Each quarter we will introduce a member of our team to share their real-time perspective of current construction industry trends and thoughts for the future as it relates to their particular role…
Meet Charlie Pond, VP Development
Over my 20 years in the construction industry, I have worked through all facets of development and construction, including site selection, due diligence, feasibility analyses, client representation, design, value engineering, bidding, and construction management.
I was not always on the fast track to development though- I initially wanted to be an architect. In high school, I hand-drew three full sets of house plans and submitted them for a county wide Home Builders Association competition. To my surprise, two of the three won and were sent on to be constructed by a home builder. I loved drawing plans (including the set for my current home), but even as an adolescent felt that I wasn’t suited to spending my days behind a desk.
I pursued civil engineering instead, earning my degree from the University of Kentucky, and took my first job as a Project Engineer with Hunt Construction Group (formerly Huber Hunt & Nichols) on the Procter and Gamble and Great American Ball Park projects. That was a great experience, but at that point I still hadn’t quite found my niche. When I shifted my focus to business development, there was not a defined development role where I was working at the time. However, the leadership recognized that we couldn’t just manage projects in order to grow our business we needed to create relationships.
As I’ve grown in this industry, I have watched Cincinnati put itself on the map as a place for growing development. It is a constantly changing market that generates new opportunities across varying industries. It is fascinating to work on an industrial project one day, a senior care development the next, and a multi-use residential all in the same week. Meeting clients with different needs across different sectors makes each day unique and exciting.
Current Development Trends and Roadblocks
It seems like there are still a ton of projects out there. Unfortunately, lenders are still a little more conservative than the real estate community would like – post recession regulations are slowing or even stopping some project growth. The positive is that there is an influx of equity looking to invest in real estate. We are seeing equity from outside the city as well as considerable local private/equity actively investing in the market. There is a more recent trend of national and international firms looking outside the Tier 1 markets (i.e. New York, Boston, San Francisco, Los Angeles and Miami) where the market is fairly saturated. They appear to be shifting their focus to high growth markets in tertiary cities like Cincinnati.
The industrial sector is definitely the hottest right now. Senior care, healthcare, hospitality and multi-family are all in positive growth mode. Office and retail are struggling, so we are not seeing a lot of new construction in that sector. The “Last Mile” concept could help currently vacant retail box stores find new life. The Last Mile refers to the need for point of last mile distribution to expedite delivery of online products as more retailers enter the online shopping and shipping model.
Locally, we are seeing growth nodes focused along the I-71 and I-75 corridors, as well as urban downtown, uptown, the Oakley/Norwood area, CVG airport, and Liberty Township along Liberty Way. The Dayton market continues to experience resurgence in development, including Austin Landing in Miamisburg, the I-675 corridor, and the Water Street/East downtown district.
The Next 5 Years
We’re anticipating significant opportunities in the market over at least the next two years. However, between rising interest rates, construction material costs and the current labor shortage, we are also anticipating some challenges in new project starts. The labor shortage is being recognized across the board and more vocational programs and technical schools are working to position themselves as an attractive alternative to a four-year degree. The next 3-5 years should be interesting as we see the impact of these current limitations and how the industry adapts.
Charlie Pond has a BS in Civil Engineering and a Masters in Civil Engineering, Construction Management and Land Development from the University of Kentucky. He is a member of the Urban Land Institute, International Council of Shopping Centers, and CREW Cincinnati and a Board Member of NAIOP of Greater Cincinnati (former President). He has been Vice President of Development at Oswald Company, Inc. since 2012.