Consolidating To Expand
Chicago-area contractors Graycor and Capitol, who have operated under the same umbrella since 2002, have now combined their services to expand their horizons.
Randall Shearin

The market for commercial real estate construction services in the U.S. has changed with the consolidation of large developers and the regional to national expansion of many developers and retailers. To respond to the changes its clients were going through, Graycor Construction acquired Capitol Construction in 2002 and consolidated the two companies' capabilities, creating a national platform to provide services.

Graycor's experience in spa work led it to build this Elizabeth Arden Red Door spa at Pentagon Row in Arlington, Virginia.

One of the key strengths of the union was that Graycor was able to expand its offerings immediately. Matt Gray, president of Graycor Construction, says the two companies were so busy looking at their similarities, it wasn't until after the acquisition that they realized all their differences. In this case, though, the companies' differences were its combined strength. Graycor, for instance, had clients who wanted to build specific product types that it previously had not built.   New employees from the Capitol side of the business, however, had those skills. Spa construction was one product type where this mix was beneficial. Graycor was able to use Capitol's spa expertise to augment construction of hotel projects.  

Graycor's acquisition of Capitol was a bit non-traditional. Since both companies had been around for a very long time — Graycor for 85 years and Capitol for 55 years — they both had very established identities. For the past few years, the united company continued to operate under both the Graycor and Capitol banners. Both companies also maintained their separate offices: Graycor's in Homewood, Illinois, on the south side of Chicago, and Capitol's in Palatine, Illinois, in Chicago's northwest suburbs. Recently, with so much going between the two, the company made a decision to operate together as Graycor.

“We were able to draw the best of what each company had to offer for new jobs,” says Gray. “We're now at the point where it makes sense to go forward as one company with one name.”

Better, Graycor Construction and Capitol Construction are part of the Graycor Companies. The parent company's holdings also include Graycor Industrial Constructors, Graycor Blasting and Graycor International. As a result, Graycor Construction and Capitol Construction add to the capabilities — as well as being able to borrow from them — of the parent company.

Graycor intends to keep both its Chicago offices active. The offices are advantageous from a labor perspective. When the company is seeking construction employees, the company's Palatine office draws from as far away as Milwaukee, while its Homewood office draws from central Illinois and Indiana.

“The offices help us draw the best construction professionals we can find, from Milwaukee to Michigan City,” says Gray. “They also help us serve clients within driving distance to a lot of midwestern markets.”

Graycor does a lot of construction for retailers like CVS/pharmacy. The company built this Phoenix-area store for the retailer.

“We were really able to expand our knowledge and awareness of some good subcontractors and suppliers who serve the same markets that we serve,” says Gray. “It's just a smaller world.”

One project that Graycor recently completed was the remodel of the Kohler American Club in Kohler, Wisconsin. This spa and hotel complex is the Midwest's only five-diamond resort. The project included constructing a five-level, 15,000-square-foot addition near the Carriage House, as well as adding space on the lower and first levels of the spa. A notable project in the Chicago area is the company's renovation of the historic Wrigley Building in downtown Chicago. The first phase included the renovation of the north and south lobbies, a new entrance, restoration of a portion of the building's limestone façade, and new exterior sidewalks. The second phase of the project, completed this summer, included the restoration of façades along Michigan Avenue and the rehabilitation of the building's signature lighting system. The Wrigley Building renovation was a unified effort for both Capitol and Graycor. Strengths and divisions of each company were used to accomplish the project, with seamless delivery to the client.

Graycor performed the renovation work for Taubman in its recent renovation of Regency Square Mall in Richmond, Virginia.

“With technology being what it is and where we are positioned in the U.S., we are able to build projects for clients in areas like Long Beach, California, San Francisco, Washington, D.C., and Atlanta,” says Gray. “We are working hard to offer our clients the same high level of service and competitive pricing in other parts of the country that we offer in the Midwest.”

Capitol had an office in the Phoenix area, which Graycor has continued to develop over the last few years.

“Knowing that we have that presence in Phoenix, a lot of our clients are more comfortable working with us out west,” says Gray. “Our people are able to be just that much closer to the project sites.”

Graycor is building the common area retail space at Forest City Enterprises' The Promenade at Bolingbrook, currently under development in Bolingbrook, Illinois.

The company also recently renovated Taubman's Regency Mall in Richmond, Virginia. The renovation was designed to create a more inviting atmosphere at the center, including amenities like family restrooms and a children's play area. Brighter lighting, new signage and an updated color palate were also installed.

Graycor has built locations for GameWorks, including this unit in Long Beach, California.

While finding a steady flow of mall repositioning projects in the Midwest, Graycor is increasingly involved in several ground-up construction projects in Arizona and California.  

“We're a little bit different model than the old school general contractor,” says Gray. “We think that clients today really demand that their construction partners have particular competencies within their specific project types.”

Graycor has done a lot of work for Kerasotes Theatres, including building this multi-screen theater in Schererville, Indiana.

“There seems to us to be an increase in activity in the Midwest,” says Gray. “It is fairly broad-based, with the possible exception of the housing market, which has consistently been strong. The hotel industry clearly is in a recovery mode. Retail follows housing, so it is definitely on the upswing.”

The consolidation of the two companies has worked beautifully, according to Gray.

“It couldn't have gone more seamless for us over the past few years,” he says. “Now we're at a point where we can really get going.”