There are several types of construction, all which serve different industries and purposes. There are three main sectors of the construction industry; buildings, infrastructure, and industrial. Buildings can further be broken down into residential and non-residential.
Industrial construction traditionally refers to any business dealing with manufacturing goods. So what is commercial construction? “Commercial” refers to any business done with the sole motive of gaining profit. Commercial construction is the business of building and leasing or selling spaces in the private sector. The Oxford dictionary says that industrial is “designed or suitable for use in industry” and that commercial is “concerned or engaged in commerce.”
Commercial construction is a broad field with several different project types for a variety of different industries. Some of the most common and popular types of commercial construction projects are:
- Hospitality, including restaurants, hotels, and lodges
- Retail & office facilities, which may also include grocery stores
- Industrial structures such as factories or warehouses
- Sporting facilities or shopping malls
- Medical facilities ranging from small offices to large-scale hospitals
- Institutional and/or government buildings, this may include schools and universities
- High-rises and skyscrapers
- Multi-family and senior housing facilities.
Projects in the commercial construction sector can vary vastly in scope or size. Whether it’s a small office renovation or adding an entire new wing to a hospital, commercial projects can vary vastly in size from small to large.
Small-scale commercial construction projects often include redesigns that are common with rebranding or structural updates.
Medium-scale commercial construction projects consist of building restructures, expansions, and remodels.
Large-scale commercial construction projects would be considered ground-up construction. These are long, multiple-phase, time-consuming projects that involve extensive planning & preparation.
All commercial construction projects, regardless of their size, typically follow the same process and plan of action. The main phases of construction can be broken down into the pre-construction, construction, and post-construction phases.
1. Strategic Development: During the developmental phase, the client will meet with a project manager to review their wants, needs, and an initial budget in order to develop a strategic plan. The strategic plan will break the overall project down into smaller parts that are more manageable.
2. Design: During this phase of the project, architects and engineers will collaborate to produce blueprints for the project that are structurally sound, safe, and incorporate the design elements that their client wants.
3. Permits: Depending on whether or not entitlements are required or how many overlapping authorities are involved, permitting can take months or even years to complete. The project manager is typically responsible for gathering all the necessary permits to proceed with the project.
4. Bidding: Here is when the project manager will start accepting bids from general contractors, if one hasn’t already been chosen, for the project execution. It’s important to properly vet all general contractors to make sure they are properly licensed, insured, and reputable. Here’s what to look for in a general contractor. The general contractor will then accept bids from subcontractors for any remaining work.
5. Procurement Phase: An essential part of the pre-construction phase is securing the resources, equipment, and materials needed to successfully complete the project. Accurate planning here will help to significantly improve efficiency and reduce unnecessary costs.
This is the phase where the clients vision becomes reality. It’s exciting and rewarding, but it’s also risky. A big part of the construction phase is effective risk management. Some risk (like the weather) is beyond what the project manager can control. But human variables and errors can have costly consequences on the construction phase if not managed properly and could impact the entire scope of the project.
Construction occurs linearly, in other words, the majority of the time one portion of the project can not be started until the previous is completed. “A” must be completed in order to move on to “B.” It’s important that the project manager practices the utmost attention to detail and due diligence in order to prevent errors before they happen and to correct them in a timely and cost effective manner when they do so that other phases of the project don’t fall behind schedule, jeopardizing the client’s budget and timeline.
1. Punchlist: During the final stages of the build, the project manager and engineer will walk the project and collaborate to compile a list of final items that remain to be completed or may need to be corrected.
2. Document Closeout: The final stage of the project is to compile the paper trail including the blueprints, permits, and any other relevant documents to be left with the client. These will be essential for determining maintenance needs, future improvements, or in case any part of the project needs to be revisited.
Commercial Construction Companies
So now that you have a better understanding of what commercial construction is, the types of commercial construction, and the different phases of a commercial construction project, let’s take a look at some of the top commercial construction leaders in the world.
Revenue: $25.9 million
The company has completed more than 25,000 construction and civil engineering projects worldwide, including iconic projects such as the Hoover Dam and the Channel Tunnel. They’ve also worked on Tellurian’s $275 billion Driftwood LNG export terminal.
Bechtel has a staggering workforce of 55,000 people in nearly 50 countries, but is headquartered in San Francisco, CA.
Revenue: $19.2 billion
Fluor Corporation (NYSE: FLR) is a global engineering, procurement, construction (EPC) and maintenance company that designs, builds and maintains capital-efficient facilities for its clients on six continents.
With headquarters in Irving, Texas, Fluor ranks No. 181 on the FORTUNE 500® list and has more than 47,000 employees worldwide.
Revenue: $12 billion
Turner is a North America-based, international construction services company and is a leading builder in diverse market segments. With over 10,000 employees, they have had a hand in some of the U.S.’s most iconic landmarks including Madison Square Garden and Yankee Stadium. Outside of New York, they built the Rams Stadium in Los Angeles and the Martin Luther King Jr. National Memorial in Washington, D.C. They are responsible for building 20 of the 100 tallest buildings in the world!
Revenue: $20.2 billion
AECOM is known for being one of the largest design firms worldwide. With more than 45,000 employees, they’ve been named one of Fortune magazine’s World’s Most Admired Companies for the past six consecutive years. Headquartered in Los Angeles, CA, they’ve worked on the billion-dollar mixed-use development The Grand as Olympic Park in London.
Revenue: $7.5 billion
SKANSKA is owned by SKANSKA AB, a Swedish, publicly-traded firm. One of their biggest projects to date is the $60 billion redevelopment of LaGuardia Airport. They pride themselves on hiring veterans, having some of the highest safety standards for their crews, and supporting their staff through various mentor groups including one for women in construction.
Revenue: $8.7 billion
Kiewit began as a small family-owned firm operated by 2 brothers. Since 1884 they’ve grown into one of the largest construction powerhouses mining more than 750 million pounds of coal. They’ve been named One of the Top 50 Best Workplaces by the Great Place to Work® Institute Canada from 2011 to 2020 and have been recognized as No. 1 in Engineering News-Record (ENR) Rankings 11 times including this year, 2020.
Revenue: $13 billion
With more than 52,000 employees worldwide, Jacob’s Engineering prides itself on giving back to their employees and the communities in which they work as well as leading in sustainable and eco-friendly construction. They donated $2.7 million during their 2019 fiscal year and trained 1,400 employees to be positive mental health advocates. They’ve been part of major global projects like the 20 Fenchurch Street skyscraper in London and the $1.5 billion expansion project at Denver International Airport.
Revenue: $5.94 billion
DPR is an international, flat organization that is employee-owned. They specialize in building complex and challenging biopharmaceutical corporate offices and other healthcare facilities with an emphasis on sustainability and energy efficiency. While they are globally recognized, their biggest projects have been domestic here in U.S., like the 583,800 sq ft Mayo Clinic West Expansion in Phoenix, AZ.
Revenue: $4.4 billion
Balfour Beatty is an international construction company that has been operating for over 75 years. They’ve worked on dams, power stations, and railways. Some of their most notable projects include the Pentagon Memorial and the Dallas Horseshoe Project. They take immense pride in employee safety through their “Zero Harm” program.
Revenue: $6 billion
Gilbane is comprised of 3 sectors which include Gilbane Inc., an international builder and developer, Gilbane Companies which provides global integrated construction and facility management services, and Gilbane Development companies which specializes in real estate development.
Are you searching for a commercial construction company for your next project? Read our blog post on, “How to Pick the Right General Contractor for Your Large Capital Project”.