Rising along with the multi-unit residential market
– Spotlight on Jim Grossmann and RISE Construction Management
Boasting a vibrant economy, good quality of life, rich history, and many other attributes, the Boston area is among the country’s most desirable places to live. That has led to a wave of new arrivals and with it, an enormous demand for housing. The Metropolitan Area Planning Council projects that more than 400,000 new housing units, mostly in Boston and surrounding urban areas, will be needed by the year 2040.
One of the companies seizing on the demand and helping to address the urgent need is RISE Construction Management. The general contractor is focused primarily on small and medium-sized, multi-unit, residential projects. Launched about three years ago by construction industry veterans, the firm is taking a unique approach to the market it has targeted.
“We bring the sophistication of a large company, but scaled down to a comparatively small firm,” says Jim Grossmann, co-founder and partner. “And we are committed to the building trades. We build 100% union and leverage that expertise in the middle market.”
Housing, it turns out, has long played a significant role in Grossmann’s life and career arc.
Growing up in East Boston, his family lived in the Orient Heights Projects, a Boston Housing Authority development. Starting at age 14, he worked for his cousin, a homebuilder, and learned the basics of carpentry and construction on the job. When he was 17, the BHA was renovating the Orient Heights Projects. Grossmann responded to a call for Section 3 workers, which gives low-income residents an opportunity to participate in construction projects in which they live. As a condition of the job, he joined the carpenters union.
Although still a teenager, he was part of the crew that renovated all 1,200 units of the East Boston development. After high school, he continued to work with the carpenters while pursuing a degree in accounting at night. The numbers just didn’t add up, however.
“I did an internship at Massport auditing payrolls and thought, ‘I cannot do this for the rest of my career,’ ” Grossmann says. “By my fourth year, I hated accounting.”
With his degree in hand, he returned to construction and got a job as assistant superintendent at Suffolk Construction, one of the region’s largest general contractors. Instead of working with spreadsheets and payrolls, Grossmann was working with people, which was much more to his liking. He spent most of his time in the field at construction sites for projects such as Manulife’s headquarters in Boston’s Seaport, the Mandarin Oriental Boston, and One Dalton, the high rise building that houses the Four Seasons hotel and luxury condos.
“Personal interactions are what fuels my passion,” Grossmann says, explaining why he enjoys the construction industry. He admires the individual craftsmanship involved, but he notes the work requires people to have good interpersonal skills and to work together collaboratively. “The plumbers have to work with the electricians and other trades. That’s what I love about this business.”
Grossmann spent the first 16 years of his tenure with Suffolk shepherding projects in and around Boston. But the locally based company, which performs some $4.5 billion of work per year, has satellite offices around the country and builds about 50% of its projects outside the region. For his final five years with the GC, Grossmann served as its national COO. In that position, he oversaw all the company’s projects, including the Encore Casino in Everett. But he also spent a lot of time on the road. Grossmann’s travels took him to Florida, for example, where Suffolk handled the construction of two Hard Rock Casino Hotels. (Interestingly, the hotel in Fort Lauderdale is shaped like a guitar.)
After a half decade away from his home, Grossmann realized he missed Boston and its people. He also decided it was time to try something new. With his partner, Brian Anderson, he founded RISE.
While he was away, Grossmann gained a new perspective and appreciation for the building trades in Boston.
“I mean this sincerely. I have traveled and seen workforces across the country. I truly believe the best trained and safest workforce is right here in Boston,” he says. “They are so good at what they do, it’s not even close.” What is it that distinguishes the workers in this region? “The unions,” Grossmann affirms. “We respect our workers here.”
The training is exemplary, he notes. But it’s more than that. “You need leadership that cares about their workers. There is a culture within the building trades here where everyone has everyone else’s back. That doesn’t happen without great leadership,” adds Grossmann.
That’s why a union workforce is among the tenets that RISE embraces. “It allows us to differentiate ourselves in the marketplace,” says Grossmann.
RISE has carved a unique niche in other ways. In recent years, market dynamics created many projects that soared past the $100 million threshold in and around Boston, and GCs raced to scoop them up. Grossmann reasoned that left a gap in the middle market–jobs that range from $20 to $75 million–which is where RISE has focused its attention.
Specifically, the general contractor mostly pursues relatively small, mid-rise, wood podium residential projects such as the 341-unit Allston Square, the 55-unit Nevins Hill in Brighton, and the 149-unit 35 Braintree Street in Allston. Historically, jobs such as these have been the province of open-market shops that use a low-skilled workforce. RISE, on the other hand, sees union subcontractors such as Local 12 as a partner. A few years ago, the local established a residential division to handle the kind of projects that RISE targets.
Why is the contractor committed to a union workforce? Partly, Grossmann says, it traces back to his personal experience as a member of the carpenters union. He appreciated the way he was treated, including earning a living wage and getting proper health care and benefits. But mostly, Grossmann sees it as sound business practice.
“We get a highly experienced and, frankly, better workforce,” he says. “We are able to provide an institutional-grade, high-quality product built to high standards in this market. It speaks to our ability to deliver.”
The young company must be doing something right. It has experienced phenomenal growth, rising from $14 million of revenue in its first year to $50 million in its second. Grossmann projects it will generate $150 million this year and looks to be $225 million in 2023.
As for the future, RISE is exploring the higher education market with projects such as dormitory renovations at Harvard University and some small projects at Northeastern University. It is the same middle market approach, but with institutional buyers, says Grossmann. Likewise, it is dabbling in healthcare by replacing an MRI unit at New England Baptist. But the company’s bread and butter remains residential projects.
The economy may appear a bit wobbly now, but Grossmann believes Boston’s residential market, fueled by demand, is robust and fairly recession proof. “We have about 2,000 units in the pipeline now, and we are actively pursuing more,” he says. “That’s the foundation for our company.”