News Column

Business is improving for local architects

May 6, 2014

By Andrew Wyrich, The Record (Hackensack, N.J.)

May 06--After being hit hard by the Great Recession, North Jersey architecture firm owners say they are beginning to see more Bergen and Passaic county residents seeking their services, as the housing market gradually recovers from a historic decline.

During the downturn, architects said they were forced to lay off employees and retool their businesses to focus on the slim number of projects as the nation's housing market collapsed. Since then, they said, their businesses have picked up between 20 percent and 30 percent in billings.

"When the crash happened, it was like someone pulled the phone cord out of the wall and just turned the lights out here," said Brian Callahan, the owner of Callahan Architecture in Westwood, whose firm specializes in residential real estate. "It's been a long and slow ride back, but it's almost at the point where people are finally ready to start calling again."

The uptick in business in North Jersey comes at a time when architects nationwide have had trouble finding a definitive upward trend in new projects.

The Architecture Billing Index is a monthly survey produced by the American Institute of Architects that tracks clients that have been billed by firms and is used as an economic indicator. It came in at 50.7 in February of this year but in March clocked in at 48.8. Any number above 50 is considered billing growth.

In March 2008, the index dropped to 39.9 and did not rise above 50 until late 2010. Since then, the gauge has hovered between 48 and the low 50s, reflecting the choppiness of the housing market recovery.

Builders took out permits for 2,330 units in New Jersey in March, bringing the year-to-date total to 5,836, up 29 percent from the same period in 2013.

But architects said making it through years of lower billing forced them to think of ways to adapt their business to the economic climate, and their changes have led to new business models moving forward.

Xiomara Paredes, the principal |at Paredes-Grube Architecture in Glen Rock, said she was forced to reduce her staff to two employees from four during the recession and her firm started to take on smaller residential renovations and additions to stay in business when the market faltered.

"It was hard to do all of that, but I learned never to say no to a small project," said Paredes, whose firm specializes in residential. "Because those projects were what kept us above water a few years ago."

Paredes said that while her business was not as profitable as it was before the recession, she has seen a 25 percent jump in business since then, mostly by working on residential additions and remodeling existing homes.

Callahan said that because he is the only employee at his firm, he didn't have to reduce overhead, but instead used his time to revamp his company's website.

"It was something that I didn't have time to do before the challenging years, but because I had less jobs, I was able to focus on it," Callahan said. "I retooled myself from a marketing standpoint, and it's helping now that things are starting to look up."

Other firms said they took a different approach to weather the economic downturn.

Deborah Jones, the president of Q5 Architects in Wayne, said over the past five years her firm shifted its focus to non-profit projects such as Habitat For Humanity and community-oriented initiatives such as working on a downtown revitalization committee in Pompton Lakes.

Jones said while these projects don't add much to her bottom line, they acted as a way to increase the firm's exposure during a time when clients were not calling _ something any business whose industry is struggling can learn from.

"They helped fill in the void of work that was coming in and I was able to get a few projects from people I would meet,'' she said. "Plus, it's nice to work for the 'greater good' once in a while."

Architectural firm owners said over the past year that they have had more calls from North Jersey residents looking to build additions on their homes or remodel entire floor plans since the housing market collapse.

"I'm seeing an uptick now, and I get busy, in eight or nine months the projects I'm designing get built, which boosts the housing market," Callahan said. "Things aren't the way they were, but they are certainly looking better."




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