Gilbane CEO Edward Broderick On a Tougher Construction Industry

It’s a tough time to be in construction. 

The industry is facing a set of challenges that includes rising insurance, labor and material costs as well as issues related to climate change and a macroeconomic picture that seems cloudier by the day. 

One company navigating these challenges is Gilbane, the legendary 155-year-old, privately held and family-owned construction and real estate development firm that has projects in the works around the world.

For the last nine months, Providence-based Gilbane has had new leadership in Edward Broderick, a 43-year company veteran who took the reins from Thomas Gilbane in October, and is working to execute a vision for the company that focuses on innovation, strategy and — especially now — technology. Broderick, a member of the fifth generation of the Gilbane family, had been the CEO of the company’s Gilbane Development subsidiary for seven years prior. 

Broderick — who joined Gilbane in 1978 as an intern and went full time four years later — recently sat down with Commercial Observer to discuss his time leading Gilbane so far, how the company is innovating, and the broader challenges impacting the construction and development industries. 

This conversation has been edited for length and clarity.

Commercial Observer: Where does Gilbane fall within the broader real estate industry?

Edward Broderick: We’re in an interesting position in the industry. Overall, across our platforms, we have about $10 billion worth of activity that’s happening — and we deliver that through 50 offices, plus or minus, across the United States and some international operations. And then we’re active in a whole group of different market sectors, and we deliver through an integrated platform that has construction and real estate. And, so, when you look at all of that, we see things from a lot of different angles at Gilbane. 

We have a centralized control for information so that we can share a lot of the experiences we’re having and a lot of the ups and downs that are occurring in the market on a real-time basis. And that sits on top of, of course, the history of the company, which is we’re 155 years old, family owned, and we have a very strong governance in place. 

So we’re in the fifth and sixth generations of family ownership and leadership of the company. That’s pretty unique, and we’ve seen a lot of things happen in the economy over that period of time. And, while the current environment is different than anything that’s ever happened, a lot of things do correlate to what has happened before.

How has Gilbane been innovating and embracing new technology?

Technology and AI automation is a driver in a lot of industries, and we believe that in the real estate and the construction industries we’ve been lagging in that, and that there’s a tremendous opportunity for us. So we have a lot of initiatives going on. 

We’re involved with projects across the United States. In Rochester, Minn., we’re involved in a $4 billion or $5 billion new health care facility that the Mayo Clinic is building, and that is a multiple-year, fully engaged construction project for us. In New York, we are finishing up the Buffalo Bills stadium. And we are very deeply involved in the communities we work in — right now in Brooklyn we just financed, working with the city and issuing bonds, the Brownsville Arts Center project.  

These are large, complicated projects, and we have a tool we’ve been rolling out across our platform that allows us to take all the documents associated with a project — the construction drawings, the specifications, the requests for information — put that into a database, which we then have on a handheld. So we can be out in the field, touring one of these large facilities, and we can ask it a question, and it will bring all the relevant documents right to us. 

In the past, when I was working in the field, I would take notes, go back to the drawing, have to look up the spec, and it could end up taking three to four hours. Now, with this new database we rolled out in the fourth quarter of 2024, we can figure something out with 90 percent accuracy in 15 minutes. 

In 2023, we rolled out a robot that we use on our sites that helps us monitor progress. It helps us take photos on a regular basis. It helps us look at safety, which is an important part of our world, and just saves time and efficiency for the teams.

There’s a lot more of that coming, and we have a whole team that focuses on innovation within Gilbane.

Gilbane recently launched a new team that focuses on procurement. What was the driver behind this?

We see that there’s going to be consolidation in the industry. The supply chain is going to consolidate, and we have a group that we call Next Direct, and their whole world is supply chain. 

Having this diverse platform gives us a tremendous amount of visibility into what’s happening with materials and equipment, and when things like tariffs or something like that come into the world we have the ability to see and to touch and to maneuver, and that allows us to serve our clients in a really broad way. We become trusted partners because we have information that can really be helpful for them delivering their projects.

Let’s discuss tariffs and other challenges like rising labor and material costs. How is Gilbane navigating these things and how are you seeing it impact the industry as a whole?

There’s no question that things like tariffs have a direct increase in material cost and they do impact the industry, and it can cause supply chain disruption. But that’s where having a specific expertise in something like supply chain allows us to anticipate and to see what’s happening, because there are usually alternatives that you can look for — whether it’s alternative suppliers, or you can suggest to a team that they can use an alternative material or an alternative approach.

The key is to have that information early enough in the process that you haven’t gone too far down the road, and now you know it’s really hard to step back. That’s a key component. So it helps in the planning and the feasibility of projects, because there are projects that are being impacted right now, that are being put on hold, or the feasibility is being challenged.

Is this something that Gilbane is dealing with too?

We have property that we own in Florida that we have been unable to put the financing together for and get the construction costs to align with the marketplace. So we’re holding the land, and we’ll land bank that until the markets turn. 

There was a tremendous amount of housing being built before we had this escalation in interest rates. And so the supply was being overbuilt, and it has now slowed dramatically. The demand is now moving to a point where it will start to drive the rents higher, which will support an increase in cost, whether it’s hard cost or its interest rates.

That’s why understanding these things over a long period of time makes a lot of sense. Companies like Gilbane need the understanding of that, and they need the depth of an organization where you can take something and just put it on hold for a year or two and then develop it because the markets bounce back. 

Look at New York — look at the cycle that New York has gone through with COVID. That’s what happens for different reasons in the marketplace.   

Is New York a more difficult market for construction and development than others?

New York is a complex market. There are a lot of regulatory requirements. But, that said, they are well understood, and, if you understand them, you can navigate them, and you can understand the timeline that’s associated with them. To investors, that’s a very important thing — almost more important than being somewhere where there aren’t quite as many regulations, but you don’t understand the timeline or what the variables are.

You’re trying to make a business decision on where to invest. And, so, if you go to New York, you say, “Oh, there’s a lot to do here. It’s going to take me X period of time, but I know I can get there in that period of time.” And I think that’s one of the reasons that New York has rebounded as it has. There’s resilience and consistency. 

How is Gilbane navigating the rise in insurance costs?

Insurance costs are rising for a variety of reasons. There’s different components to it. Some of it is tied to locations. With our operations in the Southeast, there are hurricanes, or other areas where you have floods or earthquakes, and then the wildfires that happen in California, they are having an influence on insurance and these are things we have to be very, very aware of. 

We start by looking at risk management as a whole, and insurance is one component of that. Because, in the end, what our clients want and what we’re trying to do is to have a safe environment where everybody goes home to their family safely at the end of the day. We have a tremendous amount of focus on the whole of safety and caring.

If you apply that to good project planning, and you’re lowering and mitigating the opportunity for some type of a challenge to happen, and, if you have good connectivity with the insurance industry, so that the brokers and the carriers — who we personally meet with on a regular basis — know what you’re doing, you can design products with them that can be the most cost effective for that particular project. It is an area that we’re all focused on and it requires proactive thinking.

Can you highlight a particular sector that is getting a lot of attention right now and what challenges it might be facing?

Data centers are definitely a key market sector right now, and we have a number of projects we’re involved with, and they are really being driven by the AI revolution. There’s a whole other level of data centers that’s being looked at and being built around the world — and key resources associated with those data centers are water and power. Power is really, in a lot of cases, the constraint that we will be facing as a nation. We’ll need to figure out ways that we can continue to deliver the power that’s required for these data centers.

And the supply chain challenges tie into it because there is a demand right now for more computing capacity than we have. So having the ties into the supply chain that I was talking about earlier allows you to really help identify the path to delivering these projects as quickly as possible.

There’s also a labor shortage in a lot of the country, and for these data centers you need to have the relationships and the manpower yourself to lead these and other large projects. 

How is Gilbane navigating the labor shortage?

We have another team that is part of our organization called Next 150 and that is our self-performing group. When we manage big projects, they come in and they help us by self-performing — actually pouring concrete and doing that type work. We hire and train them and that also allows us to bring people from there into our management team. And that’s near and dear to my heart since I started out as a laborer myself. 

Then there are industry organizations like the Architecture Construction Engineering mentor program, where the whole industry is working on trying to draw and bring people into the construction industry. We are a leader there, too. As much as we’re focused on the supply chain and innovation, labor is another really key component that we try to play a key role in. 

Let’s end with a global conversation. Tell us about a project Gilbane is working on outside of the U.S. and how the environment differs.

There are a lot of differences in the regulatory environment. It is an environment where you need to measure twice and cut once, and really know where you’re going as a company. And we’ve done that. We stay focused and stick with products that we really understand, and team with local partners who really know that market. That’s been the strategy that we have implemented, and it has worked.

By way of example, in Germany right now we are building — on a U.S. military base — the largest U.S. hospital outside of the United States proper. That is in partnership with a company who is based in Germany. So we’re bringing our skill sets to the table and they’re bringing their skill sets to the table for this 1 million-square-foot project. 

There are regulatory differences and we need to make sure that we align with local jurisdictions. In Germany, their safety requirements are not quite as stringent as ours, so we had to bring that to the table. And there are also differences in contracting methods.

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.