Stephen Callahan Jr.
Vice president of business development, Callahan Construction Managers
Age: 42
Industry experience: 20 years
Callahan Construction Managers is raising its profile throughout New England and the tri-state area as it nears its 70-year anniversary. The Bridgewater firm was selected by Twining Properties as construction manager for Pratt Landing, a mixed-use project planned for the New Rochelle, New York waterfront including retail space and 600 multifamily units. In November, the firm topped off a 203-unit apartment complex in the Fort Trumbull neighborhood of New London, Connecticut. In Massachusetts, Callahan’s notable current projects include The Abby, a 610-unit apartment and retail development at the North Quincy MBTA station, and a 310,000-square-foot life science project at the former Quality Inn hotel property on Bedford Street in Lexington. Stephen R. Callahan Jr. is part of the third generation in management at the 250-employee firm founded by his grandparents Jack and Marie Callahan, overseeing strategic planning, sales and marketing and expanding its business with new and existing clients.
Q: What changes have you seen in the availability of subcontractors and the aggressiveness of their pricing in the past year? Which trades have the biggest labor shortages?
A: In terms of availability, the industry is still grappling with a major shortage of labor, especially across the skilled trades, and the major underlying problem is that there are not enough young people entering the trades as a career path. As it relates to the cost of labor and pricing, however, we are seeing subcontractors getting more competitive with their pricing as they are looking to fill up their backlog into and through 2024.
Q: Has there been additional leveling off of labor costs?
A: Yes, for the above-mentioned reason. I think we all realize that there are a lot of potential deals out there right now that will be delayed or deferred. Both life science and residential and having their own challenges right now. So much life science is coming online over the next six to 12 months, and you keep hearing that capital is not getting behind a speculative play. On the residential side, there are a lot of people trying to make deals work.
The volume of work we’re looking at hasn’t come down, but it’s a challenge. It’s educational to me, because I love when they share their pro formas with me. It’s a learning experience. It depends upon the geography and the rent, it depends upon the construction costs. On the labor side, it’s getting a lot more aggressive, but a lot of deals aren’t going to work.
Construction starts are slowing down and I think that trend will continue throughout most of 2023. We do think, however, that in the Greater Boston region especially, demand fundamentals are strong, and once interest rates start to trend back down, and acquisition costs adjust to the current market conditions, we’ll see fairly quick recovery.
Q: On the supply chain side, which materials have the biggest shortages or lead times?
A: Right now, we are seeing the biggest shortages and longest lead times on large switchgear, transformers and generators. The supply chain has caught up over the recent months on other commodities that were problematic six-plus months ago such as glass, certain types of drywall, polyiso and rockwool insulation.
Q: What changes are you seeing in project designs to comply with new or anticipated sustainability and decarbonization regulations? Are there new standards for disposal or recycling of demolition materials?
A: At present, we are seeing a move toward renewable materials and the reduction of energy consumption utilizing air infiltration and thermal control in the building envelope. We are also seeing an increase in the implementation of on-site renewable energy and the elimination of fossil fueled combustion mechanical systems.
Q: How is Callahan preparing its workforce for new building standards such as Passive House?
A: We’ve got 17 team members PHIUS [Passive House Institute US]-certified. It’s 40 hours of training, and more to follow. It’s becoming more of a requirement by code with opt-in stretch code, and we’re looking at a lot of Passive House deals. About 50 percent of our current projects are seeking a sustainability goal, such as LEED or PHIUS-certified. Right now, we are working on six projects seeking PHIUS Certification.
Callahan’s Five Favorite Books:
- “Lifespan” by David Sinclair
- “The Comfort Crisis” by Michael Easter
- “Atomic Habits” by James Clear
- “Can’t Hurt Me” by David Goggins
- “The Go-Giver” by Bob Burg and John David Mann
