BE&K Builds Up

Recently Formed Building Group Ranked 12th in Southeast for 2006

By Bea Quirk

When Birmingham-based BE&K formed its BE&K Building Group subsidiary in 2004, it turned for its leadership to a seasoned executive in the construction industry known for his ability to oversee successful mergers.

Under Chairman and CEO Luther Cochrane, the Charlotte-based company has become a powerhouse in commercial construction in the Southeast with about $1 billion in contracts last year and a staff of about 700.

In its first full year of operation, BE&K Building Group ranked 10th in Southeast Construction’s Top Contractors ranking, with revenue of $476.6 million from the four-state region during 2005. In addition to its Charlotte headquarters, there are offices in Atlanta; Birmingham; Greenville, S.C.; Nashville; Orlando; Raleigh, N.C.; and Washington, DC.

Cochrane, 58, says that despite the quick rise, the “new” company’s roots go back more than 100 years. At the time of BE&K Building Group’s creation, the parent company owned Charlotte-based FN Thompson and Greenville-based Suitt Construction, but both were operating separately under their own names. At Cochrane’s suggestion, the entities were merged into one group.

“It is clear that we made the right move to bring all commercial operations together,” says Mick Goodrich, BE&K chairman and CEO. “Their improved profitability, expanded client relationships, improved safety record and sales results give us great confidence in the future.”

Today, BE&K Group provides general contracting and construction management at-risk services, focusing on health care, higher education, K-12, manufacturing/industrial and food and beverage. The company’s current backlog includes 19 projects at medical facilities in seven states, including two for the Greenville Hospital System in South Carolina.

The company also has a $50 million chemistry building underway at Florida State University in Tallahassee; a $14.7-million addition and renovation for a science building at North Carolina State University in Raleigh; and, at the University of North Carolina at Chapel Hill, 216,000 sf of facilities at its school of dentistry (a $102 million project) and the first phase of the Arts Common, a $60 million facility ro house the music department. 

The contractor’s also building high schools in Oviedo and Sanford, Fla. On the industrial side, it recently completed a $70.2-million fuselage production plant for Vought Aircraft Industries in North Charleston, S.C.

A dedication ceremony was recently held for the $155-million Mecklenburg County courthouse in Charlotte, where work has just begun on the $90-million NASCAR Hall of Fame and the adjacent office tower, a $35 million project. All three projects are being handled by Turner Thompson Davis, a joint venture created in 1998 between New York-based Turner Construction, FN Thompson (owned by BE&K) and  Charlotte-based Walter B. Davis Co.

Also, in nearby Indian Land, S.C., work is starting on the $88.5 million campus for the Inspiration Networks.

“The firm has focused on positives, from strong client relationships to a focus on adding value through preconstruction expertise, all of which has helped the BE&K Building Group grow quickly,” Goodrich says.

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Focused on Behavior

With the diversity of efforts that are geographically spread out, Cochrane is focused on behavior.

“Process is also important, but you start with behavior – taking people from different cultures, picking the best elements from each and then combining them,” he says.

It’s not the first time Cochrane has done that. An attorney by trade with his law degree from UNC Chapel Hill, he oversaw the merger of Charlotte-based McDevitt Street with Bovis of New York in 1990. He led the new entity until 1995, ran its North and South American operations until 1998 and then became the global chief executive.

In 1999, he oversaw Bovis’ sale to Australia-based Lend Lease Corp. and served as global chair and CEO of Bovis Lend Lease until 2001, when, tired of the travel involved, he returned to his former position as leader of the North and South American operations. He took early retirement from Bovis in 2004 to join BE&K.

 “Luther has very effective team-building skills,” says Lou Coletti, president of the Building Trades Employment Association in New York and a senior vice president at Bovis when Cochrane took over the helm.

“We wondered how this guy from North Carolina would fit into the New York City culture. But he learned the New York market before he made any strategic changes. Even if you disagreed with him, he made you part of the process, and you were willing to give it a chance.”

The key for Cochrane is bringing people together.

“When you have people who have worked autonomously, they don’t think of selling each other or of sharing information, opportunities and best practices,” he says. “They need to think of the whole enterprise first and then their individual profit centers. You need to bring people out of their separate silos and be collective.”

Cochrane credits the success of this approach to his management team, which includes Larry Beasley, who also joined BE&K from Bovis and is now its president and chief operating officer.

Coletti adds, “Luther used to say that without good construction services, you had nothing to sell, but without the trust of people, you couldn’t sell it.”

As Cochrane puts it, “You need technical capability, relationships and a collaborative approach.”

That’s not just among BE&K employees, but also with subs, architects, building inspectors and, most important, clients. On each of its projects, BE&K managers meet with all the stakeholders to clarify expectations and develop priorities. Looking into the future, Cochrane says BE&K will stay with its current market groups but will also add new emphases on judicial/correctional projects and the life sciences. The company is also researching the possibility of going after federal contracts, he adds.

Cochrane is upbeat about the Southeast, calling it a good market where the demographics, population and job growth, disposable income, infrastructure and quality of life will continue to make it “the place to be.”

However, he says he is worried that the continued growth could impact subcontractors’ ability to get the job done. “They are already so busy now that their capacity to do much more is in question, and if the market runs red hot for another couple of years, we’ll have real concerns about capacity,” he adds.

Cochrane says that even in the U.S., there will be more foreign competition, and that some of these companies will import their own labor force.

And he sees a number of other changes that will affect the way contractors do business. For example, he predicts that contracts will more often be a guaranteed maximum price rather than a fixed bid, and there will be more requests for fast-track construction.

He says the industry will also become more technology-driven, especially in the preconstruction stage, and that companies’ bonding capacity and financial strength will become even more important.

The industry’s stratification will increase as well, “with fewer big companies, but who will have more share of the market, and more smaller companies, with an even smaller percentage,” Cochrane says.