Income Belly Flops; Firms Swim for Work Offshore

Top 250 Architecture Firms’ 2009 revenue fell dramatically, while foreign work was stable.

By Charles Linn, FAIA

The dog days of summer are here, and for Practice Matters readers this means one thing: It’s time for the release of RECORD’s Top 250 Firms list. For the uninitiated, the list ranks firms according to last year’s revenue, as reported to our sister publication Engineering News-Record.

Last July we marveled at the fact that while the recession was already well under way during 2008, total revenue for the profession was up 9 percent, from $11.5 billion to $12.5 billion. Waiting to find out how much revenue would decline as projects were cancelled and backlogged work ran out has been a bit like watching a fat man start a swan dive off the high board: You want to avert your eyes so as not to see what happens when his flabby midsection smacks the water, but you look on and hope for a graceful landing. It would have been better to turn away. The combined revenue for the Top 250 firms in 2009 totalled $10.2 billion (B), $2B less than the year before. As difficult as it is to comprehend the evaporation of so much money from the profession’s income stream, growth over the past half-decade was phenomenal, and undoubtedly unsustainable. In 2005, income for the largest 25 firms on the list was $3.3B. By the end of 2008, that had increased a whopping 94 percent, to $6.4B. In any industry that would be a huge gain. In 2009, their income declined to $5.1B.

These firms bring in about 50 percent of the Top 250’s total revenue. Thirty percent of their work came from the Middle East, China, and elsewhere in Asia. While the big 25 suffered a $800 million (M) decline in domestic revenue last year, from $4.4B to $3.6B, the amount of revenue from foreign work only decreased by $400M, from $2.0B to $1.6B.

Revenue from foreign sources doesn’t help smaller firms much — 70 percent of the Top 250 list made less than $10M in offshore revenue last year. And in fact, total income for firms ranked between 100 and 150 on our list already peaked in 2007, coinciding with dramatic drops in all of the developer-driven building types: retail, offices, hotels, and multifamily. If your firm specialized in these sectors, you probably did not land softly — average revenue for firms ranked between 151 and 200 on our list, whose income starts at $8M and goes up to $16M, was down 24 percent last year. But, firms that ranked between 201 and 250, whose revenue ranges between $3.7M and $8M, only saw their revenue decline by 12 percent.

Life is going to continue to be tough for architecture firms, particularly those that depend on developer work. But in mid-May, the AIA said its April New Projects Inquiry Index hit 59.6. Any number over 50 indicates surveyed firms saw an increase in project inquiries compared to the previous month. Kermit Baker, the AIA’s chief economist, said noncommitally, “It is quite possible we will finally see positive business conditions in the foreseeable future.” That doesn’t drip with enthusiasm, but don’t jump yet.

Editor's Note: We began publishing data on the Top Firms in 2005. This year for the first time we have created tables that put this data in historical perspective. Please view the slide show to view these findings.

 

HOW TO USE THIS TABLE The companies included in Architectural Record's list of the Top 250 Firms are ranked according to revenue for architectural services performed in 2009 in $ millions. The list is compiled from a survey conducted for Engineering News-Record’s annual Top 500 Design Firms Sourcebook. The McGraw-Hill Companies publishes both Architectural Record and ENR. Key to how firms classify themselves: A = Architect AE = Architect-Engineer AP = Architect Planner EA = Engineer-Architect AEC = Architect-Engineer-Contractor (not all combinations listed)

 

 

Top 250 Firms: 1-50 | 51-100 | 101-150 | 151-200 | 201- 250

 

ARCHITECTURE FIRMS RANKED ACCORDING TO 2009 REVENUE

Rank Firms listed by 2009 architecture revenue as reported to ENR in its Top 500 Design Firms Survey Type of Firm Total Architectural Revenue Domestic Architectural Revenue International Architectural Revenue Percent of Design Revenue from Architecture Total Design Revenue 1 AECOM Technology Corp. Los Angeles, Calif. EA 695.10 278.00 417.10 14% 5113.50 2 Gensler San Francisco, Calif. A 549.95 417.73 132.22 100% 549.95 3 URS Corp. San Francisco, Calif. EAC 424.10 356.10 68.00 9% 4847.60 4 Perkins+Will Chicago, Ill. A 406.90 291.20 115.70 100% 406.90 5 HDR Architecture Inc. Omaha, Neb. AE 348.70 290.70 58.00 24% 1456.50 6 HOK St. Louis, Mo. AE 345.00 219.00 126.00 73% 473.00 7 HKS Inc. Dallas, Texas AE 262.00 232.00 30.00 100% 262.00 8 Skidmore Owings & Merrill LLP New York, N.Y. AE 216.25 93.75 122.50 75% 288.00 9 NBBJ Seattle, Wash. A 201.84 157.04 44.80 100% 201.84 10 Leo A. Daly Omaha, Neb. AE 114.00 168.15 7.02 100% 175.17 11 Cannon Design Grand Island, N.Y. AE 156.77 123.20 33.57 91% 171.61 12 RTKL Associates Inc. Baltimore, Md. AE 137.99 97.96 40.03 67% 205.95 13 Populous Kansas City, Mo. A 125.70 76.70 49.00 100% 125.70 14 Callison Seattle, Wash. A 119.50 77.00 42.50 100% 119.50 15 SmithGroup Inc. Detroit, Mich. AE 114.70 114.60 0.10 69% 166.30 16 Bechtel San Francisco, Calif. ECA 114.00 41.00 143.00 9% 2159.00 17 ZGF Architects LLP Portland, Ore. A 113.39 109.93 3.46 100% 113.39 18 Perkins Eastman New York, N.Y. A 110.00 88.00 22.00 100% 110.00 19 Fentress Architects Denver, Colo. A 103.92 103.18 0.74 100% 103.92 20 Kohn Pedersen Fox Associates PC New York, N.Y. A 94.33 9.00 85.33 76% 123.56 21 Burt Hill Washington, D.C. AE 88.00 46.00 42.00 70% 126.00 22 Rafael Vinoly Architects PC New York, N.Y. AE 86.81 57.00 29.81 100% 86.81 23 HMC Architects Los Angeles, Calif. A 83.40 82.59 0.81 100% 83.40 24 Ellerbe Becket Inc., an AECOM Co. Minneapolis, Minn. AE 79.40 62.90 16.50 77% 103.60 25 Corgan Associates Inc. Dallas, Texas A 75.60 74.21 1.39 90% 83.76 26 Gresham, Smith and Partners Nashville, Tenn. AE 74.58 72.48 2.10 64% 116.75 27 HNTB Cos. Kansas City, Mo. EA 73.92 73.03 0.89 8% 879.88 28 PBK Architects Houston, Texas A 71.60 71.60 0.00 100% 71.60 29 PageSoutherlandPage Houston, Texas AE 71.53 41.91 29.62 80% 89.50 30 STV Group Inc. New York, N.Y. EA 68.07 68.07 0.00 22% 303.11 31 DLR Group Omaha, Neb. AE 66.20 66.20 0.00 70% 94.60 32 SHW Group Plano, Texas AE 64.30 64.20 0.10 100% 64.30 33 Anshen+Allen Architects San Francisco, Calif. A 62.90 52.40 10.50 100% 62.90 34 Kaplan McLaughlin Diaz San Francisco, Calif. A 62.90 52.60 10.30 100% 62.90 35 TranSystems Corp. Kansas City, Mo. EA 60.48 60.32 0.16 30% 205.00 36 Clark-Nexsen PC Norfolk, Va. AE 58.80 57.80 1.00 79% 74.15 37 Sasaki Associates Inc. Watertown, Mass. A 56.50 44.00 12.50 100% 56.50 38 VOA Associates Inc. Chicago, Ill. A 55.30 50.00 5.30 100% 55.30 39 Birdsall Services Group Sea Girt, N.J. E 55.00 55.00 0.00 100% 55.00 40 Flad Architects Madison, Wis. AE 55.00 53.44 1.56 83% 66.00 41 Hammel Green and Abrahamson Inc. Minneapolis, Minn. AE 53.64 53.45 0.19 55% 97.72 42 KlingStubbins Philadelphia, Pa. AEP 52.90 41.00 11.90 54% 98.00 43 Payette Boston, Mass. A 51.70 44.82 6.88 100% 51.70 44 MulvannyG2 Architecture Bellevue, Wash. A 50.60 42.20 8.40 100% 50.60 45 LPA Inc. Irvine, Calif. A 50.33 50.33 0.00 100% 50.33 46 Reynolds Smith and Hills Inc. Jacksonville, Fla. EA 48.70 48.70 0.00 32% 153.00 47 FKP Architects Inc. Houston, Texas A 48.22 48.22 0.00 100% 48.22 48 WHR Architects Inc. Houston, Texas A 47.50 47.50 0.00 95% 49.80 49 Polshek Partnership Architects LLP New York, N.Y. A 46.81 46.81 0.00 100% 46.81 50 Heery International Inc. Atlanta, Ga. AE 46.31 46.31 0.00 82% 56.33

 

 

Top 250 Firms: 1-50 | 51-100 | 101-150 | 151-200 | 201- 250

 

 

 

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