Despite COVID-19 challenges that cut into its revenues in 2021, Webcor's business is expected to boom over the next five years, according to its new president.

Matt Rossie took over the reins of the San Fransisco-based general contracting firm on Jan. 1, a role previously held by CEO Jes Pedersen. The switch is part of a transition process slated to culminate with Pedersen's planned retirement in mid-2023. 

Rossie has been with Webcor for 21 years, most recently as executive vice president and chief operating officer, and will retain the latter title in his new role, according to a news release. The company has a number of projects in the pipeline, including the Bay Meadows Station 1 office building in San Mateo, California. 

Here, Construction Dive talks with Rossie about his new position, challenges from the pandemic and opportunities the company expects to capture beyond 2022.

Editor's note: This interview has been edited for clarity and brevity.

CONSTRUCTION DIVE: Talk about your new role going from executive vice president and COO to company president.

MATT ROSSIE: There's no real magic to it. It's really just all about transition. 

Jes Pedersen has been CEO now for over 10 years. His vision was to make sure we had a leadership transition that was very well communicated and planned, and that, as a result, there would be very few surprises for our employees, subcontractors and clients. 

So this year of 2022 is really a transition year where Jes and I are going to start working even more closely together, having him wrap me into some of his conversations with some of our clients that I'm not as familiar with, and really just starting to hand over the reins. 

Then, come 2023, the plan is that he will take on a purely board advisory role, and I'll take over [the CEO role] completely at that point.

How was 2021 performance? What were your main takeaways from last year?

Our business is somewhat unique. We're really a super regional player. We're not in the league of Turner, Skanska or the big national guys. Our product niche is really to be that expert in our own backyard. 

We do very large, very complicated projects, primarily throughout the state of California. 

At the scale of projects we work on, we found ourselves in a perfect storm during the pandemic. Between the uncertainty around what was happening with the virus, and the uncertainty in the financial markets, many of our clients actually put things on pause. 

For us, projects going on pause can have a substantial impact relative to what our yearly revenue plan is, just based on the fact that from the time we actually begin work to shovel in the ground, that can be anywhere from 12 to 24 months. 

So, we saw a significant reduction in revenue in 2021. That is beginning to come back in 2022. 

And what's super exciting for us is that for the first time in the history of the company, we're actually looking at 2023 through 2027. 

The degree to which we've already booked business in those years, it actually sometimes keeps me up at night because I realize we're going to have to really ramp up good quality people to be able to staff all those projects that we have in the pipeline.

What are some major trends that Webcor is seeing developing in 2022 you’re looking to take advantage of?

Well, certainly life sciences. You'd have to be without a pulse to not see that life sciences is on fire.

We're certainly tracking life sciences as a trend in the Bay Area. Definitely in San Diego where we've reestablished ourselves and to a certain extent, there's beginning to be a fair amount of life sciences activity in Los Angeles, which is exciting. 

Other than that, it's tough to read the tea leaves these days. In California, it's a very murky picture.

On the one hand, we hear about all of these companies leaving California, the great California exodus. But I've got to tell you, our boots on the ground don't necessarily see that. 

We're seeing the sublease market come back in San Francisco for commercial offices. We're also seeing certain clients who are very sophisticated clients, who are actually increasing the amount of office space that they plan to build.

So it's tough to rationalize the common understanding in the market that commercial offices are on a downswing. 

The other trend, of course, is housing. We see continuing competition for housing, and I think housing is going to continue to be on the upswing, just because we're still tens of thousands of units behind on housing in probably all the major metropolitan areas in California. 

The other thing we're looking forward to as a trend in California is infrastructure spending. We have an infrastructure group focused on water, wastewater and transit projects. And we're seeing more of those owners gearing up and releasing projects and getting ready to go out to the street.

What challenges are continuing, and how do you plan to overcome them?

We're still feeling that uncertainty with private developers. 

I think the end user, the companies who hire us to build buildings for them specifically, they're ramping up. They're ready to go. And the public sector of course, is ready to go as well. We're seeing those projects break loose. 

I would say the service that we need to be providing to our clients more than ever, is that of really being creative in our thinking about how to reduce cost on projects, and how to enable them to move forward. 

It really is a case of trying to find the best solution for whatever the programmatic need of that client is, and bringing the best ideas to the table. We're working with certainly private developers in that regard. But also, some of these end user clients as well. They're saying, 'Hey, look, we need to do this, but we want to do it at this price point.' And we help them figure out how to achieve that goal. 

The one real outlier out there for 2022 though is supply chain. This is obviously not news to anybody, but the supply chain issues are certainly real in the short and mid term. 

I think everyone's hope, of course, is that it'll get ironed out in the long term. But it's something that we need to keep an eye on now. In a financed situation where a private developer is looking for a lender, it creates even more pressure because subcontractors and suppliers are unable to hold their pricing for as long as that period of time. 

That puts the pressure on the developer to potentially enter into agreements with the suppliers ahead of having that financing. So they're going cash out of hand in order to hold those material prices. 

I don't think we're going to see it really rationalize itself very quickly. I think it's going to take some time.

Is there anything else you'd like to highlight here?

For every business on the planet, it's the work from home mentality, right? 

It's how do we continue to provide our employees with the most support and the most flexibility in this new environment that we find ourselves in? 

I have been so taken by the challenges faced by our employees who have young children. How do you deal with young children when you don't have daycare options available?

Obviously, these things are all going to pass. But I think it really has started an excellent dialogue around how are we going to be more flexible and enable hybrid work arrangements. 

So, that's No. 1. Another thing I would say is the events of 2020 really brought to light the issues around diversity, equity [and] inclusion, and that becomes a whole other focus. 

Our chief people officer Mei Lin Wolff is extraordinarily passionate around this issue. We have really set ourselves targets that we want to be achievable. And the problem in the construction industry is Webcor's metrics look really good relative to industry in general, but the industry is so bad in this area, that that's not saying that much. 

So, I think it's another one of these issues where the industry as a whole has to embrace this concept, that by bringing in a more diverse workforce, we're actually going to gain from it. And when you look at the data — the data is there — more diversity in your workforce equals better returns. 

So, we really believe this is the right thing to do, but we also believe this makes business sense. So that will continue to be a trend in the industry and certainly for us here at Webcor.