Architects escape economic slowdown

Architecture firms—like many real estate companies—are facing hard times.

The American Institute of Architects’ October 2008 Architecture Billings Index (ABI) paints a bleak picture for the next nine months to 12 months. After three months of signs of greater stability in the industry, the ABI fell by more than six points in September.

On the West Coast however, some sustainable design firms—while not exactly bullish—are insisting they are relatively stable, if cautious, at the outset of one of the worst economic crises in American history.

“SERA is holding our own,” says Clark Brockman, associate principal and director of sustainability resources at Portland-based SERA Architects. “We’re hopeful for a stable 2009 but we don’t see an expansive 2009.”

In Seattle, the feeling is much the same, according to Allyn Stellmacher, design partner with Zimmer, Gunsul, Frasca Architects, a firm with offices in Seattle, Portland, Los Angeles and on the East Coast. “We feel confident but careful about opportunities coming in the door.”

And at the much larger firm of Perkins+Will, with 1,800 employees spread out across the globe, including 100 in San Francisco, business is clipping along, says Howard Weiss, principal of the firm’s San Francisco office. “We have had…a banner year.”
Two types of glue seem to be holding these and other sustainable-minded firms together. One is the firms’ deep experience with sustainable architecture and the other is institutional contracts.

SERA had a round of layoffs in January 2009, but Brockman says his sustainability department is “completely maxed out” and that 80 percent of the projects currently coming through the firm are seeking some level of U.S. Green Building Council Leadership in Energy Efficient Development (LEED) certification. He notes that analysis work for sustainable building policy proposals in various jurisdictions is also a lucrative piece of
SERA’s business right now.

The other base for West Coast design firms continues to be institutional clients, thanks to green building mandates being passed in more jurisdictions, according to Weiss who also says he believes that more work for governments is going to come in the door as jurisdictions try to shore up the private sector with jobs.

Brockman and Stellmacher agree that institutional clients—especially those with whom the firms have established relationships—are likely to be their firms’ bread and butter in 2009.

“We’ve all seen that with the rattling with some of these [credit] issues in the market, clients with strong bonding potential, are moving forward,” Stellmacher says. “We still are seeing a lot of major health care institutions that need space. They’re certainly being careful about their bonding, but those projects are in the pipeline.”

Still, the market is as uncertain as it has ever been, and firms smaller than Perkins+Will are cautious about what 2009 will bring.

“As recently as four to six weeks ago, we were really busy with the possibility of expansion,” Brockman says. “Recent developments in the financial market means clients are holding in a wait and see mode. There is still enough work to keep everyone here busy, but we’re not hiring. If some of the wait and see things go, we’ll be busy again.”