Consigli CEO Anthony Consigli Talks 35 Years in Construction

A year ago this month, Consigli Construction purchased the New York-area portfolio of Lendlease — then valued at $1.8 billion — as the Australia-based construction and development giant exited the U.S.

The deal was the biggest post-pandemic move thus far by the 120-year-old Consigli, based in Milford, Mass., a rustic Boston exurb. It expanded the company’s role in the nation’s largest commercial real estate market, where it had already led construction on residential projects for Extell, Brookfield and other developers, as well as commercial, educational and health care work for the likes of Columbia University and the city itself — never mind the ongoing renovation of Harlem’s famed Apollo Theater. 

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Consigli’s New York footprint showcases the diversity of the company’s workload. Simply put, it builds a lot of different stuff in a lot of different places, including the Southeast and the U.S. Virgin Islands. And elsewhere in the Northeast, too, including working with Tishman Speyer on the expansion of Harvard’s campus into dozens of acres of Boston. 

Anthony Consigli, a great-grandson of the founder and the company’s chief executive officer since 1997, leads the firm with brother Matthew Consigli, its president. In late August, Commercial Observer packed a snack and headed to Milford to sit down with Anthony Consigli to talk about the one-year anniversary of  the Lendlease deal, the construction industry’s biggest challenges, the role of artificial intelligence in the field, and a lot more. 

This interview has been edited for length and clarity.   

Commercial Observer: We’re in Milford, Mass., right now. Can you explain how we got here? 

Anthony Consigli: We’re meeting here because my great-grandfather Peter Consigli came here in 1905, and opened up a small stone masonry business. Over the course of the decades that followed, it grew into a small construction company. He had six sons, all of them had a different masonry trade; and that’s how he created his general construction firm.

As the company grew, we looked at moving our headquarters to different cities. We felt like we needed to stay and honor our roots here.

How many offices do you have now?

There are 15 offices and 2,400 employees.

Is there one in the Caribbean? 

There is.

What does that one do? Is it mostly hospitality? 

No. Interestingly enough, it’s a fairly diversified set of projects. I’m going to say they’ve completed 50 or so projects in the last 10 years. It’s been a mix of schools, hospitals — we’re doing a cancer hospital there. We’re actually getting ready to do a substantial amount of work on both airports in St. Croix and St. Thomas. We’re doing some low-income housing.

We’ve done hospitality work there. But there has not been as much of that work as you would think.

Is that a pandemic thing?

Since the pandemic, occupancy there has been great. I think insurance costs and just construction costs in general have made the math tough to work for people. So most of the work that we have been doing has been infrastructure and publicly funded work.

How do you find insurance costs now? I know it’s a broad topic, but you’ve been at this a long time. How does today’s market for insurance on construction sites compare? 

There’s a lot of different coverages we have to buy and things we have to insure against. But, generally, the market’s tightened up quite a bit, and it’s generally more expensive across the board.

How do you deal with that?

We pay it. [laughs]

There are no attempts to create a market, or insure yourself?

It’s a great question. Insurance has gotten so complex. We have a risk management group here at Consigli now, and they’re out all the time looking for different ways of covering our risk while at the same time trying to save our clients money.

As we get bigger and get into situations, it’s a lot more sophisticated of an approach.

It’s been a year since Consigli closed on its acquisition of Lendlease’s New York-area business. What was the thinking behind that acquisition?

We have been in New York City for about 10 years and in New York state for about 15. We really like New York for a number of reasons. We were close with Lendlease because a lot of our employees have worked there in senior-level positions, and we were actually working for Lendlease because they’re also a developer. We knew their culture aligned with ours, and we really admired their people. 

So the opportunity came up with Lendlease whereby they were going to exit the United States in construction, and we really jumped at the opportunity because we felt it would make us stronger. 

Did they approach you?

I would say it was a joint discussion.

Is it a big deal for Consigli to have a presence in New York City or the New York metro? 

I would say Lendlease allowed us to pursue and build the projects that really got us out of bed in the morning. 

Lendlease was  big in health care, including life sciences, in New York. Was that a consideration?

Absolutely. Consigli loves health care work. We do it in most of our major markets, and so to have the No. 1 builder of health care in New York City was a great thing for us. And to do it with the institutions that are in New York City — you’re talking about the best in the world: New York Presbyterian and Memorial Sloan Kettering and Mount Sinai and Northwell. That was something we wanted to be associated with. 

The life sciences group was primarily in New Jersey, because there’s a strong life sciences market there. 

Like down toward Philadelphia? 

I would say that Greater Philadelphia all the way up through New Brunswick. Again, Consigli did life sciences work in our other markets. This just made us stronger. 

Lendlease also did some big and complicated high-end residential work for the top developers in the city like Extell. That was very attractive to us.

Can you talk about that some more? What are some of the challenges in New York building?

Building construction is hard in New York. You do it in a city of 8 million people, it gets hard. And you’re working with some of the best architects in the world; complicated, sophisticated designs; really sophisticated developers. So the challenges are innumerable. 

But there’s a phrase: There are two types of people in the world — those who say, “Hey, this is really hard and difficult, I’m not going to do it” and those who say, “Hey, this is really hard and difficult, I’m going to do this.” I think that’s sort of the approach we took. Lendlease was building very high-end residential units, and we wanted to be a part of that. 

How often are you down in New York?

Every week or every other week. It’s not that they need me a lot of the time. [laughs] The thing with the Lendlease acquisition is that they were part of a big public company based in Australia. We’re sort of a local, very hands-on owner. So it’s very different. 

They had a great builder mentality and there were some great things to work with there. But from an ownership standpoint we want to change the approach to something that’s flexible, nimble, not bureaucratic, responsive. In order for that to happen, I want to be there to help out as much as possible.

We have really strong leadership there like Laura Bush and Steve Sommer. Doug Renna is executive vice president, and who I think is the best in the business in New York for what he does. They don’t need me. I just want to be there to make sure they have the resources in order to move fast on things. 

That, and for the Greek food I can’t get anywhere else. 

There is a historic housing shortage in the country. Consigli does a lot of housing construction. What makes it tough to build housing from a contractor perspective? If you could set policy, what policy would you want in place? 

Everyone wants to point the finger at something else for the reason why it’s not getting built. In our estimation, it is a host of things, and the different entities need to work together to relieve the pressure on all of them, or most of them, to get the math to work.

Entitlement costs are way too high, interest rates are too high, construction costs are too high. Those all go into the mix, so to speak. Entitlement costs are a big deal. A big percentage of the cost of development is in all the upfront costs: permitting and legal and getting through all of that.

So this makes it difficult in major markets like Boston and New York.

Yes. New York has the benefit of having a very prescribed process. They’re very professional in how they approach it, relatively speaking. Boston, it’s much more difficult. But New York has a very prescribed process.

I do think there are a number of factors for preventing good high- to low-income or moderate-rate, working-class housing from getting built. It starts with entitlement, but then it gets into the financing costs. Hopefully, we get some relief with the interest rates. But the interest rates are not the only story — it’s part of the story. Construction is difficult because you have 40 percent inflation over a matter of two years. Now you’ve got tariff costs on top of that. It’s making things harder, not better. 

Construction material costs go up. How do you deal with that? How far in advance do you have to plan?

It’s hard to plan because we don’t have much certainty from federal policy. So it’s a bit reactive, and we don’t like being reactive. We like having a plan for everything, but this one has been tough to plan for. 

Fortunately, the impact from tariffs has been somewhat muted. Our studies have shown it’s probably been a 1 to 2 percent impact on construction costs whereas we thought it was going to be much higher. That being said, 1 to 2 percent is still a cost, and so we’ve invested a lot in our procurement group in order to try to locate products that can get away from the tariffs or that might be cheaper.

How’s that going?

It’s going better than I expected. I think that subcontractors and suppliers everywhere are working with us to mitigate the tariff costs. I think designers are being much more open-minded in terms of product selection because they want to mitigate the tariff costs. 

There are some things we’re just not going to get away from because it’s just not made in the United States. Aluminum is a great example. We just don’t make aluminum here, but aluminum is a big product in the construction of a building.

There are challenges to using mass timber in the U.S. Is that something that’s going to catch on large-scale?

We’ve seen it catch on. We consider ourselves the leader in mass timber here in the Northeast. It’s still cost-prohibitive to be used in a lot of different markets — let’s say residential development — and until the supply chain is robust enough to bring those costs down it’s not going to get to the scale that it needs to to be cost effective. 

What would bring the cost down?

Having more domestic suppliers. A lot of it now comes from Canada or Europe. And, obviously, you can’t have more suppliers until you have more demand. 

There’s this huge demand for housing that everyone’s trying to figure out. Mass timber could in the future be a part of that. Right now, it’s not. 

There’s also a skilled labor shortage in the U.S. How do you find labor, especially of the skilled sort? 

I would say there are two problems here. One is the shortage of workers, which was more acute when the economy was running hot. The Northeast economy has definitely slowed down, feeling the effects of whether it be federal policy or costs or whatever. So that is muting the impacts of the labor shortage.

But there is also a skills shortage. A lot of the older tradespeople who were highly skilled have retired, and we haven’t necessarily replaced that. So it’s a quality and a quantity issue that I think is going to be glaring if the economy should start to get busier.

Is it just a matter of enticing more younger people into the trades? Do you work with universities? Do you work with community colleges?

On the labor side, it’s a lot of work with unions and it’s a lot of training and development. I do think that younger people are starting to recognize the benefits of being in the construction trades, whether it be the pay, benefits, quality of life. 

On the professional side, we continue to work with a number of colleges and institutions in order to feed our pipeline. We have a really robust intern program. Across the board, we had 200 interns at Consigli this summer. We’re not hiring that many, but it lets us try out a lot of younger people that had never been here. 

Is that a lot?

I would say this year was heavy. But I would say we’ve averaged around a 175 level. 

Where does most of your business come from, geographically speaking? 

I would say, just because we’re from here, Boston has represented the majority, but it’s declining at this point. New York is growing in terms of our own market share and where we get work from. The U.S. Virgin Islands is definitely the highest growth right now. But I would say, as an overall market share, New York is growing, and we’re seeing New England states as a little slow now.

Where does your business come from asset-wise?

Historically, our biggest market has been higher education or education in general. We do a lot of health care work, we do a lot of life sciences work, and we do a fair amount of commercial work. 

The market where we’re trying to develop and grow is energy. We have a division here called Arch Energy — decarbonization projects, energy efficiency, doing a lot of geothermal wells. 

Is that replicable? 

It is replicable. We were a bit worried because there had been so many cuts in federal incentives for that work, which was driving a lot of public programs. But with energy costs increasing rapidly, we’re seeing a lot of businesses and institutions looking at their energy costs and saying, “Hey, forget about incentives, I need to do something to contain my energy costs.” 

So, yes, there’s a real business there. We’re seeing work in battery storage because we don’t have enough electricity to supply our grid, especially with the advent of AI and data centers. 

Well, let’s get to the obligatory AI question. Is artificial intelligence playing an actual role in construction? Or a bigger role?

It’s playing a role. There’s a lot of excitement around it, and I think there’s some exaggeration. But AI right now is a tool — just like technology is a tool. You still have to know how to build. You still have to know how to maintain a relationship. You still have to know how to work safely. 

AI and all other technology are tools in your toolbelt to help you to do that better. So AI is allowing us to do more faster, if you will, and it may be a little bit better. 

But you don’t envision a site manned mostly by robots in the near future or something like that?

No. [laughs] 

There are warehouses like that now.

There are. But the work is repetitive. 

I liken a construction site to an orchestra. You’ve got hundreds of different people coming from different socioeconomic backgrounds, different languages, different skill sets, all doing different trades. A construction superintendent or project manager has to basically organize and align them on a daily basis and oversee that. I don’t see the work that happens being done by robots, and I certainly don’t see the people overseeing them as being replaced by robots. 

I didn’t think of the oversight. 

And, if it did come to that, I’d get into something else, because I don’t want to be a part of that. 

Are there any projects or types of projects that you steer clear of? Are there ever worries that a developer won’t have the financing to finish? Oftentimes, they’re picking you. But how do you decide to partner?

There’s a lot of different factors. We have a pretty comprehensive evaluation process for any project that we go after. Financing and the ability to pay is one of them. Construction has the second-
highest failure rate of any business in the United States, just after restaurants. I don’t want to be one of those. I’ve been full-time here at Consigli since 1990. The majority of businesses I knew at that time are now gone. 

Really? Competitors?

Competitors and just companies I admired. This is a 120-year-old business — I don’t want to be on that list. 

So, qualifying our owners is a big part of it. Then there are also jobs that you want to build. We don’t do a lot of work that is going to get ripped out in five or 10 years and done over, because this work is too damn hard.

How does the present economic and business cycle compare to previous ones?

It’s interesting. There are so many things that seem the same. Relationships matter — that’s the same. It also seems that we always overbuild something and get a glut, and then spend years absorbing, like life sciences now in the Boston area. Back in the 1990s, it was residential that we overbuilt and had a glut. Office space, there was a time when we built too much. That’s kind of what I would say is a recurring problem.

But the economy now is much more international and complex. Materials are coming from all over the world. So you’ve got much more to manage, and technology has driven a lot more complexity into it. Now, technology has had a lot of benefits. We can do much more much faster than we ever could before because of technology. But it’s also a much more complicated business as a result of that. 

Are there any other acquisitions on the horizon? Any M&A activity to talk about? 

No. There’s none on the horizon. We’re not a national or international company. We’re a regional company. The reason I got into construction was to know the people we built for and to feel like we were having an impact on those buildings and to know the people that work for us, including the tradespeople. We don’t have any grand strategy to be national or international. 

But you do have a big footprint?

We have a big footprint. But we like the size and the locations we’re in. 

You played football at Harvard, right? Center?

I did.

That’s not really a star position. What lessons did you take from that?

That’s where they stick the short, fat kids. [laughs] That’s where I learned humility. 

Tom Acitelli can be reached at tacitelli@commercialobserver.com.