In an effort to try to relieve some of the stress of the recession in construction, the American Institute of Architects is becoming an online matchmaker, of sorts. On Nov. 7, the AIA launched a stalled-projects online database intended to hook up developers, architects and other industry leaders with investors and funders to restart mothballed U.S. building projects. The find-a-business-partner initiative is designed to help architects and their clients find a solution to the 'primary issue plaguing the design and construction industry'access to credit,' says the AIA.
“The Match.com approach can bring investors, agencies, planners, architects and developers together to find opportunities to move forward,” says Clark Manus, CEO of Heller Manus Architects, San Francisco, and the current AIA president. “The database will grow over time,” he adds.
Also on Nov. 7, the AIA released a report that concludes that recovery in the construction industry is not imminent. The prediction is that a construction upturn is not likely until the middle of next year. The major obstacle holding back job creation in the U. S. is the persistent lack of construction financing, despite record-low interest rates, says the nine-page Stalled Construction Projects and Financing.
The report, which is based on data compiled by McGraw-Hill Construction (ENR’s publisher) and Reed Construction Data, also found that 20% of stalled projects have financing problems.
“This report should lay to rest any doubt about what is a key source for holding back job creation in the U. S.,” says Kermit Baker, the AIA’s chief economist, in a press release. “It is the lack of financing especially to the design and construction sector, which accounts for $1 in $9 of U.S. Gross Domestic Product.”
Other findings are:
The share of projects stalled due to financing problems through August 2011 has almost doubled since 2008. Almost two-thirds of architects responding to a recent AIA survey reported at least one project that is stalled due to lack of financing, despite record-low interest rates.
Financing problems account for a higher share of stalled projects in the education and multifamily sector and are less of a factor holding back projects in the manufacturing, private health care and retail environments.
Whatever the reason, whether it is “overregulation, the threat of a double-dip recession or the reluctance to have too many loans on the books, lenders are just not lending to a major job-producing sector of the American economy,” Baker says. “Until more credit is extended, the potential of nonresidential construction to promote greater levels of economic growth will not be realized.”
The AIA’s match-up database project grew out of the Clinton Global Initiative America conference earlier this year in Chicago—the first CGI meeting to focus on economic issues that impact the U.S. economy. The Washington, D.C.-based AIA was a participating member of the CGIA.
Database registration is available at www.aia.org/practicing/AIAB091297. More than one project can be submitted. In addition to supplying information about projects, registrants can get information about investors and find and make contacts.
Investors can also register, providing information about their companies and the kinds of projects of interest to them. Investors can remain anonymous, though they must complete the form in order to peruse stalled projects listed in the database, says AIA.
AIA says it gives no assurance as to the accuracy or legitimacy of any of the information entered by investors, lenders or project owners. AIA also does not rank the projects listed as to viability or any other criteria. The group is merely acting as a forum for investors and architects, project owners and developers to meet and exchange information.