CIP Finishes’ experience in the specialized multi-family market is carrying us through unprecedented times.
Last summer, we reached out to our customers to share information on how we were managing the supply-chain issues impacting every sector of the economy during the initial post-pandemic recovery.
One year later, long lead times on the materials we install in multi-family construction projects throughout the Greater Washington, D.C., region are still a problem—but they’ve become less of an immediate issue thanks to the larger problem of unprecedented inflation and price volatility among our material suppliers.
Dependable costs are crucial to successful multifamily investments. But as anyone in construction can tell you, suppliers have been issuing a relentless drumbeat of price increase announcements for more than two years now. On average, we have seen close to a 30 percent increase in the cost of the materials we most regularly work with over the past two years.
We see this particularly with specific materials such as aluminum—which has driven the price of mailboxes up 30 percent—and glass—which has gone up so much that we are buying mirrors in bulk in stock sizes cutting them in-house to keep prices down for our customers.
While we do include more room for price escalation in our contracts today than we did two years ago, our focus is always on trying to help our customers get the best prices possible. Thankfully, the strong position we have built in more than three decades in business enables us to take special measures to try to protect our customers from some of this price volatility.
In order to lock in reliable pricing, we are purchasing materials early and keeping them in our own secure storage for months before they are needed on job sites. We have bought materials for many recent jobs over a year in advance. This was once something we did occasionally—now it is becoming part of just about every job we contract. Our deep knowledge of the market allows us to foresee opportunities to purchase large amounts of in-demand materials—such as glass shower doors—as a hedge against inflation.
We are ordering so far ahead of time on most items that the supply-chain delays that are still happening in the construction materials market have in many cases been rendered moot. Managing this kind of storage and staging is not simple, and we rely every day on the experience and expertise of our employees—who have worked tirelessly to keep customers on-time and on-budget as much as possible over the past two years.
These challenging circumstances are happening amidst a booming multifamily market. At $15.6 million and growing, our pipeline is as high as it has ever been. We are winning jobs with start dates as far out as 2024, as developers try to stay ahead of continuing construction inflation.
In this kind of a market, it’s important to rely on experienced contractors with strong track records. Our 36 years in business have taught us the importance of adaptability and taking measures to protect our customers in volatile markets like these. It would be very easy for a less-experienced furnisher of interior finishes to win projects with low bids, but be driven into bankruptcy when the time came to order materials, because they hadn’t done the necessary planning to lock in prices that would keep them from losing money on the project.
We believe another reason for our success amid these challenging economic conditions is our focus on the multi-family market. While many other finishers service both the single-family homebuilding and multi-family markets, we have specialized from day one. Through our work with first-rate contractors such as Balfour Beatty, CBG Building Company, Bozzuto and many others we have learned just how important precise estimating, ordering, staging and installation are in the time-sensitive process of building multi-family communities. We have weathered recessions and downturns in the past, and the lessons we’ve learned from those hard times help us every day.
As we wrote earlier this year, the need for multifamily housing is greater than ever, and we are proud to be among the talented general contractors and subcontractors working to build these homes.
But make no mistake—we haven’t seen economic conditions quite like these in more than three decades in business. It’s more important now than ever to rely on firms with experience and the wisdom to adapt and problem-solve on the spot. We are proud to be able to offer that level of experience to our valued customers.
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