Redwood City-based DPR Construction is hiring new engineers and summer interns to staff its Bay Area, Southern California and Phoenix offices at a pace similar to that of the late 1990s.
Despite an expectation that health care construction will wind down in the next two or three years after billions of dollars in expenditures in the last decade or so, Eric Lamb, a DPR executive vice president, said their outlook for the Bay Area “is very bullish.”
“By 2015 and 2016 most of the larger acute-care hospitals will be done, but the technology companies and the other offices that are part of the tech industry, I think we have a good four years and maybe more,” Lamb said. “The Bay Area is very strong. We are very bullish, and we are hiring.”
The company has extended offers to 15 newly graduating engineers recruited from regional colleges and universities but has realized it will have to retain more. “We have not hired this many since 2000 or 2001,” he said.
From its Northern California roots as a technical builder for semiconductor and biotechnology companies, DPR has grown in the last decade to become a national general contractor. On April 15, the company completed its first-ever acquisition, buying Atlanta-based Hardin Construction Co. LLC. The two companies combine operations in Houston and Austin, Texas, and the Southeast including West Palm Beach, Fla.
DPR now has 18 offices nationwide, though the Bay Area remains its strongest market, Lamb said. The company is working as a general contractor on some of the region’s most high-profile projects including the $1.5 billion UCSF Medical Center at Mission Bay and the Lucile Packard Children’s Hospital expansion, both expected in 2015, and the new Apple Inc. campus in Cupertino, which it is doing with Skanska.
The deal for Hardin was struck after the Atlanta company approached DPR, which looked upon the buy as an opportunity to spark its growth in Southeast markets where it has been dissatisfied with its performance. “Our Atlanta and Florida operations were not doing as well as we wanted. It was just slow; it’s hard for any building contractor to enter a new market without the talent and local expertise,” Lamb said.
The joint operation is expected to have seven offices and more than 500 professional staff and craft employees. DPR predicts it will achieve $2.8 billion in 2013 revenue including $800 million or more from its new offices. Terms of the deal were not disclosed.
The quest for a national footprint was a push to diversify the company’s business base and to respond to demand from its national customers including Oakland-based Kaiser Permanente, for which DPR is now doing work in Atlanta. “We are doing an incredibly complicated set of data centers for [Menlo Park-based] Facebook with highly efficient mechanical systems using radiant cooling and raised floors. It’s all about saving energy, and you have to be on your game,” Lamb said. The projects are in Oregon, North Carolina and Sweden.
Based on what DPR sees in Atlanta, the West Coast is leading adoption of sustainable building practices. In the Bay Area, the regional mindset on certification under the Leadership in Energy and Environmental Design, or LEED, program has given way to demand for better and better building performance and efficiency, he said. That evolution is just beginning in Atlanta.
Despite the optimistic outlook for the Bay Area, DPR still is not seeing a strong return to market from the area’s mid-sized companies. Announcements from companies like Google Inc., Apple, Nvidia Corp. and Samsung Semiconductor Inc. about large new corporate campuses have created excitement, but “there is still a gap in the middle part of the market,” Lamb said. “It is still not as heated as 1998 and 1999.”