Simulating Success

 OP INSTITUTIONAL 01By Todd Andrew
  

Orlando might be best known for its tourism industry, but look closer and you’ll find a more diverse economic landscape – one that has been quietly emerging over the past few years. 

Ever since the early 1970s – when the arrival of Disney began transforming the region from orange groves into a top vacation destination – construction projects have been tied primarily to hospitality, homebuilding and retail. Today, however, a budding defense contracting industry built on high-tech modeling, simulation and training (MS&T) is providing new opportunities for commercial and light industrial construction.

Nowhere is this more evident than 15 miles east of downtown at Central Florida Research Park, a 1,027-acre, 126-building campus adjacent to the University of Central Florida (the nation’s largest public university by enrollment). Here, some pretty exciting developments are shaping not only the future of America’s military, but the local construction industry as well.

About the Simulation Industry

At the Research Park, a number of companies, think tanks, academic institutions and government agencies are collaborating to build human-performance systems that train personnel in every branch of the Armed Forces. Together, they are known as Team Orlando.

One member of the team, the Naval Air Warfare Center (which happens to be the world’s smallest Navy base), operates in a nondescript office building where simulators help fighters prepare for missions aboard ships, aircraft and submarines. All the technology is created nearby, and it is used on bases the world over to train almost every soldier deployed overseas, as well as those from select coalition countries. According to Team Orlando, its members manage more than $16 billion of simulation projects, with $4 billion in annual funding from the federal government and heavy investment from private companies in fields such as medical, video gaming and virtual reality.

Expansion Requirements

All of this impacts the local construction industry because contractors and builders are capitalizing on opportunities to grow their portfolios and serve a high-demand market.

It’s not quite Cape Canaveral at the dawn of the Space Age, but the potential is there. Orlando is already considered the global leader in MS&T, and the technology is constantly becoming more important in civilian and military life. In recent years, the Mayo Clinic has added a state-of-the-art medical simulation center, UCF has expanded its tech research and simulation programs, the Veterans Health Administration’s new SimLEARN initiative is improving the quality of health care services for America’s veterans, and AVT Simulation just finished building the nation’s largest simulator program. On top of that, numerous companies such as Fidelity Technologies and Cole Engineering are expanding their presence and have required interior buildouts.

Of course, this is just a small slice of the work being done at the Research Park, where construction is underway on the third phase. The prospects are so bright that one equity firm, which already has five office buildings in or adjacent to the park, is going forward with plans to build a $5 million to $6 million project with no tenants lined up. In these conditions, there’s no reason to believe it won’t be fully occupied very soon.

Applications Elsewhere

While the MS&T situation is largely unique to Orlando, there are similar opportunities for construction companies to service other industries that partner with government agencies. Take manufacturing, for instance.  According to IBISWorld market research: “In the past five years, federal and local governments across the country have increasingly encouraged a manufacturing revival through targeted financial and structural incentives, as well as through government contracts. Developments that meet certain employment thresholds often qualify for tax exemptions or credits. These programs have begun to lure manufacturers in certain industries such as green technology back to the United States, generating demand for new industrial facilities. In addition, larger players in this industry benefit from government procurement policies favoring tenders by U.S. companies, especially on defense-related contracts.”

Moving to the infrastructure side of things, IBISWorld forecasts that demand for bridge and elevated highway construction will return as funding from the federal government slowly increases. Likewise, the outlook for road and highway construction, in general, calls for steady growth and greater private sector involvement, via public-private partnerships. Even water and sewer line construction is expected to grow, thanks to the long-awaited recovery of state and local government spending.

Across the spectrum, the story is the same. Regardless of which industry you operate in, opportunities abound – if you know where to look.

Todd Andrew is president and owner of Andrew General Contractors, a full-service Orlando-based firm he started in 1996 after nine years of management and operational experience in the construction industry. Andrew GC specializes in commercial ground-up construction, interior buildouts and renovations.

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