Brian Goldberg: Partner, LG Development
Name three people/businesses that you are watching in 2011. President Obama, the new Chicago mayor and local banks and mortgage companies
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What plans do you have for your own business in 2011? We have experienced very strong growth over the past 12 months, and we feel the economy is recovering nicely, especially in our niche of high-end construction. For us, that entails residential, retail, office and restaurant projects.
All sectors seem to be experiencing increased activity, based on the work we have recently completed, like Stephanie Izard’s Girl and the Goat restaurant in the West Loop and a high-tech, 16,000-square-foot private residence in Winnetka. We’ve also recently signed a number of projects, including another Boka Group restaurant called GT Fish and Oyster, a large retail build-out in the Gold Coast and several custom single-family homes in Lincoln Park and the North Shore.
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Where will the real estate opportunities be in 2011? A heck of a lot more places than 2010!
We have been given the opportunity to bid on numerous new projects recently, and I believe architects are seeing similar opportunities for 2011. Things were pretty dismal across the industry in 2009 and the market just takes time to improve, which we started to see in 2010. Real estate is not like the stock market where prices can just start going up – there is significant, necessary ramp-up time. Construction and development can often take at least a year or more from project conception to the actual start of construction. Our firm has learned through these tough times to maximize the efficiency of our processes, thus minimizing the time it can take to begin construction.
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How many people, if any, do you plan to hire in 2011? We recently hired three project managers and an office manager, plus we plan on hiring at least another three to five employees in 2011 to satisfy our continued growth.
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Is there anything going on in the industry right now that you’d like to change? Like most people, I would like to see banks loosen up a bit more on their lending practices. I feel there is strong demand right now for quality new construction, but the lending market is still not conducive to new speculative projects. I don’t think we’ll ever see conditions like they used to be, such as no-downpayment mortgages and rates at prime, but the banks can’t ask someone to still put 30 to 40 percent down on a project that might make 10 percent on the overall cost. It doesn’t make the project worth building for the developer or owner.
I’d also like to see further help for small businesses. We lost many excellent trades and suppliers over the last few years. Their inability to get something as simple as a small credit line during a pinch had a much larger impact on their ability to function than many people realize. In some cases, a few late payments by their larger clients were enough to cause them to potentially default on loans or miss payroll and lose opportunities.
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Brian Goldberg oversees all construction operations for LG Development Group, including new project budgeting & development, conceptualization and production. Goldberg has spent 13 years developing, constructing and renovating high-end commercial and residential projects in the Chicagoland area. He can be reached at 773.227.2850 or by e-mail at brian@lgdevelopmentgroup.com.