Grand Rapids-based Integrated Architecture LLC is coming off a year with many transformative development projects, including Studio Park and Bridge Street Market. While being as diversified as possible, the firm also will focus on how it can contribute to solutions to the housing crisis in 2020, said Mike Corby, executive vice president at Integrated Architecture. Overall, he feels optimistic, yet cautious, for 2020.
This was a year of big projects for Integrated. What’s next?
In terms of the larger projects, we are working on the final phase of Studio Park, the new Acrisure LLC headquarters. That’s going to be a great project. This is kind of the last major piece of the first phase of the development. We’ve got a lot of other things going on downtown with a couple of projects … and we have a project coming up with Blodgett Hospital this year. We were awarded another project with the University of Michigan and a lot of other housing and development projects are on the books.
What makes the upcoming year different from 2019?
The thing that was interesting is we’re really getting a strong focus on housing, and in particular housing that’s trying to help serve a market that’s not been very well served. We’re still doing a lot of market-rate housing. Housing is a big deal with a lot of our clients and it’s going to be a continued project type that’s going to be pretty important just because every community seems to have a housing need right now. But I think it’s a cautious year. It’s just one of those years where you’re not sure which direction it’ll head, but it seems like there’s a lot on the horizon. We’re very optimistic.
What’s causing the caution?
On the housing and development side, the costs of construction are quite high. Rents are kind of limited by the market, whereas construction costs basically can rise independently. The big challenge right now is being able to build something cost effectively and be able to get enough rent or sales price to cover the cost of construction, as well as to give the developers some measure of profits. The incentives that West Michigan was very fortunate to get over the course of maybe a 10- or 15-year period are not as available anymore. Developers and contractors and architects are having to figure out different ways to make the equations work better. But I think it’s just construction prices are quite high and the markets are stabilized in terms of rents and things like that.
Are you concerned about a slowdown in the economy?
I tend to operate with a great deal of caution and paranoia anyway. Our business is a very cyclical business. Typically, the cycle is a seven-year cycle and we’re going on our 10th year of fairly steady, decent markets. You’d be foolish not to be concerned. It’s interesting, though: The R-word really doesn’t come up much with clients, which is good.
The feeling that I sense is business as usual, understanding that construction costs are high and you have to figure that out. But the other thing about our particular business is our office is very diversified. We’re doing work in the corporate market, we’re doing work in the health care market, we’re doing work in the housing market. We’re still responding to a lot of proposals, both in terms of the corporate sector, but also the institutional sectors like colleges and universities. They still seem to have projects in the pipeline. As long as we can secure a few of those, we’ll be good.
You mentioned spending time on housing projects. What does that entail?
As a firm, we’ve got an internal housing think tank that’s really trying to understand architects’ and designers’ roles in helping solve the housing crisis. We’ve really started to look at designing communities — unit housing design, how we can fit efficiencies in the design that will make the projects cost less yet still be quite livable. We’re working with organizations like Housing Next and we’re working with Michigan Community Capital. These are all organizations that have a strong housing mission. 2020 for us, it’s business as usual in terms of the project types, but I think there’s going to continue to be a strong focus on how we can help solve the housing issues that communities in West Michigan and Michigan in total are experiencing.
What made you want to get involved in that?
We saw the writing on the wall maybe about four years ago. We’ve started to look at unit design and getting smaller units because, obviously, the smaller the price of architecture square footage wise, presumably the less costly it will be. There’s opportunity. Just from that perspective, there aren’t a lot of firms that are looking at it. Both developers and architects tend to gravitate toward what they know best. There needs to be some design solutions that can address it proactively versus just hoping that we can figure out a way to cut a few dollars here and there. Design in this instance might play a very strong role in helping — along with other partners in the whole process — to solve the housing crisis.
What else are you watching for 2020?
I don’t sense any pessimism with clients, or anything but optimism right now. That doesn’t mean that there’s not something looming out there, but generally the sentiment out there is people are still focusing on doing projects and that’s a positive thing. It’s definitely something that tells me that this year should be another reasonable, decent year versus a year that maybe isn’t so good. But we’ll see.
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