Since the big squeeze started four years ago, we’ve seen lots of retail companies go out of business, change locations or infill/ backfill. As survivors adjust to reality, innovative ideas continue to pop up. Two of these are on my radar at the moment: right-sizing big boxes and creative uses for excess second floor space.

Right-Sizing.

Recently, it seems healthy retailers are getting new starts and becoming healthier by “rightsizing” their current square footage. This means staying within their box, but reworking overhead in proportion to sales volume. In many cases, this plays out as a sublease of space to complimentary, non-competing retailers.

We are working with a customer right now who has a development of 90,000 sf. This single tenant will reduce their footprint by 40% as they bring in a for-profit college. This is obviously not retail, but it does solve the occupancy problem. The college will bring vitality, energy and several hundred people to the center each day.

To me, the real key is the balancing act as the economy heals. When the GDP grows, the retailer may need more space in that same location. Shorter-term leases for their new neighbor could be the answer.

Second Floor Space.

Too much big box space has a cousin: too much second floor space.

During the boom, we saw lots of good-looking proformas using upper-level open-air retail. The fact is, second floor retail works in a only few locations. Most of this space has remained vacant.

I was in Florida last week looking at a “note buy” project with some pretty good retailers below. I brainstormed with the new owner about opportunities on the second floor. Since this is a high tourist area with a heavy density of vacation condos, one idea is to create executive office space for those coming on vacation. It could provide short-term connectivity for those needing to check in on work matters for a few hours during their stay. We also discussed introducing service companies in the second floor space. While they are not retail, they bring people and life to the center.

Just like Detroit, it’s amazing what a good recession can do for us.

While it has been painful, I do believe the downturn helped get us all on the right track. Internally, we are tightening up, trying not to “waste a good recession.” We’ve gotten creative and try to help our customers do the same.

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

I’ve found that networking and connecting are two very different things. To me, “networking” means interacting with your contacts, having a clear objective top of mind. “Connecting” comes from a genuine interest in people and creates a bond based on shared interest.

Most people would rather talk to a connector.

Through the experience of years, one of the trait we’ve found across successful service industry businesses is the ability to be a solid connector. This includes construction, real estate development, design and a variety of trades in our industry. The skill comes with the job description.

Maybe a subtitle below our contractor name should be the word “connector.” We do it every day and it helps make us more successful. We get an opportunity to price a project because of quality, good delivery and a reputation for honesty. Beyond this, connecting goes a long way toward being successful.

This means a deep-seated desire to help others, expecting nothing in return. Trust me, there will be plenty of payback long-term, but that’s not the point. It’s like planting in the spring: You’ve got to have the right soil and the right seeds, and then patience.

If you have not read Malcolm Gladwell’s The Tipping Point, there’s a great chapter on Connectors. I keep copies in my office to give to people so they can better understand the concept.

Here are a few ways I connect:

• Whenever I think of someone, I record the idea on my iPhone using the voice memo button. I use this as a reminder to follow with a call or note.
• As I read the Wall Street Journal or trade publications, I’m always thinking about appropriate articles to send to those in our circle of good companies.
• I send out lots of congratulations. People always like to be recognized for their good work, and doing so makes the world a little bit better place.
• Above all, I try to help others be financially successful, connecting the dots to others. I have found over the years, putting good folks in touch with other good people often means we get a seat on the plane as well.

How do you surpass networking to connect?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

Price? Transaction experience? A combination of the two? Judging from a few meetings I’ve had recently, seems like it depends on who you talk to.

Investors. Last week, I was talking with the vice president of a publicly traded real estate REIT. He said that when considering all parts, pricing should theoretically be the same. To him, it’s about the service and the delivery. This sounds simple, but it’s easier said than done.

Petrochemicals. A major petrochemical contractor on the Gulf Coast recently that told me that in his world, many times his pricing is the same as his competitors. Then it is the “service experience of safety” that sets him apart. While he is in a unique situation (he still has money flowing in from the last 5 natural disasters) he’s had three record-breaking years in business.

Developers. This week, I was having dinner with a long-term customer in Baton Rouge who said that success in business is about delivery and quality as much as anything else. So when businesses are failing in these times, it’s not always about the economy. Good business practices will survive.

What I’m saying here is that while price is important, the experience and quality of delivery are huge factors in winning business. Service experience can theoretically equate to a dollar amounts, whether recognized or not.

I try to share with our prospective customers that the first bid is just the beginning point, it’s not the middle and it is not the end. So here’s what we do throughout a job:

• Avoid over-promising. We deliver the best cost the first time. There will always be something cheaper out there, but it’s not the final cost a customer will pay.

• Follow-up. I check in periodically throughout the job, circumventing normal lines of communication. I want to ensure to we are delivering.

• Adjust. When tweaks are needed, we make them immediately.

• Stay on time. We close out ontime with quality and this leads to repeat business.

• Keep it “fun.” Then we get to do it again.

How do cost and experience balance in your industry?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

If “your stitches reflect your character,” as Bettye Kimbrell’s grandmother taught her, then Bettye is imaginative, determined and enduring.

We think Grandmother got it just right.

Stewart Perry has been fortunate to know the talented Mrs. Kimbrell, a 75-year-old quilter from Mt. Olive, Alabama, for quite a while.

Over the years, she’s made us a series of three quilts. This piece called “Tree-o Ta-Li” was finished in December 2011 and is the final installment.

Beyond the initial beauty of the quilts, the intricate patterns and colors borrowed from nature are what make the pieces so special. All three quilts were designed by Bettye and her daughters Nina Harvey and Cindy Denton.

They used a method called “Cherokee leaf pounding” to color the arrangement. Leaves and plant material are taped to an all natural fabric, then pounded with a mallet. This transfers the chlorophyll from the plant to the cloth. Cherokee Indians first used this technique to decorate their tents, and Bettye carried on the tradition for us. Tree-o Ta-Li took Bettye and her daughters 8 months from start to finish.

The images above show the quilt draped over our kitchen table, just long enough to steal a few shots. As soon as we can get it carefully pressed and preserved, we will be proud to have Bettye’s beautiful art displayed in our office. The additional pieces will be loaned to the Birmingham Museum of Art.

To us, beyond our construction services, we place great value in the arts, and do what we can to support the great work coming out of our community. Big or small, what do you do to support the arts?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

About this time last year, the Birmingham Business Journal published an article titled “Frugal by Design.” They talked with local architects about something that I truly think is national in interest: the changing landscape of the building business.

Three trends were identified that I’ve seen do nothing but grow over the last year. In fact, we’ve been involved in each:

1. Sustainable buildings. How can we build with the least environmental impact, now and down the road?

(Image: Ruffner Mountain nature center, which we built to LEED specifications)

2. Durable building materials. What is the upfront cost vs the cost over a building’s lifecycle?

(Image: LED Light poles we installed at a Florence, Alabama shopping center currently under construction)

 
3. Transforming existing structures. How can we breath new life into existing buildings?

(Image: The Waters Building, a circa 1880s structure we reworked in downtown Birmingham)

We have constructed multiple LEED projects over the last few years, for the right reason: sustainability. We have taken the time to evaluate new material types and equipment, including high-efficiency mechanical systems. We have re-purposed old buildings and in the process given them new lives.

These trends seem to be interlocking. 

Recently, we were awarded a project for an environmental learning Center in the Southwest. In the process, we will transform a previous ice skating rink which is no longer in demand into an educational facility. This might be a double leverage. We will update an existing building and in turn help educate students in environmental fields.

To me, we need to start thinking long(er) term, not necessarily the way we have always done things over the past few decades. We hope to truly take advantage of what we have faced the last few years with the intent of benefiting future generations.

Did your business see a rise in the three “frugal by design” principles? What do you see ahead for 2012?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

Birmingham Mayor William Bell assists with ground breaking at ILR

There is something special about every project we build. Some bring vitality to communities. Adaptive reuse breathes new life into existing–often historical–buildings. LEED projects promote sustainability.

Last fall, we broke ground on a project that was more than special. It’s an honor.

Independent Living Resources provides community-based, non-residential services and advocacy for those living with disabilities. The new location we are building in Birmingham’s Civil Rights District seems more than fitting. As IRL Executive Director Dan Kessler, told The Birmingham News, “Human rights is a part of (the Civil Rights) mission, and disability rights is big part of that movement.”

Beyond all ILR gives the community, what most impressed us about their folks was the focus on something called Universal Design.

Universal Design centers on accessibility for as many people as possible. This can be in the form of environments, objects and systems. For followers of the concept, buildings should to be usable to the greatest extent possible by everyone, regardless of their age, ability or status in life.

Independent Living Resources is able to take universal design to a new level, because the majority of people on staff have disabilities. Involving them in the design process has been particularly enlightening.

Here are a few ways Universal Design is being used at ILR:

Door Openers. Standard accessible entrances include a push button for access, which excludes those who lack upper body mobility. ILR will be installing a version that can be activated using a wheelchair footrest. These will be placed inside and outside at the front and back doors.

Quiet Room. Individuals with stress disabilities or those prone to migraines can use this space to relax. It will be equipped with a daybed, and no cell phones or work materials are allowed inside.

Parking spaces. The 14 spaces closest to the building are divided by bollards and feature a detectable paver system for the vision-impaired. This also provides good visual separation for all drivers.

HVAC. The building has been divided into smaller HVAC zones, giving more control of the temperature in personal workspace and increasing the comfort of those people who work and visit.

Workstations. Areas such as the reception desk will have low and high transaction counters for better access for those who are doing business from a wheelchair.

Light. The lighting has been designed to minimize triggers for people who suffer seizures and other similar conditions. The open workspace features lots of windows, and glass partitions let the light flow throughout the office.

Site Selection. The building is located with convenient access to public transportation and sidewalks have been modified with ramps down to the street for access by people with disabilities.

Community Connectivity. The site is within walking distance of the power and gas utility companies, the Social Security office, and several other public buildings and community service organizations.

What we’re learning is that the principles of Universal Design make sense. Open spaces, wider halls, additional light and facilities that can be modified don’t just benefit people with disabilities. They make buildings better for us all.

What accessibility changes have you made to make your facilities better for everyone?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

Might be over-exposed.

That’s what the Wall Street Journal, “Indecent Exposure: The Downsides of Working in a Glass Office” says, anyway. With all the talk about the benefits of open design, no one seemed to consider the pitfalls. Here are a few the WSJ identified:

• Privacy on personal matters, where human resources or other private meetings are made public, just because they can be seen.
• The “fish bowl”effect, where coworkers find themselves exposed or distracted by their ability to see others.
• The “Bird”effect, where people don’t see glass and walk right into it.
• The noise factor, because glass walls allow 50-100% more noise to pass through.

As I’ve mentioned, when it was time for us to build our own campus, we worked hard to create the perfect workspace. After consulting with a few members of our team, my original thoughts for an entirely open workspace were overruled.

We ended up with what I believe is the perfect mix of openness and privacy. Each office has two glass walls–one to the outside and one facing inside. The interior walls have solid doors that shut, although we leave them open most of the time. We’ve dedicated lots of space to common areas. For us, it works.

Obviously, people need to work on their own many times, but a little bit of help never hurts. The mostly-open environment has been a real plus. If I had it to do all over again I would build office exactly the same way.

Here are a few images of our place under construction:

Our conference room, a mix of glass and solid walls, under construction.

Solid doors are flanked by glass.

Offices--light and bright--on either side of the hall.

Decals on our windows deflect birds...and people.

All outside walls are lined in windows.

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

Recently, we completed two projects using LED lighting for the parking fields. I thought it would be helpful to share a few basic observations and thoughts:

PROS:

Energy Efficiency. Conventional lighting wastes a high percentage of energy through heat, while LEDs remain cool. This makes these bulbs much more energy efficient. In total, LEDs consume about 50 to 60% less energy for similar lighting levels.

ROI. Since LED energy savings are significant, this should offset higher upfront capital cost for materials. In most cases (if the CAM component recapture can be determined) a payback will be seen within the 4 to 6 year range.

Lower CAM. Common area maintenance costs are lowered by the greater efficiency of LED.

Longevity. LED bulbs will last about 15 years, compared to the standards of parking area lighting today (3-4 years). LED bulbs also contain no glass components, so they are not vulnerable to vibration or breakage like conventional bulbs.

CONS:

Cost. Even though the price of LEDs has halved in the past three years, it’s still twice as expensive as more traditional high pressure sodium lights. Meanwhile, if the parking field lighting does not work for your project, we have also found LEDs in their present cost structure are excellent for canopies, parking decks, wall-mounted fixtures and common areas in malls.

Fixturing. For existing properties, installation will mean mounting more LED fixtures on an existing pole. LED traditionally has required lower mounting heights creating a need to add additional poles to existing projects. I believe this is changing, as there are new types of LED fixtures designed for mounting heights in the 35′ tall range.

Light levels. More LED bulbs are needed to provide similar light levels, compared to metal halide fixtures, which are less expensive initially. LED Light levels are not as bright when measured by traditional photopic light meter. If light readings are taken scotopically, which is how the eye actually sees light, the whiter light of LED appears brighter.

ALTERNATIVES:

For existing properties, one may wish to consider the use of Natural White, a hybrid metal halide product which burns for 26,000+ hours and hardly depreciates in quality of light during this period. Add a sophisticated control product like netLiNK, and properties should be able to get 8+ years out of this system for less money than LED at its current capital cost.

This is certainly an education period for all of us. While LEDs are a little more work on the front end, to us, using less energy is better for our communities and for the future generations. 

What have you experience have you had with LEDs?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

We like to consider the folks we work with an extended family. And, like most families, Stewart Perry has a few holiday traditions.

Every year, we pick a weekend in December for all the team members who work on job sites come to our home office. We get a few meetings out of the way Friday afternoon, then dedicate the weekend to bringing our work family together with our spouses and kids. We have a brunch on campus Saturday morning and top the weekend off with a celebration at my house that evening.

This year, we added a new tradition.

Friday night, we invited a few of our long-term vendors and subcontractor relationships to our place. We started with beverages in the office, then moved outside. The Spoonfed Grill food truck was parked out front to provide some wonderful fish and chicken tacos, along with other delights that we enjoyed by the campfire.

The result was a chance for our team to shake hands with folks who help make us successful every week of the year.

A couple of our guys approached me afterwards, telling me they liked giving this kind of simple thank you to valued partners. They were also glad to further their relationships on a more personal level by talking about something other than work. The simple, face-to-face connect makes our ties run even deeper.

Have you thanked your partners this holiday season?

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email

Negotiation is a part of our business, and for that matter, most things in life.

CBS MoneyWatch recently posted 12 Negotiation Tips for People Who Hate Negotiating, and I was inclined to listen. Here they are:

1. Go first.
2. Be quiet.
3. Know what you want.
4. Assume the best case.
5. Avoid setting ranges.
6. Have a reason for concessions.
7. Never be Harry Truman.
8. Make time your friend.
9. Ignore face value.
10. Give the other person room.
11. Forget about winning and losing.
12. Create a lasting relationship.

While I find all these tips helpful, numbers 7 and 12 seemed particularly important to me.

Never be Harry Truman. He had a sign on his desk that said, “the buck stops here,” as a reminder that final decisions rested with him. It seems to me, if one adopts this attitude at the negotiating table, he will miss out on a lot of good opportunities.

Create a relationship. As I’ve mentioned before, you don’t get to make “second first impressions.” The way you negotiate today will certainly affect your business in the future. If I make concessions now, I always try to consider impact down the road. A long-term customer relationship is, in most cases, far more valuable than whatever details you might quibble about today.

Do you have additional tips for successful negotiating? 

Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email