If you have a need for quality commercial construction at great value, please send bid requests to:

Neighborhood Goods
Fashion Island, Newport Beach, CA

A Note From The President

Competitiveness In The Construction Industry

The availability of financing plays a crucial role in the construction sector, as real estate developers rely on loans to fund their projects. Higher interest rates, stringent requirements, and increased scrutiny on construction loans have resulted in a decrease in the number of approved projects. This has led to a slowdown in construction activity as owners struggle to access the capital needed to initiate or complete projects. With a highly competitive market, construction companies are accepting lower profit margins in order to secure contracts and keep their operations running. However, reduced profit margins hamper their ability to withstand unexpected costs and market fluctuations. Additionally, we have seen some sectors of the construction industry experience lay-offs, especially in commercial construction due to lack of demand, multifamily in overbuilt markets and residential remodeling as availability of discretionary spending and access to cheap mortgage debt wain.

Overall, the lending constraints faced by the real estate and construction industry are impeding its growth and causing a slowdown in construction activity. As a result we have seen pricing adjustments; owners can expect to see a stabilization to a slight decrease in construction costs if they take a project out to bid now versus six months ago. Additionally, there should be increased interest and participation in bidding projects as well as availability and timely performance amongst the subtrades. The next twelve months might not be a bad time to build if you have the capital.

If you have a need for quality commercial construction at great value, please send bid requests to:

Studio W Architects
Newport Beach, CA

A Note From The President

Higher Interest Rates vs Construction Pricing

At the close of Q1 2023, the construction industry is facing some potential challenges in the form of higher interest rates. Interest rates are a crucial factor in determining the cost of borrowing money for construction projects, and any increase in these rates will impact construction pricing. As interest rates rise, the cost of borrowing money also increases. This increase in financing costs can make it more expensive for suppliers and construction companies to access funds needed fill inventories and complete their projects. As a result, construction companies may need to adjust their pricing strategies to account for the higher cost of borrowing.

If you have a need for quality commercial construction at great value please send bid requests to:

Starbucks
Bristol & Birch, Newport Beach

Chosen by the Starbucks Corporation, Servco Builders is pleased to deliver Newport Beach’s latest coffee destination. Please stop by for a coffee at Bristol and Birch and enjoy the new modern design concept with bright and clean finishes complete with large dining area, outdoor seating and drive-through convenience.

PPG Industries
Los Angeles, CA

Servco recently built a complex, state-of-the-art aerospace manufacturing facility for PPG Industries in Los Angeles. Partnering with PPG on design/construction, Servco’s project staff answered the need for an expedited timeline in order to produce critically needed aerospace components for the US military. The build included aerospace manufacturing facilities such as clean rooms, bridge cranes, casting ovens, CNC machines, water jest and autoclave equipment.

A Note From The President

Is relief in sight for construction material price increases? As we head into a weakened economy due to interest rate hikes, housing and private sector construction starts are down but the government keeps spending on infrastructure projects.

January 2023 vs. January 2022 (YoY)

• Total construction down 14%
• Residential starts down 34%
• Non-residential starts down 2%
• Non-building starts (roads & infrastructure) up 10%

Last week I attended a construction conference and gained great insight into what companies are seeing across the country. Most civil and general contractors have noticed a decline or delay in multi-family and commercial construction projects but many of these contractors have large backlogs they are working through. Contractors focused on government projects are seeing great opportunities and remain optimistic for 2023. Labor shortages and material prices continue to erode contractor margins but to a lesser extent than last year.

Servco recently partnered with Brixton, an emerging clothing brand, and Starch Creative to complete the build out of new brick and mortar stores at three premier Southern California retail locations.

Check out what this unique local brand has to offer: Brixton

Servco was selected by the Lincoln Property Company and National Auto Loan Network (NALN) to build a revolutionary first-generation office space for NALN, elevating their corporate image with cutting edge creative office space at the new Flight office campus in Tustin.

A Note From The President

We are excited to share these projects with you. Servco takes great pride in building our Client’s vision. It is a blessing for us to be a part of their story.

Market trends: Lumber is back to pre-pandemic pricing! However other materials such as drywall, insulation and acoustical ceilings continue to show recent price increases. Overall construction pricing has leveled off and stabilized from the massive price hikes of the past few years.

 Wishing you a prosperous 2023!

If you have a need for quality commercial construction at great value please send bid requests to: