IllinoisCRE The guiding principles to enduring success in the real estate industry Matt Baker September 19, 2019 Share on Facebook Share on Twitter Share on LinkedIn Share via email Real estate can be a fickle and bruising industry. So what does it take to build a successful, long-term construction and project management business? This year marks the 20th anniversary of the formation of Principle Construction. The firm’s co-owner and president, Mark Augustyn, as well as co-owner and chief operating officer, Jim Brucato, sat down with us to talk about their roots, their practice and where the road ahead leads. How did you get your start in the industry and what led to the formation of Principle? Augustyn: After I got my master’s in architecture from the University of Illinois, I knew I didn’t want to be on the boards doing design drawings. I got into construction management out at O’Hare and once I was out in the field, which enjoyed immensely, I witnessed the downfalls of the low bid method of getting buildings or projects constructed. After a couple of years in that industry I found out about the design-build method of project delivery and I made the jump to become a project manager at McShane. Brucato: I started in concrete construction, working my way through college at Marquette where I was getting a civil engineering degree. I also did a cooperative education program there with the Illinois Department of Transportation, and much like Mark I realized that building roads and bridges is what I did not want to do; I wanted to take my civil engineering degree and apply it towards building vertical, structural construction. I graduated Marquette and immediately went to McShane and that’s where we met. We became friends and colleagues and we both realized that there was an underserved need for industrial projects. We felt that we could serve that niche and that our talents were very complementary and not redundant. We were honest with ourselves, grilled ourselves as if we were an outside board of directors looking in. After a year of after-hours planning, we formed Principle Construction in 1999. As you celebrate Principle’s second decade, to what do you attribute this success and longevity? Brucato: We have surrounded ourselves with the right people. That means the staff at our company, but also our consultants—banking, bonding, legal, insurance, all of those additional components that you need to run a successful company. We made very good decisions early on and we are still with all of them 20 years later. From day one and to this day, we were and are passionate about who we bring on here as staff members. They have to fit within our “work hard, play hard” environment that we have here. A lot of our success is attributed to those people that we brought on. Honestly, it’s a little cliché, but I don’t think you can be successful—in any industry but especially this one—unless you’re passionate about it. That’s been a big contributing factor for us. Augustyn: And it’s not just our employees but our customers. We are passionate about making sure we satisfy the goals and needs of our customers; we always try to meet or exceed their expectations. Our reputation is paramount and promising something and delivering it are so important. What are your top priorities when taking a job? Site safety, completing on time/under budget? Or something else? Augustyn: That’s interesting because so many opportunities that come across our desk have different requirements. Yes, we want to build buildings and we want to build them all. But what’s really important is that when an opportunity comes our way, we want to make sure that we can be successful, by which I mean we can complete the project with a satisfied customer—for whatever their goals are. And they have different goals. Some are cost driven, some are schedule driven, some need someone to help them solve a complex real estate riddle. When those projects come around, we look at whether or not we can do it and be successful. If we think we can, we go after it and we go after it hard. Brucato: I wish I could say that we had the ultimate ability to go through a checklist on each project to see if it meets our criteria. We don’t have that luxury even in today’s marketplace. There are certain things that we are very attracted to as more complicated projects, projects that need more expertise and guidance because that’s what we can provide, that’s what sets us apart from other providers. Not that the projects without complexity don’t excite us. Which projects are among the highlights of your career? Which jobs did you enjoy the most or learn something valuable from? Brucato: Taking that theme from the previous discussion on complexity, the project that stands out to me from 20 years and over 400 projects that we have done is the Kendall College project. that project was enormously complex, both in design and construction but also the structure of the deal. That project was a major focal point of the real estate industry at the time. Everybody out there knew of it. It was a massive undertaking, to bring a culinary college out of Evanston and onto Goose Island in an existing building, renovate that building within the client’s budget and within the client’s extreme time frame to be done by the semester opening. Not just in the 20 years here, but my 30+ years of total experience, that’s the highlight of my career. Augustyn: Stepping back and being more global about it, that was a project that required tremendous ingenuity. Not only did we have to satisfy the building’s structural and MEP concerns, there was logistic concerns and the deal structure. The projects that are the highlight of my career looking back are the ones that require ingenuity, maximizing the potential of the building systems or the structural components of a project and collaboration with the owners, their consultants and our design-build MEP partners to achieve a goal. Those are the ones that really stand out for me. Brucato: The build-to-suit projects are the more enjoyable for me—not that we don’t enjoy speculative building—but what’s always fun is to meet business owners that have manufacturing or a distribution business and learning how they make their product. I’m one that is always fascinated by how things are made and when they come to us looking for assistance on how to build their building, to help them be more efficient to bring their product to market, those are a lot of fun because we get to ask a lot of interesting questions about their business model, their manufacturing process and then we get to apply building systems and design concepts to really make their space as efficient and economical as possible to be more profitable in their industry. Where do you see Principle Construction or the industry itself in the next 20 years? Augustyn: I’m excited to see us applying more and more technology to our trade, our trade meaning design-build construction and project management. That is becoming very intriguing and it’s starting to show itself in a variety of forms, whether it’s artificial intelligence or virtual modeling or prefabrication off site of larger components of buildings. What are we going to look like 20 years from now? That’s a long lens to look through and I don’t have that answer, but I will tell you that it will look different than it does today for sure and it will be much more technology based. But we’ll still keep that client-focused touch.