Daily Journal Of Commerce | JON SILVER
The boom in apartment construction has created its share of winners, including contractors, design firms and early bird developers.
But there are less obvious winners, too, like the companies that supply all the wood.
Matheus Lumber; a distributor based in Woodinville, said it has seen
its revenues more than triple over the last three years, shooting from $85 million in 2011 to $280 million in 2019, thanks to the apartment boom.
The company said it supplies framing lumber and other wood products to the majority of new high-rise apartment projects throughout the Puget Sound area.
Matheus (pronounced "Mathews") has three branches in Washington, and others in Idaho, Texas, Arizona and Fairhope, Alabama, where it opened a branch a few weeks ago. The company's reach includes the West Coast, Texas and beyond.
Gary Powell, CEO of Matheus Lumber, estimated that 70 per-cent of the lumber the company sells is for multifamily projects. The lumber is used for more than framing. It's also used extensively for concrete form-work for retaining walls and underground parking structures.
"The forming business is major part of our sales," Powell said. "We sell a lot of 4-by-12s for the retaining walls, tons of it." Lumber can account for 3 to 5 percent of the total construction cost of a typical seven-story apartment building, according to the company.
Matheus works with a few dozen wood products suppliers locally. It purchases about 60 percent al its wood from the Northwest and Canada, and the rest from the Southeast.
Favored wood varieties in the Northwest are cedar, hemlock and Douglas fir
The price of wood can go up or down depending on supply and demand, but prices have remained fairly steady, Powell said.
That lack of price volatility has enabled the company to steer clear of risky futures markets, where a wrong bet on the direction of commodity prices can prove costly.
"We don't do that here," Powell said. "We tried it and weren't too successful."
The company, which has been around since 1932, also isn't betting that the apartment boom will last much longer.
Powell said he sees apartment construction tapering off over the next two years, and has been working to diversify. The company expects to increase its focus on schools and senior living projects, which should see more demand as baby boomers retire.
"You have to look down the road a bit; See what's going to happen, that's for sure," Powell said.
Bryan Ashbaugh, a sales and marketing manager at Mathews, said other areas where the company could diversify include single-family condominium and infrastructure projects.
Other sales areas for the company include marina construction, crane mat construction and even overseas shipments.
Matheus isn't a typical lumber distributor This year it was ranked the 19th largest lumber-yard in the country and first among dealers without manufacturing capabilities, according to ProSales magazine, a construction-supply publication.
That distinguishes the company from smaller distributors that focus on single-family construction, or ''mom-and-pop over-the-shoulder-type work" as Powell put it.
Matheus' customers are mainly general contractors and framing contractors.
"We have real high volume," Powell said. "Each purchase order we receive is quite significant."
Most orders range from 200,000 to several million dollars.
Powell said he could sell to retailers like Home Depot or Lowe's, but he'd have to revamp the company to do it and it would be less profitable.
The company has only around 95 employees., which allows it to stay nimble, Ashbaugh said. He estimated that Mathews leads the industry in sales revenue per employee.
Casey Voorhees, executive dime-tor of the Western Building Material Association, a regional trade association for building material dealers, said that members are seeing "nice, slow, steady growth" and expect to continue seeing growth for the next couple of years.
Most are focused on the single-family market, so they aren't benefiting from the multifamily boom, Voorhees said.
Supplying urban jobsites can be tricky because there is often little space for deliveries. An apartment project on a tight urban site may require three or four deliveries a week, arriving floor by floor.
Lumber arrives to the Woodinville distribution yard by truck, and the company uses a fleet of trucks of different sizes to deliver the shipments. Loads can be tied with straps so they can be handled by crane, or assembled instead for dump trucks or forklifts.
Contractors specify what time they want the deliveries, and it's up to Mathews to get them there, regardless of traffic.
"They want it there at 10 or 1 or 2," Powell said, "Traffic is a death wish"