Merit General Contractors Inc.

Merit General Contractors Inc. has built a diverse portfolio of projects over the past two decades that has enabled it to remain stable during drastic changes in the market. “Business opportunities depend on the market, but overall, we saw a slight uptick last year and it appears that the trend will continue for the next three to five years,” CEO Don Crabtree says. 

Crabtree received his degree in construction science from Kansas State University and founded the Olathe, Kan.- based company in 1991 after acquiring years of experience in estimating, marketing and customer development with a larger local general contractor. Merit’s services include design/build and construction management. 

Since its inception, the company has completed more than 300 projects totaling more than $750 million in revenue. Of those, 80 percent were design/build and construction management projects and the remaining 20 percent were obtained through a selective bid list. Merit performs its work for residential, industrial and commercial developers.  

“We are one of the larger builders of warehouse, distribution and logistics centers in the area,” Crabtree says. “That’s our bread and butter.” 

Merit performs 80 percent of its work in the Kansas City area, but it also holds contracts with national retailers to build new locations, which takes the company across the United States and Canada.

New Markets

When the economic downturn hit in 2008, Merit faced the challenge of refocusing its operation because some of its customer base, real estate developers, struggled to secure loans that didn’t carry enormous burdens and restrictions. “Being that our business model [is] comprised of developers who relied on loans to build warehouses, and banks weren’t lending without adsorbent requirements, that market pretty much shut down from 2008 until sometime in 2011,” Crabtree explains. “That forced us to get out of our comfort zone and branch out into other markets.”

Merit discovered there was a growing need for senior housing, assisted living facilities and smaller urgent care centers in the Kansas City area and elected to focus and rebrand in those markets while it waited for warehousing, industrial and logistic center developments to rebound. “We carved ourselves into those markets and that got us through until the economic climate improved,” Crabtree says. “We still have that division and plan on pursuing that niche market. We believe there will be a continued need for this product for the next 10 to 15 years.” 

In Crabtree’s opinion, business opportunities are still not as prevalent as they once were, but he has noticed an increase in warehouse, distribution and logistics center developments. “The basic shipping of goods will continue to increase, which will require more warehouse space,” he adds. The company is also seeing increased interest in medical center developments, bioscience research facilities and data centers. “We will continue to focus on these markets while expanding our warehouse and logistics center division,” Crabtree notes. 

Major challenges for Merit include the number of new competitors each year, inflation of material prices and maintaining relationships with strong subcontractors. 

Quality Results

Merit was awarded the I-35 Logistics Park project in 2012 to design/build the first warehouse and distribution center on the property. The 823,000-square-foot facility is LEED certifiable and was completed August 2013. During construction, Merit incorporated green practices, such as reducing its waste, purchasing materials from nearby vendors and building landscapes that limit irrigation requirements, Crabtree says. 

1A Auto, a Massachusetts-based auto parts company was the first tenant in the new building and secured 190,000 square feet of space. The I-35 Logistics Park has room to accommodate additional 1.1-million-square-foot and 966,000-square-foot buildings. Merit anticipates performing the design/build work for those buildings, as well.

Working on the I-35 Logistics Park project, Crabtree says the No. 1 thing he acknowledged was that having really good subcontractors is the key to success. Because of the overall size of the site and building, Merit had to be selective with its qualification of subcontractors selected to work on the project. Even working under a tight schedule and budget, the company completed the project two months ahead of schedule and saved more than $400,000 for its client. 

In April 2012, Merit worked as the construction manager on the new Solera Salon in Overland Park, Kan. The project consisted of building a two-story, 17,000-square-foot salon, as well as renovating the adjacent 17,000-square-foot retail building. 

Merit also recently completed a $10 million renovation to the Indian Hills Country Club in Kansas City. “This was a very complicated sequence that took place in six phases,” Crabtree says. “Basically, we had 600 clients because that is the number of members the club has. The facility remained open during construction, so we had to keep all the clients happy and be on top of our game.” The project included doubling the size of the clubhouse, remodeling the swimming pool and pool house, and building a new two-story pro shop with a fitness center on the second floor and extensive renovation of the outdoor living areas and landscape.

Growing Further

Merit plans to continue growing by increasing the number of developments it builds per year and expanding its service area. The location of the new branch is not yet disclosed, but the company says it could open as early as this summer and will focus on a specialized market, Crabtree says. 

“Our staff has relationships with bonding companies [in the new area] and the plan is to assist them with RELETs and disaster recovery,” he explains. “I am excited about the potential of this new division.”

To date, the company performs about $40 million in projects per year and in the next five years, Crabtree expects that number to grow to $70 to $80 million. To achieve this goal, Merit will begin to concentrate more on its national accounts, new niche markets and the expansion of its current markets. “I believe the sustainability of any organization is selective diversification,” he explains. “Once you get in and if you catch the right growing markets, those accounts can last for several years.” 

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