Coastal's High Tide

Wave of condos carries contractor to new heights.

By Scott Judy

Tom Murphy is having fun.

He started out more than 35 years ago in the Keys as a carpenter's apprentice and then moved up to enclosing people's back porches in the evenings. Today, he's chairman and CEO of Miami-based Coastal Construction Group, a firm regarded as one of South Florida's premier builders of high-rise condos and other structures.

It's more than a condo builder, though. The company's luxury homes division, Coastal Homes, has built some of the most luxurious homes in South Florida, including for such celebrities as Sylvester Stallone, Dan Marino, Ray Floyd, Don Shula, Jimmy Johnson and Frank Gifford. The company also built four South Florida homes for Oprah Winfrey and remodeled Bob Vila's home. (Of the many projects she's undertaken, Winfrey called one of Coastal's efforts "the best construction experience of my life, by far.")

Overall, in 2005, the company reported $265 million in revenue and took on another $400 million worth of new jobs. Murphy estimated that Coastal has about $1 billion worth of projects under construction currently and a $650 million backlog waiting in the wings.

Industry Status

Quite a few South Florida firms have generated some big numbers building condos in recent years. And while Coastal has certainly done the same, Murphy said his firm's focus has never been solely on getting bigger.

"We're not driven by volume - period," he added. "We are not going to grow any faster than we can comfortably grow with the staff that we have. That's for sure."

Instead, the focus has been strictly on quality construction and client satisfaction. And it was Murphy's belief that he could build better than everybody else that gave him the desire to start the company in the first place in Miami in 1998.

"We just didn't see much quality construction in Miami," he said. "There was a big void for quality-oriented, customer-driven contractors in South Florida."

It's that approach and focus that's won Murphy and Coastal not only its current level of success but also the respect of clients and competitors alike.

advertisement

Rex Kirby, president and general manager with Suffolk Construction of West Palm Beach, another major player in the high-rise condo market, said: "If they are going after a job, I know they will be our biggest competition. They have good relationships with subcontractors and seem to get the jobs done.

"I do not hear anything negative about the company, which is what normally is circulating through the grapevine if things aren't going well. They're a top-notch company and (have) good people from my perspective."

Bob Moss, a longtime member of the South Florida construction community and CEO of Fort Lauderdale-based Moss & Associates, has been similarly impressed.

"They're one of the better firms in the construction business in the state of Florida," Moss said. "They're at the high end as far as their professional approach and attitude in the marketplace. They have a good reputation and well-deserved."

John F. Fish, president and CEO of Suffolk Construction, knows Tom Murphy personally - Coastal built his father's home - but is at the same time a competitor. Regardless, he's in no way shocked by the growth Coastal has experienced in recent years, growing from a $25 million company in 1995 to its current state.

"He's a very affable guy," Fish said. "He's got a tremendous amount of integrity. He's earned a lot of respect, and he's capitalized on it."

All of that, Fish said, helps set Murphy and his company apart.

"Our business is a rough-and-tumble world," Fish added. "If you can differentiate yourself with a strong sense of integrity, it goes a long way. He deserves all of the success that he's received to date, and I'm sure his success will continue."

Staying Steady

Not unlike other contractors, Coastal negotiates all of its work. Murphy sees any other way as a waste of time and an undue risk.

With "hard-bid, low-bid work, you're just looking for trouble," he said. "If some (owner) thinks it's all about the low number, they're absolutely talking to the wrong company. Everything we do is either cost-plus or it's a GMP. And we're never going to be the cheapest."

Indeed, one of the keys to Coastal's success lies in its negotiations. While focused on delivering a quality project for the owner, Murphy and other company officials are just as intent on negotiating a good deal for the company - meaning a decent profit. And Coastal has proven adept at obtaining a decent profit margin in its negotiations by pointing to its reputation for quality work.

Gil Dezer, president of Dezer Development of Miami, recently hired Coastal to build its Trump Royale project in Sunny Isles Beach. It's the final piece of a development that Dezer and co-developer Donald Trump have touted as the top of the current crop of condos.

On Murphy, Dezer said: "There's only one thing to say. He's a tough negotiator, but his word is his bond."

"The way we elect to make money is by doing a good job and not by ripping anybody off," Murphy said. "We want to be good people, doing work for good people." (He's also a little picky when it comes to owners: "You can't make a good deal with a bad guy," he says.)

In return, Murphy sees Coastal's commitment to its clients as unwavering, said Dan Whiteman, president of Coastal Construction Co., one of the firm's divisions.

"When an owner calls up and says that they don't think that something is right, (Murphy) usually takes the owner's side before he takes ours," Whiteman said. "I often say to him, 'At least give us the benefit of the doubt. At least hear our side of the story.' But his answer is always, 'Well, if it isn't right, we'll make it right.'"

Whiteman's no quality slouch, either. In addition to having owned his own construction company - before selling it to Walbridge Aldinger - he holds a doctoral degree from the University of Florida's school of construction management, where he also taught as a professor. (That's also where he would eventually meet Murphy, through two of his students - Murphy's sons, Tom C. and Sean.)

Whiteman first joined Coastal's board of directors in 1991, where he saw close-up Murphy's focus on quality. He came onboard full time in 1997 as executive vice president.

"You can't be around Tom for very long without understanding that if it's not right, he is going to have you tear it up," Whiteman said. "That's his commitment."

That philosophy has worked. In more than 35 years, Murphy said Coastal has never been to court against an owner and never needed arbitration. And, by his count, there are only six owners that he would never build for again.

Keeping Busy

Indeed, at a time when the multifamily sector is slowing down quickly, Coastal's backlog is bigger than ever, and solid.

Coastal is currently building the $160 million, 55-story Trump Royale, the third phase of the Trump-Dezer development in Sunny Isles Beach, as well as the $158 million Axis condo project in Miami, which features twin 40-story condo towers. It's also building The Edge, another Miami condo, and recently completed the Emerald at Brickell, also in Miami. It's also starting Trump Hollywood, a 42-story, 200-unit condo in Hollywood. That marks Coastal's first project for the nation's biggest multifamily developer, The Related Group,

"We're not experiencing any slowdown (in condos)," Murphy said. "There's no question with condos that the brakes are on hard. But we've been fortunate. We've worked with some really good developers, on good projects."

The senior/assisted-living market - which Murphy describes as "on fire" - will likely see more high-rise projects in the near future and is another focus of Coastal's right now.

Hotels are happening, too. Coastal's done more than 40 to date, including the Ritz-Carlton South Beach (the former DiLido), and is ready to add some of these projects to its portfolio.

"It looks like they're making a big rebound," Murphy said of this sector. "We're sniffing around a few hotels right now."

Murphy added that there's also a coming wave of office buildings, and that the firm was in negotiations on seven projects. He expected to land five of them.

Additionally, Miami-Dade County Public Schools recently awarded Coastal seven contracts totaling $53 million to build modular classroom additions at seven different school locations.

In short, a multifamily slowdown isn't scaring this condo builder.

"I think South Florida is solid," Murphy said. "I don't know what could deter growth here. It's such a diverse community. There are a lot of reasons to live here."

As for Coastal, he's forever confident.

"There's tremendous opportunity for years to come."