GUAM – Contractors who aim to win work on the Guam military buildup in coming years may benefit by setting up a presence on the island soon, before competitors scour the island for high-profile office space, executive housing, warehouses and other properties, according to The Real Estate Professionals.
“When the whole thing hits and people are scurrying all over the place, it’s going to be much harder,” Chris Murphy, Owner and Principal Broker of The Real Estate Professionals brokerage on Guam, told GuamBuildupNews.com. “If you’re a contractor and you are committed to being a part of the buildup then obviously it makes sense to come in here now.”
Early arrivals stand to benefit from a wider range of office space choices, more convenient and better housing for executive teams and a better bargaining position before competition grows as the buildup heats up, Mr. Murphy said.
“The main advantage of moving to Guam early is that it provides the contractor with the opportunity to select the best properties available in the market in terms of location, price, and amenities,” he said. “It also allows them to settle into the community and get to know the professionals they will be dealing with during their stay on Guam, both private and government.”
Mr. Murphy said most contractors will be seeking a physical office for management and administration, warehouse space, barracks for workers and possibly housing for their management and administrative staff.
For main offices, “most will be looking in the central area so they can readily access both the Air Force and Navy bases unless they plan to deal specifically or exclusively with either base,” Mr. Murphy said. Central Guam also provides easy access to the new Marine base that is being built in the Finegayan area. “All this will be good for real estate activity for the duration of the buildup. Then the challenge for landlords will be how to continue renting or selling their properties when the temporary increase in population subsides.”
Several contractors have already established or beefed up a presence on Guam in anticipation of contracts related to the transfer no earlier than 2016 of at least 8,600 U.S. Marines and their families and support staff from Okinawa. But many more are waiting.
“There continues to be a steady flow of interested parties coming to Guam,” Mr. Murphy said. “I see a lot of discussion regarding projects but still see hesitation to commit to setting up physical shop yet.”
Colorado-based Hensel Phelps Construction Co., which holds a spot as a prime contractor on the $4 billion Guam design-build multiple award construction contract, opened a new office on Guam on May 6 and is sending staff from the continental United States to support a presence the size of a district office. Mortenson Construction, another Guam MACC prime contractor, leased office space this year at the Orleans Plaza in Tamuning to house the operations for both their joint ventures.
ManpowerGroup, one of the world’s largest workforce solutions companies, Guam newcomer Oyo Corporation, Pacific, and other companies indirectly related to the military buildup or who aren’t prime contractors, have also opened offices on Guam in anticipation of business supporting the major contractors.
The timing of a move to Guam can also be a gamble though, Mr. Murphy said, particularly as the buildup has been delayed in the past.
“Some players have positioned themselves early on Guam and now with delays they don’t have work to support it,” he said. “Holding costs could include office space, warehouse space, and residential housing for management, etc. This will make it very difficult for the smaller contractor who doesn’t have the capital base to support early mobilization without offsetting income.”
Mr. Murphy recently moved offices as well, to a new location on Route 8, partly because of the long-term prospects of the property.
“We’re staying here forever and we feel Route 16 and Route 8 are the next Marine Drive,” he said. “Over time the prices on that corridor are going to increase. Getting into a property here now made sense.”
GuamBuildupNews.com monitors the marketplace for real estate insights and opportunities related to the military buildup. In the coming weeks, the site will debut a new Guam Real Estate section dedicated to news and information that will help property owners, buyers, renters, investors, developers and realtors make better, more timelier decisions.
Image used in the article courtesy m_bartosch / FreeDigitalPhotos.net