AABP EP Awards 728x90

Australian-born construction pros go solo in Des Moines

/wp-content/uploads/2022/11/BR_web_311x311.jpeg


The founders of Beal Derkenne Construction LLC traveled nearly 9,000 miles to start their commercial building careers in Iowa, and the business partners said they’ve moved up the real estate ladder faster in the United States than they would have Down Under.

Andrew Beal and Michael Derkenne met in 1998 at the University of Newcastle in Australia, where they played rugby together and each earned a bachelor’s degree in construction management.

Derkenne left Sydney first, relocating here in 1999, after he befriended a Des Moines native and Iowa State University student who was taking part in a six-month foreign exchange program at Newcastle. That friendship turned into a courtship and they married soon after.

“I probably hadn’t heard of Iowa before I met my wife,” he said. “The next thing I know, I was moving to America.”

From 2001 to 2010, Derkenne worked for Nelson Construction, first as a project manager in Des Moines and then as vice president of construction operations in Phoenix.

Beal, who was recruited by Cost Planning and Management International Inc. to oversee the build-out of the state of Iowa’s 300,000-square-foot Iowa Laboratory Facility in Ankeny, first stepped on U.S. soil in 2003.

After marrying in 2005 and moving to Miami to work for Bovis Lend Lease Inc., he joined Nelson Construction as a project manager in 2007 and moved to Arizona to work with Derkenne at the peak of the commercial real estate market.

After three years of good times, which included the planning and completion of a number of projects, such as a 30,000-square-foot office building in Chandler and a 38-unit condominium project in Phoenix, the recession took hold, the construction pipeline emptied, and some owners began to walk away from signed contracts.

“Phoenix, it just hit a wall,” Derkenne said, referring to the recession’s effect on managers and contractors in the boom-and-bust region. “There were no projects. At one point, no one could keep up, and then there was just no work. Companies were just falling out of the sky, shutting their doors, closing down.”

Nelson Phoenix LLC, which hung on until after it completed a $32 million, 11-story student housing project in Tempe, eventually closed, too. “All the staff moved back (to Des Moines) in 2009,” Derkenne said. “We still had an office down there, but there was no staff present. We were pretty fortunate; we actually lasted longer than some companies.”

So the men returned to Des Moines to tackle new ventures conceived by Nelson Construction President Mike Nelson and developer Jake Christensen, who in the past year have delivered two multimillion-dollar historic rehabilitation projects in downtown Des Moines.

“We jumped into the deep end of the pool by coming to Iowa,” Derkenne said, adding that he and Beal were heavily involved with the preconstruction and construction phases of AP Transfer Lofts, a 63-apartment market-rate housing project at 340 S.W. Fifth St., and the 93-unit Hyatt Place Hotel in the Liberty Building.

“We felt we left him in a really good position,” Beal said of his and Derkenne’s former employer. “We essentially fulfilled our duties on our projects and cleaned up our projects. There was an obvious window there where it was pretty quiet, so we jumped.”

That jump came late last year, following a proposition by a past customer.

“We were approached by one of our previous clients who wanted to work specifically with us,” Beal said, referring to Beal Derkenne Construction’s representation of Chicago-based Campus Acquisitions LLC, which is developing a $42 million student housing project in Ann Arbor, Mich. “Fortunately, we were able to bank that money, so when we did make the commitment, we essentially had funds right out of the gate.”

Beal and Derkenne officially opened their commercial project management and construction firm in February in a leased 450-square-foot office space on the ground level of the Northwestern Building at 321 E. Walnut St.

The company, which was also selected to help manage the Winnebago Indian tribe’s $12 million hotel project in Sloan, Iowa, has since submitted more than a half-dozen bids for local projects as its co-owners work to carve out a niche in a competitive commercial real estate environment.

On March 22, they lost a bid to expand and renovate Indianola Middle School when the Indianola Community School District awarded the estimated $14 million job to a Wisconsin-based contractor.

“There are a lot of general contractors coming in from out of state and swooping in on these jobs and landing them,” Beal said, “which is unfortunate for the local economy, but it’s a very competitive market right now, and it’s one of the only markets that is flourishing.”

Beal Derkenne Construction is also negotiating a number of tenant-improvement projects, including the build-out of a restaurant space and a wine-bar space in the East Village, where the entrepreneurs have busied themselves with a steady stream of coffee meetings, lunch appointments and cocktail-hour get-togethers as they make new acquaintances and build their presence in the community.

In March, the company joined the Des Moines Downtown Chamber of Commerce, and it’s working to make inroads with the Historic East Village Inc. board of directors.

Beal, 30, and Derkenne, 31, said their biggest goal is to land a ground-up development project and begin construction by the end of the year. They said their company has yet to take on any debt and is working to keep overhead costs low.

“I think our desire is to be a general contractor, first and foremost,” Beal said. “We’ll look at construction-management opportunities and project-management opportunities. On the historic side, we’ve been through the process two or three times now; we understand that. It seems like around here in Des Moines, there are a lot more rehabilitations and tenant improvements.”

“When I left Sydney, Australia, I was an assistant-assistant project manager,” Derkenne said. “And for me to get to a project manager level, I probably would have had to work for another eight years in Sydney. When I came here to Iowa, I was given that opportunity right away.”

Related

rebuildingtogether brd 070125 300x250