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Design Firms Seek New Opportunities in Softer Market

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Despite a strong assortment of megaprojects around the region, most top design firms continue to struggle in a soft market.

Image courtesy of HKS
A partnership of HKS and Wingler & Sharp led the design team on the $534-million Carl R. Darnall Army Medical Center in Kileen, Texas.
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Combined revenue for the top 75 design firms in Texas and Louisiana dipped 7.7% last year to $2.571 billion from $2.786 billion in 2010. Still, a few top firms have found success in troubled times.

Energized Market

The booming oil and gas sector, fueled largely by development in the Eagle Ford shale areas of south Texas, is providing a wide range of opportunities for designers.

Hatch Mott MacDonald built its presence in the region in recent years almost entirely on work in the oil and gas sector. In 2011, the firm saw $37.64 million in revenues, up from $10.91 million. Its work on the $1-billion, 185-mile Fayetteville Express Pipeline in Arkansas and Mississippi, which completed in late 2010, planted seeds for new opportunities with oil and gas clients, says Eric Kleinhenz, HMM senior vice president. The project finished on time and nearly $200 million under budget.

"There have been a lot of failures [by design firms] out there, so that kind of success grabbed people's attention," he says. "With shale plays like Eagle Ford, things are moving very fast in this market right now. Clients have more urgent needs, but we're being strategic about this. You can't be greedy and go after projects if you don't have the right resources or the quality staff."

The company recently made moves to increase its local talent pool, acquiring New Orleans-based Lambert Engineers on May 14. The firm also has offices in Dallas, Houston and Monroe, La.

Echo Effect

With billions of dollars in oil and gas work due to hit the region in the coming years, the boom is having an echo effect. Some architecture firms are seeing significant commercial opportunities created by the sector. In 2011, Gensler's Texas offices recorded the highest revenue in the firm's 40-year history in the region.

In 2007, before the recession took hold, Gensler reported $80 million in revenue. After taking a hit in 2009 to $67 million, the company rebounded in a big way, reaching $105 million in 2011. The firm now is at the top of ENR Texas & Louisiana's rankings in architecture, interior design, general building, commercial, hospitality and green categories.

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