Business Wire, 08.17.2010

Company Weathering Construction Storm with Smart Management, Prudent Decisions

MINNEAPOLIS -- It's no secret that the commercial construction industry has taken a hit during the recent recession. Most major projects have been delayed or put on hold, and others have been cut all together. Kraus-Anderson Construction Company (KA), one of the Midwest's oldest and largest commercial general contractors and construction managers, has also seen a significant downturn. The company enjoyed annual revenues in 2006 that topped $800 million, up $100 million from the year before. Then came the recession and a decline in its overall business, dropping last year's revenues to $473 million.

But having remained a construction leader for over a century, KA has survived economic downturns before, including a stock market collapse, followed by the Great Depression. That experience - and wisdom - played a key role in patiently and strategically making decisions, which are paying off today. Over just the last two months, the company signed and/or started more than $372 million in new business - nearly eighty percent of its annual revenues posted last year.

"We did not just hold our breath, waiting for the tide to change," said Alan A. Gerhardt, KA's chief operating officer. "Like most other businesses, we had to make some tough choices, including consolidating our four metro-area offices into two, and moving all yard, accounting and IT functions to a single location. But we did not panic. We went on the offensive and marketed."

Privately held KA has built a century-long history of diverse project work that reads like a "who's who." The company has deliberately broadened its portfolio to include multiple sectors, including education, healthcare, senior housing, biotech and life science, technology, government, entertainment, hospitality, retail, industrial and more.

Privately held KA has built a century-long history of diverse project work that reads like a "who's who." The company has deliberately broadened its portfolio to include multiple sectors, including education, healthcare, senior housing, biotech and life science, technology, government, entertainment, hospitality, retail, industrial and more.

"It was clear that projects in certain industries would remain in a holding pattern, so we directed our attention to those sectors where major construction was more likely," said Gerhardt. "We maintain extremely strong relationships and deep experience in all corners of construction, and diligently sought out work in growing industries. We had been selected for a number of significant projects but had not yet broken ground. That lead time to sign new projects can take years and we are now seeing the fruits of our labor."

Gerhardt's optimism is coupled by an improvement in commercial lending, which positively affects growth for KA as well as in the construction industry. Access to financing has been an issue for clients who wish to bring approved projects to the market.........read more