A Company Update from Advanced Roofing CEO, Rob Kornahrens
The first half of 2021 was busy at Advanced Roofing. We currently have a strong backlog of projects and a great deal of bidding activity across the state. However, as the world re-opens and we get back to normal, we face new challenges that include raw material price increases, shortages from suppliers, and inflation in the economy.
We’ve seen a significant price change on raw materials for roofing projects overnight, with delivery dates non-negotiable. This is causing significant delays with our projects. Manufacturers are working through COVID shutdowns and the material shortages that are causing these issues, so we hope the second half of the year will play out more optimistically.
Another challenge we face is starting jobs on schedule due to a shortage of metal, fasteners, and adhesives. These issues began as a combination of the perfect storm: the freeze in Texas earlier this year shut down many chemical plants; there were shipping issues worldwide due to COVID outbreaks and other matters, and trucking continues to be a big problem in the United States.
Then we have the concern of inflation in the economy. The prices we see with materials have increased up to 40%, and we are told it’s not going to let up until sometime in 2022. We already see lumber increase almost 10x the normal price. All in all, we’re in for a challenging year, something I haven’t seen in my 38 years in the roofing industry.
Commercial Roofing Trends in 2021
There is good news to share. With the vaccine rollout, we are getting relief from the pandemic and see more businesses opening, which will help stimulate the economy. The future is promising, however, as mentioned above, the success of the second half of the year will depend on how quickly the raw materials supply can stabilize so we can get projects off the ground.
Some of the notable re-roofing projects we completed in the first half of 2021 include a luxury high-rise condo, Villa Magna Condominiums in Highland Beach; a silicone roof coatings project at Miami Community Center; and a roof replacement and mechanical chiller upgrades for Hawkes Bluff Elementary School in Davie.
In roofing product trends, we see a lot of interest in silicone coating systems as they can prolong the life of a roof system and extend a roof warranty up to 10 years. Watch our roof coatings webinar to learn more about these products, click here.
Hurricane Season 2021 – Is Your Roof Prepared?
We are expecting another above-average hurricane season this year. This is the time to take precautions. Schedule your roof inspections now, and make sure all drains and gutters are clear of debris. If you experience roof damage after a storm, give us a call. We are part of Roof Connect, a national organization of 60 independently-owned roofing contractors from the United States. With this support, we have over 3,000 roofers on call should we need help. With seven offices throughout the state, 575 employees, ARI has sufficient in-house resources to help you should damage occur following a major storm.
To ensure additional support following a hurricane, we recently participated in the annual “Roofing Matters Day” to promote additional funding for apprenticeship programs and the H-2B visa that allows workers in from other countries on an emergency basis when unemployment is below 5%.
Solar Energy Trends for Businesses
In solar trends, we see strong demand statewide for rooftop and carport solutions, especially following recent rate increase announcements from utility providers starting in 2022. According to FPL, small and medium-sized business customers would see annual rate increases of 3.9% to 4.4% between 2021 and 2025, which equate to over 18% during this time period. Large commercial and industrial customers with more complex rate structures should contact their account managers for information about their rate adjustments. With the 4% fuel increase we have already seen in May, combined, these increases could well exceed over 30% in total. One of the best ways businesses can offset some or all of their electricity use is by investing in solar, and there’s no better time than the present. The solar investment tax credit (ITC), which was scheduled to drop from 26% to 22% this year, will remain at 26% for two more years. This means that all solar projects that begin construction this year and next will be eligible to receive the 26% tax credit. The credit will drop to 22% in 2023 for all market segments, including commercial and residential, then down to 10% permanently for the commercial and utility markets in 2024.
Advanced Roofing and Advanced Green Technologies were busy in the first half of the year completing solar projects for clients like JP Morgan, Miami-Dade Public Schools, and Costex Tractor Parts in Miami, Florida. Recently, Advanced Roofing CEO Rob Kornahrens and Executive Vice President Clint Sockman visited the Costex project to meet with the owners and walk the massive solar roof. The ARI and AGT teams worked together to build this 1.5 MW system, which holds the title of the second-largest solar roof in Miami. This project is truly a masterpiece.
Companywide Training and Development
We are investing heavily in training, infrastructure, and software, and are seeing improvement every day. The three-year ABC roofing apprenticeship program has strong traction coming back from virtual classes in 2020 due to COVID to in-person learning. Our goal moving forward is to recruit younger generations into the industry.
Continuous learning and skill-building is a priority for our leadership team. The ARI management team recently participated in an offsite retreat where they heard from various resource speakers to sharpen their knowledge to get better at what we do. We continue to invest in training, as we did with Advanced Access, which has been a great tool for property managers. With this convenient tool, our clients can dispatch leaks, track progress, and process invoices quickly.
Company Growth and Expansion
Advanced Roofing was founded more than 38 years ago as a family company. My sons are now 37-years-old and I have a grandson. We are built to go three generations or more. How do you do that? By investing in people, equipment, and in buildings. Our most recent purchase was a $2M commercial property in Miami which gives us the space we need to grow and better serve our customers in the area. We are also installing solar on the roof to showcase our technology and commitment to renewables.
Advanced Roofing in the Community
Helping others is the cornerstone of our business, and we are proud to support the community through several charity efforts. Here are a few highlights from the first half of the year:
- CNA/NRCA Community Involvement Award: We are proud to be recognized nationally by the National Roofing Contractors Association (NRCA) and CNA, one of the largest U.S. commercial property and casualty insurance companies, with a First Place award for our recovery efforts in the Bahamas following the devastation caused by Hurricane Dorian. We secured enough shingles and materials to build 100 homes on the island.
- Gloria Mugford: Gloria suffered a bad slip and fall as a result of a leaking roof in her home. After being asked to provide a tarp for the roof, we saw that the 87-year-old Pompano woman’s home was in really bad shape so we worked with a group of contractors to completely renovate the home and make it safe for her to enjoy.
- We continue our support of Sonrise Mission and Habitat for Humanity where CEO Rob Kornahrens recently participated in the CEO Build. As part of this event, each CEO donates $5,000 to build a house together. (If you want to see some fun, watch a bunch of CEOs who aren’t used to doing physical work.) We are also working with Junior Achievement of South Florida’s entrepreneurship program, and building a four-seater solar car for A.D. Henderson University School to compete with this year.
- We are also mentoring high school and college students and hired two students from Clemson University’s Roofing and Construction Management Program, which we sponsor.
- Advanced Roofing CEO Rob Kornahrens was a judge in the Broward College Entrepreneurship Experience (BCEx) Virtual College Pitch Competition on July 1st that provides seed money for students, minorities, female startups, and small businesses. The event had an exciting finish with a three-way first-place tie. In total, over $28,000 was awarded to nine contestants. We are proud to be one of the first organizations to sponsor this great program with a $50,000 donation from the Kornahrens foundation.
Learn more at https://www.facebook.com/bcexbroward
Looking Forward to the Second Half of the Year
Infrastructure is a hot topic in the news lately and for good reason. In Florida alone, we have 1,400 miles of coastline that is being threatened with a rising sea level. The projected rise is 40 inches by 2070. That’s a lot of infrastructures that are going to be needed, between the sea walls and pumps. ARI is doing its part to affect change in the state, with Rob Kornahrens as a member of the Florida Climate Change Task Force and also working locally with the Community Resilience Committee with Broward Workshop. We continue to work on getting engineering surveys done to determine the jobs that are going to need to be done to protect us and our drinking water because as saltwater comes up, it’s going to get into our aquafers, impacting our drinking water.
As we look forward to the second half of 2021, the material shortage will continue to be very challenging. I think we’re going to see a tightening of the economy due to the risk of inflation, with consequential rises in interest rates. This is a challenging time but that’s what we do at ARI. We’ve always taken on challenges, meeting them by being innovative, giving our customers the best products out there and our employees the best place to work.
ARI prides itself on being a resilient and innovative company putting out a great product for our customers. We look forward to being your top choice for roofing, solar, air conditioning, and more in 2021.