just like--
Jim: First of all, I'm a Dodgers fan. So, you know.
Gareth: Wow, okay.
Jim: The enemies are at the north.
Gareth: Well, how are the Dodgers doing?
Jim: They're doing fantastic there. I think the best team in the National League right now.
Gareth: Brilliant. The future is good.
Jim: So, [indiscernible].
Gareth: Good. So give us an idea. So in California, what's the construction market like right now? What's been like? Obviously, we've had COVID, we've had hyperinflation, and we have the fluctuation in prices. Give us an idea of of what you've seen, specifically in Southern California, because what I've noticed is there's across the board inflation in prices, but give us an idea of how it has hit you guys in Southern California.
Jim: Yeah, it's unprecedented. I think is the best word I can come up with. In all my years of being in construction. I've never seen anything, you know. Obviously, the economy comes in cycles. But I've never seen anything like this before where people are holding their [indiscernible] prices and [indiscernible] are good for 20, 30 days, in some cases, even less. I mean, it's, you know, and we recently had a project where we did a GMP. We negotiated the contract, you know, and always takes a while to go through, you know, the lawyers back and forth. It was probably two months from when we initiated the GMP to when we finally had a signed contract. We're actually starting to sign up subcontractors. The project manager was calling everybody up, and I thought, I can't honor that number anymore. We headed out. We signed a contract like well, but my pricing went up 20%. And so here it is. We, you know, we're very successful getting a project sign a GMP. Day one, we're losing money. Because the subcontractors that we have based our pricing quit honoring it. I've never seen anything like it. I was talking with Bryson Reaume, one of the owners of the company, recently and I said, “You know, we basically right now have to switch over to a time and materials type of contract, because there's just not enough time from when you get a number from a sub to where you finalize it, you sign a contract, and then you go back and negotiate with subcontractor, it's too late. They've already-- their material prices have gone up. That's how fast things are going on.
Gareth: And how difficult is that? Obviously, it's very difficult mid-contract when you've signed the GMP. I mean, how do you go about doing that with the subs, the architect and the owner? Do you just got to be completely transparent? I mean, obviously, the owners and architects understand what's happening. I mean, you're not coming with news that they didn't know about. But how do you manage that situation?
Jim: Right. Fortunately, it is an industry-wide problem. So it's not unique to us by any means. So we've done a couple of things. We've had our attorney draft a clause that we're now putting in our prime contracts that essentially says, even after signing the GMP, if there's substantial material cost increases, will subject to a change order. At the very least, it sparks a discussion whether or not, you know, an [indiscernible] sign it like that or not, but at least it brings it to the table. You know, we tell what we-- we can't lose money just because of inflation. That's not-- the point of locking in a contract is supposed to hold us accountable, but we can't be responsible for you know, copper goes up 20% overnight or something like that. That's clearly beyond our control. So that's one thing to try and modify our contract. I've also, on particular trades that are subject to fluctuations like steel and rough carpentry and some of those things, I've put in clauses in our qualifications as well. But even after we sign a contract, the final price won't be locked in until we actually sign subcontract. So that gives us another, you know, few weeks, maybe a month to negotiate something, and we don't have to worry about losing money on that particular [indiscernible].
Gareth: Brilliant. [Crosstalk]
Jim: [indiscernible]
Gareth: Good. Yeah, and now listen, it's unprecedent times, as you said, subcontracts who know about that developers. How are subs reacting to that on the on the subcontractor scene?
Jim: Well, the other [indiscernible] side that we're seeing in Southern California is there's a limited labor pool. I think just a lot of us just due to the fact that the workforce of aging out you know. There was kind of this giant bubble, kind of, you know, picking up [indiscernible] rate is the baby boomers are moving on through the economy and now a lot of those guys are in their 50s and 60s, and there just hasn't been the replacement labor. Not to mention, you know, as over the last 10 years, we've been clamping down on immigration, so there's fewer immigrants available. And there's just for a lot of reasons. And then COVID was, obviously a lot of people left in business because of COVID. So one of our biggest struggles right now with subcontractors is limited labor. And I call that some of our regular subcontractors asked me to bid on a project. They said, “I can't I would love to believe me, I want to grow my business, but I can't find the labor.” So they're declining the bid projects just because they can't stop it.
Gareth: That's right. Yeah. And when you put it like that, just what you've described there, we are taking a beating at the moment the construction industry, There's no doubt about it, whether it be the fluctuation in cost or the labor shortage. It's an interesting one, because I think it's a difficult one, I do think that we need to talk about it more. I think you can, you can put a few articles out there, but actually go out and physically talk about it. To talk [indiscernible] but high schools. Even go younger and talk to people about construction. I think it's up to-- the responsibility is up to us, as people within the construction industry, to talk to our friends, or peers or families or nephews or nieces, whoever it may be. Because there's so many really good intelligent people out there that don't know about construction, and would be really good for our industry. They may be a bit lost, maybe they might be perfect for IT or financial services or health care, whatever it may be, because the construction industry has got so much variety when it comes to jobs. It's not just a project manager and a superintendent. There are so many jobs involved in it. I think it's up to us to talk about it. So that's why this this kind of conversation is good. And just in general, for your own firm, how do you find resources? How you find getting people? Are you guys-- because I know California in itself, it's very difficult to get people to move there because of the cost of living.
Jim: Yeah, it's pretty rare when you can get someone to move in from out of state, just for that reason. Yeah. So we tend to recruit locally, as best we can. Yeah, it's a combination. In some cases, we have to rely on a recruiter just because, you know, we don't know somebody in a particular area. But we rely a lot on our connections, you know, LinkedIn and going to industry events, just talking to people. We find that a lot of times the best candidate isn't somebody who's sitting at home waiting for a phone call from somebody, if somebody is working for one of our competitors, or maybe even a subcontract, right? Once a while, I'll run across somebody who's just a really sharp estimator maybe works for a mechanical company, or he works for Drywall, or somebody. That's a great candidate to be an estimator for a general construction company. As long as that person has the skills and the personality, you know that they can learn the rest of it.
Gareth: Yeah, and I love what you're thinking, right? You said it just then. You said, “I just look for someone sharp.” I believe that there's so many sharp people out there. They might actually be on the tools. They may be a welder. They may be a fitter, and they're just sharp. They're just not fulfilling their potential and I think those are the people that we've got to start training and developing into your company as a superintendent, project manager, project engineer, into estimating, preconstruction, or BIM coordination. I totally agree with you. I think there's a lot of sharp people out there that we just need to go and find them. It is becoming about those soft skills rather than the technical skills. The old look at a resume four years experience, purely GC doing all divisions. Those people are rare.
Jim: Yeah And another thing that I'm starting to see a lot, just in the general media is, there's a lot of backlash nowadays about student loans and how expensive colleges are and I think, it's may take a while, but I think people are beginning to realize that spending a couple $100,000 on a college education so you can get a $30,000 job out of school doesn't really make sense. So I'm hoping that as people realize that they're gonna start looking at alternatives and realizing, “Hey, you know, trades isn't that bad.” Most of the successful people I know, are are like, you know, let's say you're a journeyman electrician, you're gonna make a lot more money than, you know, a lot of professionals. You're making many six figures, you know?
Gareth: Yeah, that's right. A hundred percent.
Jim: You don't have that huge burden of that we're [indiscernible] that. I mean, I want to go-- I have nothing against college but what I'm saying is that I think you need to look sometimes just from time spent, money spent, you know, what's going to get the best reaction? I think people need to look at the trades as a viable alternative. Unfortunately, right now, it kind of has a negative connotation. If you go to a group of high school kids, and you try to talk them out of college, you know? Yeah, good luck with that That is still not a good thing to try to say, “You know, you guys forget this college nonsense. You guys need to go to trade school learn how to, yeah.”
Gareth: But I think they want to go to college and enjoy themselves more than anything. They don't want to mess it up. You know, but it's not for everyone and I totally agree with you. If you do the figures, you're better off becoming an electrician, a plumber, than go into college. You will be financially better off and to me, prospect-wise, you'd be better off as well. And then, The best people then, if you're then 30 or 35, you can then go back and do a part time degree, no problem. I mean, there's so much. You can do it online, you can do it at any stage, but you then have the good foundation, the life experiences of how a project goes together. You would kill it in any construction management, project management degree.
Jim : Yeah. And that would be my argument to a young person. Start out in the trades, learn the business from the field side, and then construction is really geared so that it will adapt to people from the field coming into the office. To your point, when you get older, let's say you know, your knees can't take it as well as you used to be able to do, then you come in the office, right? And then you start to become a-- a lot of people that come successful, you know, on the sales side, or estimating side or project management or whatever. There's all kinds of opportunities to work in the office.
Gareth: Yeah, so [crosstalk]--
Jim: Well, that's what-- in construction, it offers you a lot of options within the same industry.
Gareth: Yeah. And you would know what I mean that the most successful preconstruction and estimating teams that I work with, are diverse. They don't have 15 graduates. They have journeyman, they have mechanical, electrical, piping, people that have come up through the tools, and they get together. And then, they do have the people that have come out of college in one degree and haven't been on site, and it's a great mix. And then you've got young people that are more technologically focused and the mix is just incredible. But if you don't have that diversity, it's very difficult to see problems from from various angles.
Jim: Yeah, I agree.
Gareth: Yeah.
Jim: So personally, people ask about my background. I'm kind of a hybrid because I started out being a general contractor a long time, almost almost sort of a handyman, and I slowly became a contractor and ran my own business. It was never a great business. I mean, I enjoyed doing the work, the physical work of it, but like a lot of general contractors, I hated the paperwork.
Gareth: Yeah.
Jim: I wasn't very good at it and my wife was complaining, I was never making any money because whatever money came in, it was going out towards the next, you know, job to buy tools or pay the workers or whatever. But at the same time, I started going to college, and I studied Construction Engineering Technology at Cal Poly. So I'm just kind of a hybrid, right? I came out from both sides. I've seen the field side. I work there. Then, I also have that theoretical background of college. And, both sides[indiscernible] well.
Gareth: And I can imagine that is the reason why the trajectory of your career since you came out of college has just gone up and now you’re VP because when I to talk about the types of projects you guys do and it's adaptive reuse, I think that's what you're famous for and so, California, Reaume Richardson. I did listen to Bryson on a podcast recently. Tell me how difficult and how complex for any Junior mid even senior people that just do multifamily, mixed use, data centers grind up commercial construction. Tell me how difficult and how challenging it is when it comes to adaptive reuse, especially historical buildings.
Jim: Yeah, there's a whole bunch of buildings in downtown Atlanta that were built in the early 20th century. For example, we're just finishing a project right now called The Lane which is probably a 10 or 11 storey building downtown on Eighth Street and Broadway. One of the-- I'll give you a quick example of what you're dealing with on these older buildings that I learned on this job. We were told by the structural engineer that the footings were, let's say, four feet deep, something like that. So we had to dig down to the bottom of them and, you know, add concrete expand the size of the footings. We started digging and digging. We realized pretty soon that we weren't hitting the bottom of the footing. And then it turns out, they're like 12 feet deep. There was like three times deep. So back in the early 20th century, even if you had plans, they were really more like suggestions, you know. They didn't follow rigidly like you do now. Like everything is just cut dried. You got to do everything by the plans [indiscernible] inspected. Back in the [indiscernible] yeah, you know, the ground is still soft. Let's just keep going.
Gareth: They didn't take any chances, did they, Jim?
Jim: Yeah. And the other thing is, nowadays, what we do is you know, we start with firm compacted soil, then we dig down for the footings. Back in those days, they would dig down to the bottom of the footings. And then they would form the footings, like you know, with wood formwork and then pour back so instead of like pouring into a dirt hole like we do now, they would start with dig--
Gareth: Dig and then form [crosstalk].
Jim: Right. And then form it up. So then you have all these footings with a bunch of space around. So, then they would just start back-filling but it was not a structural backfill. They would just literally just treat it like a junkyard. So when we're excavating nowadays, these old buildings down between the footings, we're finding, you know, bricks and beer bottles and all kinds of crap that was thrown in there, because none of it was structural. At the time, they didn't realize the importance of a structural fill to support the footings. There's, there's a million things like that when you run into the older buildings that you just go-- you wouldn't know about, you don't think about it unless you've done it before, and you have experience. And again, we have a lot of experience and we rely on our subcontractors that tend to specialize [crosstalk].
Gareth: Brilliant, yeah.
Jim: [Crosstalk] You fixed it, tight in the facade like you'd have a brick facade that wasn't really attached well to the frame of the building. So you have to learn how to--
Gareth: Brilliant, what's the [crosstalk]-- what’s the craziest thing you've come across?
Jim: That was probably one of them. It's, like said, in this Lane building, the fact that the footings are three times as deep. That was one of the extreme examples.
Gareth: Incredible. And then estimating something like that and run through preconstruction, I mean, it must be very difficult considering, as you say, you haven't even put a spear in the ground or turn the dirt. The fact that you don't know that these problems are going to come up. I mean, you mentioned the GMP there. Is there like contingent of finding something just like crazy that you think, right? Okay, this building, this brick has been attached at all, and it's just going to fall over as soon as we start working?
Jim: Well, yeah. Part of the key is also working with the structural engineer, you know, an architectural team that are also experienced on this kind of thing. And hopefully, the structural engineer has done their due diligence. A lot of what we do in preconstruction is assisting with the structural engineer and architect. So nothing that you tend to deal with when you're renovating an old building is that you can't just rely on the drawings, like I said, we have to go in there and physically examine what's there. So one of the things we do in preconstruction is, we'll go in and sock out a slab and dig out and find out what's there. You can't rely on drawings at all. So a lot of it's just physical examination of finding out what the existing conditions are, without ceilings to see what the roof structure is like, because you don't know what it's like. We don't know how deep footings are. In some cases, there might not even be footings. In some cases, you just-- there's a column and you're assuming there's a footing there and you rip out the slab and realize it's just sitting on dirt. We’re seeing a lot of that.
Gareth: Brilliant, brilliant. And then what about technology, Jim? Do you do a lot of scanning? Do you use a lot of technology? Or what are you using right now even for preconstruction and estimating?
Jim: It depends a lot on the architect. Some architects still go through and just use the old tape measure kind of thing. Some architects are doing that, you know, point cloud laser scanning, which personally I love. The one thing that we've found that it's much more useful tool if you can do your preliminary demolition first because you want to be able to expose the structure itself. So it's really much more efficient if you can get in there and rip out all your plaster finishes, everything kind of expose the bones of the building and then if you do a point cloud, then it's really helpful because he knows exactly what you got in terms of structure. Unfortunately, a lot of times they do a preliminary takeoffs where they just show up like a two by two column but they don't exactly know what's in there because they haven’t stripped it down yet. So you know something's there, but you don't know exactly what it is, and sometimes, you know, that can be a little tough to figure out what your connections are going to be, some of the details.
Gareth: Brilliant.
Jim: I think, early demolition, along with some investigation, and along with point clouds is really the way to go. Then, there's no surprises left.
Gareth: Nice. Yeah. It's amazing. Isn't that what point cloud can do? I mean, it's just-- it makes life so much easier. And then you guys then once you've got the, as you say, stripped back to the bare bones, do you then go ahead and use Excel, preconstruction technology estimating software? What do you guys do?
Jim: From the technology side, so still is in our industry, PDFs are pretty much the standard. You know, I've been in the new construction business for a long time when you're doing you know, high rise, that kind of thing, everything is [indiscernible] based on the new construction side, but for a lot of renovations that we do, it's everything is, you know, 2D PDF. So we're still doing takeoffs, 2D takeoffs using OST or Bluebeam for effect. If you look behind me through that screen there, that's the Bluebeam officer literally across the street here in Pasadena.
Gareth: Nice.
Jim: So if I have a problem, I just open the window and yell at him.
Gareth: [Laughter] Throw your stapler right at him.
Jim: That’s right. So, we use the 2D technologies, and then we use ProEst for our database.
Gareth: That’s very good. [Crosstalk] What's ProEst like?
Jim: [Crosstalk] ProEst it's great. There's a lot of programs that are so similar to it, I'd say, you know, when asked. Trimble makes a good one that I've worked with before. There are similar software but I definitely like using a database as opposed to an Excel spreadsheet, just because a, you always run into that problem with formula [indiscernible] even if you have a tried and true Excel spreadsheet that you've been using for a long time. All it takes is one keystroke, and you're missing a cell somewhere, It's it's a very dangerous tool to [indiscernible].
Gareth: Before you know it, you're certainly at a $15 million project, and it's really worth about 18.
Jim: Exactly. Hopefully, you catch those errors. If you do an Excel, right, you have a bunch of formula, error correction built into it kind of thing to check for that sort of thing. But still, I like the database, and then that forces everybody to also use the same class codes. So you're consistent across jobs.
Gareth: Absolutely.
Jim: You know, that's the thing with Excel. You know, it's easy to-- so you know, what you call a fitting might be 03010 on one job and another job it's 03100 and then now it's hard to get your, you know, historic information because the two different jobs have two different cost codes on it. You've talked a lot estimators over the years. One of the biggest problems is trying to get standardized cost codes across multiple projects. So I find by using that, the database basically won't allow you to create new cost codes. It kind of forces you into the pre-existing codes. Sometimes that bothers people, but I love it because I'd rather force you into-- even if it may not be perfect for a particular job, it kind of forces you to use the same code. So you have consistency in history across multiple projects.
Gareth: Yeah. Yeah. I mean, pretty preconstruction data, you would have heard a couple of candidates and professionals I had on, they love preconstruction data. Some companies have been collecting preconstruction data for seven or eight years. They're way ahead of the game. How long have you guys been been collecting it and how useful is it?
Jim: Well, definitely, I wish we had history going farther back but I would say probably our good history that I can rely on probably goes back six, seven years, something like that since [crosstalk]. One of the first things I did when I came on board here with Reaume Richardson was go back through some of the older projects and and start mining that data and putting it in a format that I could use it.
Gareth: Yeah, maybe--
Jim: You have that same cost codes so it just takes time because then you got to standardize all the cost codes and everything so that you can bet-- you know, it's worth it to me. We're spending the time to go back looking at all the projects. Then you start to see trends and you see, well you know, how much-- even if dollar amounts change, you can still look at, you know, percentages. So, for example, in our project, you know, what's appropriate for general conditions for converting an old warehouse into an office building. So we've done a lot of projects like that. So I don't have to guess that. I can go back and look and say, “Okay, historically, this is where our general conditions have been in this range.” So I know I'm pretty good idea to start with what my cost should be.
Gareth: Brilliant. I'm sure clients absolutely love that as well, that if you can turn around them and say listen, this may be five, ten percent, right? But this is what it's going to cost you and how it's going to go. But not only that, I mean, bringing on staff. You mentioned you just hired another senior estimator. Bringing on staff and getting them up to speed quicker. It's much, much easier surely.
Jim: Yeah, absolutely. It definitely gives our clients a sense of confidence. When we tell them, you know, “Look, we're not just guessing what this thing's gonna cost.” Here's years and years of history of similar projects that we can back it up with to show that. A lot of times they may or may not believe how much footings cost on an old building, or how much a shear wall costs or something like that. But we can show them what the history is. Yeah, it really does. I’m working on a project right now. It's really an interesting project. It's an apartment building. It was built in the late 20s or early 30s. It was designed as a 12 storey building, but the market crashed in 1929. They just stopped construction at four levels. So it's this really massive building that's only four storeys high. So what we're doing right now is we're retrofitting that, and then we're adding seven storeys of new construction on top of it. So it's a combination of historic retrofit and new construction on top of it. It's really a unique project.
Gareth: That's interesting, Jim, right? Surely, and I'm sure you've thought about this, and it's come over, Would it not be better, cheaper and quicker to demolish it and start again?
Jim: Yes and no.
Gareth: Not for the environment, obviously.
Jim: Yeah and part of it, you know, LA's a playing place because we're not that old the city compared to other places. You know, I was-- a couple weeks ago, I was back in Boston with my family. You walk in Boston, there's buildings from the 1600s that are still standing there. Yet in LA, you know, it's like [indiscernible] buildings. It's like, well what time is it you know?
Gareth: [Laughter] The country's just dry.
Jim: The country’s just dry, right. But in LA, they're very cognizant about the historic [crosstalk] a lot of buildings are designated historic, and it may sound funny, but I've worked on historically designated projects that were built in the 1960s. That's because our history [crosstalk] A lot of people know you're trying to turn to keep it.
Gareth: Preserve it, yeah.
Jim: Yeah, you know, everything from Art Deco buildings. We've got some beautiful Art Deco buildings that were done in the 1920s and 30s. Everything up to you know, the mid century, what are they call Google architecture, and some of these funky coffee shops that look like they are something out of the Jetsons. So they're kind of preserve a lot of LA.
Gareth: And that's good. I mean--
Jim: You can’t just arbitrarily bulldoze anything you want to LA. You'd be amazed at what, you know, hoops you have to jump through.
Gareth: To do it. Yeah. And listen, it's better for the environment.
Jim: [crosstalk] to retrofit it.
Gareth: Yeah, it's better for the environment. That sounds like a cool project, though. That sounds complex. That'll not be easy.
Jim: No, it's not. It's really-- because it's two projects in one.
Gareth: Yeah.
Jim: Estimating has been tough, because it's, we have one group of subs for the first four floors, and essentially a second group of subs for everything above that. And then, you know, the new construction part is fairly easy. We have a tower crane, we're just dropping everything with the tower crane, building it. But, you know again, with the retrofit, you don't have the luxury of dropping things into the tower crane. Everything has to be, you know, brought in through a window or a basement or something. So it's a lot more labor intensive and you have to spend a lot more time just thinking about the mechanics of how you're going to get something in place.
Gareth: Yeah, and it's all gonna be--
Jim: [Crosstalk] that’s a new construction when you think about it. It's like, you don't have to think about setting steel because you have a crane. You just dropped it. It is still being placed, there it is. But when you're putting it in the middle of the third floor of existing buildings, like how are you going to get that beam in there?
Gareth: Yeah, absolutely. I would love to see-- I would love to see it before and after that one. I'm gonna-- I'm going to come back to you on that. Cool. So give me an idea. We talked about Pasadena. We talked about California, Southern California. How cool is it that you live there? I mean, you may know my day job is moving preconstruction estimating folk around the US. Give me some selling points apart from the Dodgers. How cool it is the live there?
Jim: I love it. It's, you know, Southern California is massive. There's, you know, the city of LA itself is, I forgot what the populations three, three and a half million, something like that, but look at Southern California, it's like more than 10 million. Southern California is like 80 different cities that are all smashed up against each other. It's not just Los Angeles. Other people [indiscernible] Los Angeles County is so much bigger than the city of Los Angeles. And so there's a huge diverse geography. You got everything from, you know, multi-million dollar houses, you know, in Malibu and up in the Hollywood Hills area to a lot of warehouses. The Port of Los Angeles is obviously one of the biggest ports in the United States. So there's a lot of, you know, shipping and receiving that comes through. Lately, we have built a tech industry, you know. A lot of companies that, you know, in the early 2000s, were only in San Jose and up north in that area, the Silicon Valley area. A lot of them are relocating down here, you know. So we have kind of a mini Silicon Valley down in the Marina del Rey area or Playa Vista. A lot of gaming companies are down here like Google Apple. Apple just bought a couple of buildings here and Apple’s making a big presence down here. They're finding that it's so hard for them to get people up in Northern California, because the housing industry was [crosstalk] profits. Even as expensive Southern California, this is more affordable than northern California.
Gareth: You can clearly see--
Jim: My point is just that there's so many different industries here. I mean, not to mention, you know, the film and media business.
Gareth: That’s right.
Jim: And that's another thing that we do a lot of is studio work. We don't work like on Paramount or Universal, but there's a million independent production companies and we've seen that really blossom over the last 10 years as, you know, the streaming services are voracious in terms of new content. They're always looking for new shows. And so there's a lot of independent production companies. We've done several projects for actors that you would have heard about. They set up their own production company. First [indiscernible] they need a 20,000 square foot building for the production facilities. [Crosstalk] They would have editing bays, and they have screening rooms. It's kind of a combination of high tech office and high technology. So we're doing a lot of those.
Gareth: That's exciting. I mean, that's a great diversity when it comes to project type for you guys.
Jim: So I kind of drifted. So your original question is like, why come to Southern California in terms of-- why it's a great place to work? But my answer is, there's so many different industries here and when one industry maybe struggling, no onepicks up. And so I find that the recessions here in Southern California don't hit nearly as hard as they do in other areas that are single industry focused. If you're in the Midwest, and you have-- essentially, it's based on, you know, agriculture, something. When that goes down, just everything around you just [indiscernible], the whole area goes down versus here in Southern California. Like I said, it's one industry can go down, but there's enough but--
Gareth: Yeah, it's like its own economy. It's just--
Jim: In fact, as you know, during downturns, some industries actually do better.
Gareth: Yeah, yeah.
Jim: So we find that there's enough of an even keel to keep us going. And by the way, another thing in Southern California is, as you know, there's a seismic requirements, because we're in a heavy earthquake zone here. So there's still so many older buildings that need to be retrofitted, a lot of unreinforced masonry buildings or they call them URMs here in Southern California. Buildings that were built before they really understood how rebar helped to support buildings. You're asking about earlier about some crazy things. I've seen some columns that were just basically poured concrete with a couple little pieces of rebar, like you'd see in a patio slab, just coupling up to three. It’s going up on like, this is supporting the building. It's crazy versus, you know, nowadays we look at a picture of a rebar cage it's so thick, you can't even stick your hand in. It's so thick. This is just a massive rebar because they've understood that, the strength of that. So there's a there's a big industry now of retrofitting older buildings and, you know, hospitals. They keep pushing back the deadline. But basically, within the next 10 years, every single hospital in California has to be either retrofitted or bulldozed when there's a huge industry there of this size of retrofits.
Gareth: That's a scary thought, by the way, Jim. I mean, can you imagine-- I mean, obviously, if you're going to bulldoze a hospital, or even retrofit it, you'll have a certain amount of it that can be still live, but the majority of it won't be able to I mean, that's scary.
Jim: Yeah. Now, that's a case of what you asked me earlier about isn't easy to bulldoze, I think for hospitals, from what I've seen nine times out of 10 they just scrap them and build them brand new hospital because nothing else, you know, hospitals have changed.
Gareth: That’s right.
Jim: But we're talking about or maybe, you know, 50 plus years old and just things are different now. So it's not only from a seismic standpoint, but just from a usage standpoint. A lot of times it's better off just getting at [indiscernible].
Gareth: Okay. Well let's hope this hyperinflation gets under control before we have to do that, because that'd be super expensive, you know, yourself. Hospitals are not-- they're not cheap. No commercial projects are cheap but hospitals are extortionate,
Jim: You're talking about a billion plus now for a major hospital.
Gareth: Yeah. For a decent hospital, yeah.
Jim: I don't think you can do a hospital for less than that.
Gareth: Yeah, you want to tell Bryson that he wanted to getting into healthcare next?
Jim: Yeah, we're not quite geared up for a billion dollar job.
Gareth: [Laughter] If it was up to you, I'm sure you would get [crosstalk]--
Jim: Absolutely. I would do [indiscernible] If it were up to me.
Gareth: [Laughter] So give us a quick one, before I let you go. If there's someone listening here now with three or four years experience, Project Engineer kind of toying with the idea of getting into preconstruction, what would your advice be?
Jim: For right, now's a great time to get into it because we're looking for people, and everybody I know in this business is looking for good estimators, precon people. It's a great time to get into it. What I liked about preconstruction is that I'm working with architects, I'm working with owners directly. You know, I'm in the room with the people as they're making decisions, helping them to steer their projects. If you're a project engineer, and you gotta work for a big guy that's working on one of these, you know, let's say a billion dollar hospital, right? You're getting about-- you can sit the trailer, you're going to be in charge of door and window buy out. You're gonna do nothing but doors and windows for 18 months. And, that's great experience as far as it goes, but you're not really involved in the nuts and bolts of the project. You probably never even meet the ownership of the project. You probably won't even meet the owner of your own company. Right? You know, that’s anybody but the big companies and I know I've worked for some. I've worked for Webcor for many years, which is a $2 billion company. There's pluses and minuses. There's a lot of pluses for who they come from. They have a lot of resources and tools that we don't have at the smaller companies. But my pitch for preconstruction is you're working with, like I said, working with ownership directly. And also, you're not going to be stuck on a project for two, three years, whatever it takes, sometimes longer on a big project. Our projects last. We’re constantly bouncing back and forth back. In one day, I can't ever work on one project or one day. It just doesn't work that way, because the phone rings, I pick it up, and it's something from another project. I got to jump on that. So, we're constantly kind of juggling balls, and working on multiple projects at the same time. I find that particularly interesting too, because we have to know, you've heard the phrase that you know, “Jack of all trades, master of none.” As a general contractor, you have to know well, hopefully more than a little bit, but you have to know about everything right? You have to know as much about, everything from earthwork, and underground as you knew about waterproofing, as you do about mechanical systems. You need to know everything. You need to be able to pick up the phone and talk to an elevator guy, as well as you can pick up to your glass guy. You need to understand all the components and how they go together. And so, there's not a day in this business that I don't learn something new.
Gareth: Yeah, absolutely.
Jim: That's my pitch. It's a fun way to learn about construction. It's never boring. Every day is something different.
Gareth: Absolutely. And tell you what, see? If you get on there early and you're good at it, the trajectory is quite steep, you can climb that ladder quite, quite quick because we know there's not enough preconstruction people. We know the education system doesn't properly filter them into preconstruction. I mean, like the UK, Ireland, Australia and South America, South Africa. There's no Quantity Surveying degree. So getting the niche into preconstruction, the growth opportunities are huge, and you learn so much and every day is different.
Jim: And it tends to be a little more stable and in the construction business. As we talked about recessions, you know, even though Southern California is a little more immune to it than other companies, we still recessions, and some of you have layoffs and you know, times are tough. So the people who tend to get laid off are the operations people. It's just the way it is. If you’re going to work, you don't need the operation staff as much. But when you're preconstruction, we tend to be the last to go because the company still, even when times are tough, you still need to get the work right.
Gareth: That's right. A hundred percent right.
Jim: Companies tend to hang on to their best precon people regardless of circumstances. So I think with a big company too, is, you know, we talked about that. If you're working on a billion dollar hospital project, when that hospital project is done, the company doesn't need that many people. You can't keep that many people. You might have 50 or 100 people on staff or a project that size, they can't keep you on payroll while they wait for the next job. Because the chances of another project of that same size starting exactly when that one stops won't happen. Either they overlap [indiscernible] or you have to hire a whole new crew, or there's a gap between project starts. So those big companies tend to be more of a roller coaster. People coming and going. It really depends on the projects versus-- so, that's one thing I like about this company Reaume Richardson. We're kind of a mid-sized company where we're stable enough that we're always bringing on new projects so we don't have these giant roller coasters. When projects end you know where your next project is going to start to get a little more constant.
Gareth: There's something-- I want to say there's something comforting with that as well, you know. It's something that you want to go to work knowing that there's a bit of stability there.
Jim: Absolutely. We talked earlier about the advantages of getting in construction versus maybe even some of the other industries people might be looking at after college. But, you know, again, I don't mean to scare people by saying, you're gonna get laid off after a big job but I'm saying just be smart about where you go. There's is a lot of stability in the construction business. The nice thing about construction in general is that even with prefab being as much as you do nowadays, still you can't outsource construction. You have to do construction where it is, right? So that's another pitch I would say for people that are considering getting into business is that construction is what it is. You can't build an entire building in China and ship it over. You can bring parts and pieces but it's tough to assemble it here.
Gareth: That’s right. Yeah.[Crosstalk].
Jim: Construction follow the original business.
Gareth: And that’s an incredible business as well. The people in it are incredible, that the skills, the level of satisfaction when you walk through a building or you see a building going up, that you just don't get that satisfaction in every other industry. And listen, Jim, I want to thank you honestly because I know it's early over in California. I want to thank you coming on the Preconstruction Podcast. Some of the things in your experiences that you shared, I hope this hits home with with a few people. There's loads of nuggets of wisdom in there. So I want to thank you. Now, just before I go, if there is anyone with a question or wants to follow up on a particular topic that we discussed, where's the best place to get you?
Jim: So my email is Jim@reaumerichardson.com.
Gareth: Brilliant.
Jim: They can email me at Reaume Richardson.
Gareth: What I'll do is I will put that in the show notes down below so everyone can get or anyone that's looking to speak to you can access you. Thank you very much, sir. Have a good week.
Jim: All right, Gareth. Thanks a lot. Enjoy.
[End]
