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December 2006
Planning to Succeed
By Lisa Hoffmann

When people casually ask Sherwood Webb, founder and partner of Webb and Partners, what he does for a living, he’s never quite sure how to answer. “Project management” doesn’t really tell the whole story yet “overseeing everything from feasibility studies and construction to documentation, furniture procurement and IT setups for commercial real estate projects, often saving the owner hundreds of thousands of dollars” seems like a bit too much. And even that doesn’t say it all.

“Project manager” means different things to different people but what Webb and Partners does is truly unique: they sit in the owner’s seat, overseeing anything and everything required to take a commercial real estate development project from conception to reality and beyond. As an agent for the owner, they have only the owner’s best interest in mind.

“If you build widgets, your whole focus in life is on how many do I need to make, where can I sell them and how do I market them?” Webb says. “But if you’re doing really well you have to grow. Yet your expertise is widgets. You probably don’t have the experience and knowledge, or the staff, to effectively build another plant. We do.”

Webb and Partners doesn’t just coordinate and oversee the architecture and construction, they’ll hire an IT company to wire in and set up the telephone and computer systems, negotiate for and purchase furniture, artwork and live plants, and plan and oversee the move-in process.

“A lot of people say they don’t need a project manager, that they’ll just hire an architect and a contractor and that’ll be fine,” Webb explains. “But if you ask your contractor, ‘How do we lay out the computers?’ he’ll probably say he doesn’t know. Many architects don’t do interior design within their building design contract, which a lot of owners don’t realize. There are many pitfalls owners don’t see ahead of time. That results in a lot of wasted time, money and energy. We can save them from all that.”

Mismanagement causes the vast majority of cost overruns and time extensions Webb sees. “So many of these projects are managed by committee,” Webb says. “No one’s making any decisions. Decision-making has to happen regularly in order for the project to move ahead.”

Accountability is key. One of the first things Webb’s project managers do for each project is assign something to everyone on the team to do. Making someone accountable for each facet of the project keeps things moving along. Webb and Partners works projects backwards, considering furniture types, sizes and configuration into account during the design phase for example, in order to come out at the end with the product the owner envisioned.

 

Experience and Expertise

The number one benefit Webb and Partners’ clients receive is profiting from the project managers’ expertise. The firm has more than 100 combined years of national experience in construction management. Being a national company helps it stay abreast of the trends. With Webb and Partners’ guidance an owner is less likely to sign on for an overblown contract.

“We see the trends. We know who the stable contractors are, who the architects are who specialize in designing your type of project,” Webb says. “The first way we save clients money is by bringing the right team to the table. Sometimes the best architect for a Charlotte project is in New York, or vice versa. Most owners won’t know that and if they get the right architect for the job its just luck. Banking on luck isn’t a great way to start off a multi-million-dollar project.”

Webb and Partners operates on a flat-fee basis, at between three-quarters of a percent to four percent of project cost, based on the needed services. Once the fee is agreed on, that’s it. Webb and Partners sees the project through to completion without any surprises. “This works for the owner because it eliminates conflict of interest,” Webb says. “We have no incentive for the project to go higher or lower.”

Webb and Partners’ expertise extends to material cost savings too. They know the markets and they will do the cost-comparison legwork for their clients. It’s not a good day when the crew realizes that the lights that were ordered won’t mount on the steel structure that was installed. With Webb and Partners at the helm, those bad days go away.

“I see a big part of my role as carrying out due diligence,” says Gene Harris, a senior project manager for Webb and Partners. “We make sure we cover all the bases and capture everything that’s going into a project.” Webb and Partners works to prevent what can amount to a disaster.  

“We’ve already got the knowledge and experience to foresee problems,” Webb says. “We’re not learning on the client’s dime. They make back more than what they pay for in financial savings and they save themselves a boatload of stress.”

 

From High Fires to High Rises

Webb grew up in Asheville and earned a civil engineering degree from North Carolina State University. He was just out of college in the late ’70s when he was offered the opportunity to go to Saudi Arabia for a construction project. The project had inherent risks but  the financial prospect was impossible to resist. In Saudi Arabia natural gas seeps up to the surface of the ground, causing a deadly risk. The Arabs would maintain huge fires, with 300-foot high flames, to keep the gas under control. Then a company discovered a way to capture the natural gas fumes and convert them back to liquid. They would then sell the liquid gas. Webb built a one-square-mile natural gas gathering plant.

“It was an amazing learning experience,” Webb says. “I gained a lot of management experience at a young age that I could not have gotten here in America. It was tough, very tough. And as people left we’d have to fill in the holes. I got more and more responsibilities that way.”

Webb later married and moved to New York where he worked in high-rise construction for ten years. There he discovered that the construction process was evolving in depth and complexity, revealing the need for owner’s agents. While working on the Lincoln Center for the Performing Arts he oversaw other general contractors building smaller surrounding structures and the idea of starting a project management company began to take shape. But New York didn’t fit his vision.

“I was traveling and working so much that I wasn’t seeing my wife and children very much, so we started looking for a smaller city to move to,” Webb explains. “But I also didn’t want a too-small city. And I needed a convenient airport. With the great quality of life here, Charlotte fit the bill.”

Webb’s first project was overseeing the construction of the Nations Bank Tower. By then he was surer than ever that there was a niche for a program and project management firm. After he opened his doors in 1992 one of his first projects was renovating a bathroom facility at Piper Glen. “Yes we started small,” Webb says with a chuckle. “And we’ve moved on to much larger projects. But we still take on small projects and we enjoy them.”

Although the company rapidly grew, cash flow was a problem. “The absolute biggest challenge for a new business is getting someone to believe in you enough to back you,” Webb says. “I met with more than 30 banks before I found one that was willing to give me a $50,000 loan and I had to put up $50,000 cash collateral.”

Finding and keeping employees is another challenge Webb continually faces: “My project managers have to be entrepreneurial so they can think like our clients, business owners. They have to have good business acumen and they must know how to manage people.”

“In our job we’re interacting with a lot of sharp business leaders and they have to have confidence in you and your abilities,” Harris adds. “Past experience plays a big role in getting that confidence.”

“Then once they get good enough I face another challenge when my client wants to hire them permanently,” Webb says.

Webb and Partners’ biggest competitors are actually the clients themselves. Many big companies have a large in-house staff to handle real estate development. What they don’t realize is that Webb and Partners can do the job better, less expensively and more efficiently. Webb’s challenge is to get the word out about what his firm does and how it benefits clients and improves the bottom line. “We haven’t done a great job of marketing ourselves and that’s something I’d like to concentrate more on in the future,” Webb says. “It just goes right back to educating potential clients. And that takes time.” 

 

Now and Later

The firm’s size fluctuates dependant upon the number and scope of the projects it’s overseeing, but it usually hovers around 10 to 15 people. The number of projects it oversees can go as high as 1,000 per year. That’s when the firm’s employee base spikes to 40 or so.

“When we have a client who is on a rapid growth program, we have to readjust our employee base,” Webb says. “But we have such great contacts that we can reach out and bring them in when we need them.”

Some of Webb and Partners’ biggest projects include a $70 million project for Dominion, an energy company in Virginia. The firm spent seven and a half years overseeing all of First Union Bank’s real estate development, managing up to $300 million per year. It has also built sports stadiums around the country and even Manhattan high rises, although Webb hasn’t chased that type of work down lately.

“A project of that scope just absolutely consumes you and I want to maintain that work-life balance I sought out when I moved out of New York,” he explains.

First Colony Health Care is one of Webb and Partners’ biggest current clients. The firm is overseeing the construction of long-term acute care hospitals and medical office buildings across the country.

Webb and Partners typically has 10 to 12 clients per year but the size of the projects varies greatly. Consider the difference between building a $3 million restaurant and a $300 million hospital. Webb and Partners can manage both projects, and manage them well. The firm manages between $200 to $600 million per year, resulting in revenue ranging from $2 to $13 million. All this fluctuation keeps Webb on his toes. 

He plans to retire in about 15 years, after which he predicts his project managers and partners will take over the company. Webb recently brought a partner, Lee Lyles, on board after captaining solo for three years. Lee, a graduate of the University of Texas with a degree in architecture, has over 30 years in the real estate development business. He has extensive experience in office, hospitality, retail, mixed-use, medical and senior housing projects. Webb plans to bring another partner into the fold in January.

Webb chooses his partners very carefully and recently turned down a few eager candidates. Before he’ll consider anyone, he has to be convinced that he or she brings the right things to the firm, is willing to be accountable and take the necessary risks. It’s a tall order, but so are the projects Webb and Partners oversees.

“We’re not just trying to build beautiful buildings,” Webb asserts. “The buildings have to serve a purpose. If they’re beautiful too that’s great but I’ve got to make sure our clients can build the widgets, seat the diners, run a call center or whatever the client needs. That’s our focus, always. What the client needs.”  

Lisa Hoffmann is a Charlotte-based freelance writer.
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