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News / August 09 2011 - Portland DJC Interviews Graham Roy

Portland DJC Interviews Graham Roy

The Portland Daily Journal of Commerce recently interviewed Graham Roy, the Director of the Portland Rider Levett Bucknall office. Please see below for the transcript of the interview.

Graham Roy is a senior vice president at Rider Levett Bucknall’s Portland office. The international firm provides construction project management and cost management services. In Oregon it has worked on several projects for the University of Oregon, Portland State University, the Portland Development Commission and the city of Portland.

Some of Rider Levett Bucknall’s recent work involves renovations of Jeld-Wen Field and Memorial Coliseum. The firm also releases a quarterly construction costs report, and follows the outlook for construction around the world.

Roy recently spoke to the DJC about the financial climate.

DJC: How has Portland experienced the last three years differently than the rest of the country, and why?

Graham Roy: In our view, Portland has lagged behind the East Coast in terms of the recession. When our offices on the East Coast were in full recession mode with projects either canceled or deferred, it seemed as though Oregon was still charging along well. Now the full impact has hit Oregon and we’re in full recession.  The Pacific Northwest may turn out to be one of the last regions to recover.

Unlike other regions, Oregon has the likes of Intel, where the level of construction has been tremendous for us. There’s also a significant amount of university work; the Oregon University System recently announced $260 million worth of capital budget over 2011-2013. In other RLB office locations,  we’ve got virtually no university work to speak of.

Our office vacancy rates are certainly not good, but they’re not as bad as other Cities and metros around the country. And although the residential market is poor, we’re seeing recent signs in places such as Bend where there’s a sign of some sustained growth.

DJC: Are you expecting a recovery in private-sector work, or is the outlook going the other direction?

Roy: Private developers are finding it incredibly difficult to get the financial lenders to support them. We have Fox Tower 2 (Park Avenue West), which has sat there for many years – somewhat due to lack of funding but also due to lack of interest in preleasing. The inactive crane on site is fairly indicative of the market.

Another example – the early master plan for the Pearl District – was to have towers and mixed use development all the way down to the river, but we’ve still got lots of gap sites down there. And now we see various built condominium development turning into apartment blocks.
F inancial lending is one of the biggest drivers to private development, and with the recent changes in the U.S. credit rating that may even become a bigger issue.

DJC: How concerned are you about S&P downgrading the U.S.’s credit rating?

Roy: That may well postpone construction that was slated to go ahead; it may well postpone it indefinitely. Projects that were on the cusp of getting the green light may have to wait until we all have a clearer idea what’s going to happen.

To encapsulate the effects for the construction industry: The long road ahead has probably become a lot longer. We also anticipate that local governments will have problems within various regions within the states, because they’ll have trouble getting financing. Higher interest rates could cause those issues.

DJC: What are your other concerns for Portland in the near future?

Roy: We are concerned about a possible labor shortage, due to a potential peak in construction.

Intel, another successful public school bond, bridge work, University work…if it all came along at the same time, that could produce a shortage in which Portland-metro has to reach out to other parts of Oregon or other states for temporary labor.

DJC: Do you expect any particular areas of opportunity over the next year?

Roy: The $260 million worth of Oregon University System funds will be very welcome. Other than that there’s the usual infrastructure work with bridges, such as the new Sellwood Bridge and a continuation of restoration work.

We don’t see any meaningful improvements in the housing market or the office market anytime soon.

With the U.S.’s national Architectural Billings Index continuing to go (down) we are looking to other regions – the usual ones, like North Africa and the Middle East. Our Asian and Australian offices are also faring better than many other regions right now.

Originally published Tuesday, August 9, 2011 by Angeles Webber. 

News / August 09 2011 - Portland DJC Interviews Graham Roy