Suffolk sees opportunity and a ‘swift rebound’ out West | Dump Trucks Charlotte NC

Alex Barake knows California.

Before Boston-based Suffolk Construction tapped him earlier this fall to lead business development for its San Francisco-based team, Barake held a similar role for LendLease. Prior to that, he managed West Coast property investment for the recruiting firm PageGroup in Los Angeles, giving him insight on how projects get built throughout the region.

Now, as Suffolk strives to expand its reach in Northern California, Barake will use his experience on large-scale residential, mixed-use, higher education and hospitality developments to further the firm’s Western ambitions.  

Here, Barake talks with Construction Dive about what makes building different in the West, how the pandemic has played out in his market and what he wants to focus on from here.

The following has been edited for brevity and clarity.

CONSTRUCTION DIVE: Suffolk is a national contractor, but based in Boston. What is unique about the Northern California market, compared to other regions of the country? 

ALEX BARAKE: We’ve been in California since the late 1990s and have built projects from Napa to San Diego, including in San Francisco, Los Angeles and Oakland.

In Northern California specifically, we are seeing a surge in life sciences, education and affordable housing projects. Those are all areas we have a lot of experience in, so we can add value there. The region has a hyper-innovative, tech-focused workforce and is a really desirable place to live, so it has a lot of positives.

How have the impacts of the pandemic played out in Northern California for construction? Are things better or worse than on the East Coast?

Northern California was hit hard by the pandemic, particularly San Francisco’s urban core. Just look at tourism, food and beverage and commercial office building occupancy rates. Travel restrictions, remote work, inflation and supply chain have really complicated construction procurement and on-time delivery in the Bay Area.

That said, there have been bright spots, including affordable housing, higher education, data centers, destination hospitality and low-rise multifamily outside the urban core.

What are some of Suffolk’s projects in those sectors?

We’ve got quite a few. There’s the Four Seasons Resort & Residences Napa Valley; the Chicken Ranch Casino & Resort in Jamestown, California; a 148-unit low-rise multifamily community in the middle of San Francisco Bay on Treasure Island; and HomeRise’s 96 new affordable homes in San Francisco (above).

Construction is facing a lot of challenges right now: inflation, supply chain, labor shortages, rising interest rates, you name it. How are project owners reacting?

The real estate and construction firms that have thrived over the last two years have had to be nimble and adaptive. The pandemic created economic hardships for all of us, including project sponsors. But it has also provided an opportunity to hit the pause button and reassess the way we approach and add value across the building lifecycle, from start to finish.

Locally, we have seen everything from new communication methods to onsite safety protocols, technology, higher ESG targets and pivots toward new asset types, particularly life sciences.

What is your outlook for 2023? Recession or soft landing? Why?

Overall, I think this year’s manufactured slowdown will prevent the potential of a deeper recession in 2023.

It’s true that the costs to build and cost of capital are currently challenging for many in the Bay Area private real estate sector. But I think publicly funded social infrastructure projects – particularly affordable housing and education – will stay buoyant regardless.

Just historically, the region has proven resilient over the last century. Our data analytics now show a staircase increase of year-over-year construction starts over the next three years across all product types in our region. So I’m pretty confident of a relatively swift rebound.