Most large cities are symbolized as a skyline—a compact mass of tall buildings, with distinguished structures vying for your attention. Glance out an airplane window as you fly over the New York City tristate area, though, and you’ll not only see skyscrapers dotting the terrain below, but also stretches of commercial neighborhoods amongst those large sections of high-rises.
As a leading commercial builder in the tristate area Tom Barrett, owner of Barrett Builders LLC, understands that even if those commercial developments don’t reach the same dizzying heights as city skyscrapers, the real estate and land planning deserves no lesser amount of attention. Barrett is passionate about constructing, developing, and managing commercial, hospitality, and mission-critical facilities. The company seeks to raise the standard of leadership, process, and service to the highest possible level for their clients.
Founded in early 2008, Barrett Builders is a real estate development and project management services business that has deep roots in the financial services and corporate real estate sectors. The company has managed more than $1 billion of work in the past seven years.
The firm provides both “for fee” and “at risk” development and project services domestically. From due-diligence to migration, lease up or sell out, Barrett has been involved in planning and executing several world-class, multi-billion-dollar mixed-use projects in the last decade. Some of the firm’s clients include BMW, Deutsche Bank, Federal Reserve Bank NY, Fireman Capital Partners, Goldman Sachs, JP Morgan Chase, Soros Fund Management, and Stratasys.
So what makes Barrett Builders stand out from the proverbial crowd? “The first is our culture—we truly understand the risks our clients take when planning and executing real estate projects,” Barrett says. “We hire experienced leaders with diverse backgrounds in the real-estate market with values that look past ego and focus on merit and value in our work.”
In fact, Barrett runs a lean business, overseeing six professionals that managed more than $165 million of work for clients in 2014.
“I think I am one of the last managers I know of who still subscribes to those clockwise quality circles we learned in the 1980s, where the employer supports the employees and the employees take care of the clients and the clients look to give repeat business,” he says. Although he is the founder and owner as well as the president, he says, “no one is evaluated based on tenure or titles, but rather on merit.”
What also makes Barrett Builders unique is the firm’s ability to both lead a project as the project manager and still provide construction management services throughout the entire project. The firm has held the contracts for various pre-purchased items and many “owner-supplied trades” including AV, equipment, furniture fixtures, and security—making the project as cost-effective, efficient, and streamlined as possible. This method saves the owner a 10- to 15-percent markup, Barrett says.
For example, as the project manager for a $66 million, 125,000 square-foot build out for a major hedge fund, Barrett Builders netted the client $540,000 in fees by managing the AV, security trades, and voice and data cabling directly as part of its project management fee.
Barrett Builders also espouses an appetite for risk. The company counsels clients as project managers to bid out all disciplines and trades to try to sell as many costs and schedule risk to the market as is reasonably priced.
“Therefore when we build for a client, we are not shy about putting our own capital at risk to prove it,” Barrett says. “It is all about risk management. Defining the risk, and most importantly, defining the probability of the risk is the challenge. I hear from our clients that we save them time and money through our hard-nosed, process-oriented management style.”
Makerbot, a 3D printing company and unit of Stratasys, has been a client of Barrett Buildings for four years. The latest project just completed for Makerbot was a 160,000-square-foot fit out in Brooklyn, New York. Barrett won a competitively bid general contracting contract that required the firm to pre-purchase $450,000 of HVAC equipment at risk without a commitment in order to make the schedule. Barrett also painted two full warehouse floors out of its own pocket to show the client that, after a deal is made, Barrett Builders’ focus is on quality to exceed expectation. “It may not make good economic sense in the short term, but in the long run with repeat clients, it pays off well,” Barrett says.
Barrett works hard at making sure his company’s culture is a meritocracy built on core values like honesty, respect, and a strong work ethic.
“We drive for value in everything we do, and respect the privilege our clients give us in helping them spend their money on projects,” Barrett says. “I always remind our people that it is a privilege and not a right to be a part of team. We must continue to earn that privilege.”
Understanding the Risk Profile Analysis
When Barrett Builders is hired as a project manager by clients, the company starts project-objectives planning with a risk profile on the project. It then shapes a work plan to mitigate and transfer as much of that risk as the client wants and the market will fairly price.
“One of the biggest risk drivers is process, or lack of it,” Barrett says. “A lack of process can quickly effect decision making and sign offs on the owner’s side, which will quickly have an impact on schedule, and thus, cost.”
Most projects teams, if properly built, will move fast with design drawings as decisions are made. However, most corporate clients have multiple stakeholder departments—such as IT, legal, procurement, risk, security, and various internal groups—all of which can create red tape for making decisions.
Therefore, Barrett Builders puts an emphasis on defining and managing the decision-making process and the sign-off process—both of which can affect project costs.
The profile includes factors such as management structure, market forces, operational issues, and even regional weather. Once the profile is built, Barrett Builders then assembles a plan in collaboration with the client to help frame the probability of each of the risks based on what they know at that time.
For example, if the schedule is extremely fast from the outset, then Barrett Builders prioritizes the procurement strategy as a way to mitigate some schedule risk with a CM construct in lieu of a stipulated sum.
“However, the CM approach has cost-certainty challenges, so we might look to bid to only CM firms to be sure we get solid procurement teams, etc.” Barrett says. “Experience plays a central role in building and leading high-performance teams with a scalable, flexible plan to meet project goals as key to success.”