- New York City-based STO Building Group has added another contractor to its portfolio of companies, its third acquisition of a major construction firm in two years.
- Increased demand in the industrial and distribution real estate sector helped prompt the merger between STO and Fairfield, N.J.-based RC Andersen Construction earlier this month, STO CEO Robert Mullen told Construction Dive.
- RC Andersen will retain its name, logo and cultural identity within STO, which now includes almost a dozen separate companies. RC Andersen's current leaders will become shareholders in the organization while maintaining their roles as the firm's senior leadership team, according to a press release.
STO's "family of companies" model has propelled it from No. 14 to No. 6 on ENR's Top 400 list in the last two years, with 2020 revenue of $8 billion. Utah-based Layton Construction merged with STO in 2019 and Abbott Construction, located in Seattle, joined in 2020.
Established 15 years ago, RC Andersen offers comprehensive construction management and project management to clients that include developers, property owners and tenants, especially in the distribution and cold storage sector.
STO also serves industrial and distribution facility clients throughout North America, said Mullen. "And we don't see that slowing down anytime soon," he said.
"RC Andersen’s particular expertise will only enhance the specialized knowledge and experience we're able to offer clients in this sector, as well as provide RC Andersen’s existing clients with extended services and geographic reach across our platform," he said.
The two companies did not release financial details of the transaction.
Joining STO represents the next step in RC Andersen's evolution as a growing company, said president and founder Bob Andersen, adding it also enables the firm to continue creating new career opportunities for its employees.
"The merger allows us to maintain our marketplace identity, name recognition and legacy, while giving our employees the opportunity to invest in the company’s employee ownership program and other benefits of being part of a larger organization," he said.
The anticipated continued growth of the industrial market made the timing right for this merger, Mullen said. According to Cushman & Wakefield, the North American industrial absorption forecast from 2021 to 2022 calls for a robust 481.3 million square feet. Average net asking rents for classes of industrial product will surge to a new nominal high of $6.97 per square foot by late December 2022, Cushman & Wakefield predicted.
The recent mergers position STO to take full advantage of this boom with its national industrial footprint in the sector, Mullen said.
"The addition of RC Andersen in the East, coupled with other STO Building Group businesses and Layton’s presence in the Western and Central United States, gives us a national industrial footprint that clearly distinguishes us as the market leader," he said.
STO's other companies are:
- Structure Tone
- LF Driscoll
- Structure Tone Southwest
- Pavarini Construction Co.
- Pavarini McGovern
- Govan Brown
- Ajax Building Co.
- BCCI Construction Co.