March 12, 2025 • 42 mins
Sam Rockaway shares his journey from body shop owner to Senior Vice President at Redcom Design and Construction, where they've doubled company size over 14 years to reach $70 million in annual revenue. His team provides vertically integrated design-build solutions with in-house engineering, architecture, and project management capabilities.
• Started with automotive experience before transitioning to construction in 2011
• Redcom was founded in 1982 by Jim Reddington and later led by his son Greg
• Company focuses on industrial buildings, automotive dealerships, and institutional facilities
• Their sales cycle typically spans two years from initial contact to project commencement
• Uses a three-stage sales process tracked through Salesforce CRM
• Implements cutting-edge technology including Procore, Sage, and Matterport 3D scanning
• Offers free feasibility studies, site analysis, and concept work to build client relationships
• New Jersey approval process can take 1-2.5 years and cost up to $1 million
• Multiple regulatory agencies involved include DOT, DEP, soil districts, and local towns
• Company maintains focus on New Jersey market rather than geographic expansion
• Future growth areas include multifamily residential and life sciences facilities
If you're interested in learning more about Redcom Design and Construction or connecting with Sam, find him on LinkedIn or call their office directly.
https://www.redcomllc.com/
To learn more about Tony Johnson and Timeless visit us at:
https://timelessci.com/
https://timelessco.com/
https://www.linkedin.com/in/tonytimeless/
If you would like to discuss investing in Commercial Properties create a profile and schedule a call:
https://timelessci.investnext.com/
Reach out to us directly at:
info@timelessci.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Tony Johnson (00:04):
Welcome to another episode of Timeless Business
and Building Strategies.
Today I have Sam Rockaway.
He's with Redcom Design andConstruction.
Thank you so much for joiningus today, sam.
Sam Rockaway (00:17):
Oh, you're welcome .
Thank you so much for having meVery excited to be here.
Yes, sir.
Tony Johnson (00:21):
So a quick background on yourself, Sam.
So you guys right now arelocated in New Jersey.
Could you kind of give us abackground about yourself and
how you got into construction?
Sam Rockaway (00:46):
and after college.
I owned a body shop for manyyears, for about 15 years, and
while I was owning my body shopI attended college, put myself
through school and then around Iguess the 10th year of owning
the shop, I sold the body shopand then went to Johnson Johnson
to work at corporate, which iswas a complete change and that's
where I really learned how tosell, because I had to deal with
company presidents at theoperating companies and get them
(01:06):
to agree to certain comments onreports, which is very
difficult.
That's not really mypersonality.
So 9-11, I was flying aroundthe world at the time 9-11 had
happened, I was in a tower aweek before and I just decided
to move on to do other things,didn't really have a plan.
I knew cars, I knew automotive,so I sold insurance specifically
(01:29):
to car dealerships for about ayear and that's how I met the
owner of Redcom.
The same day I met him, heasked me if I wanted to work
here in the constructionindustry and I had no idea what
construction really was.
And four years later I said yesto him and it was the best
decision I ever was.
And four years later I said yesto him and it was the best
decision I ever made andprofessionally, I've learned
tremendous a lot.
I've grown and we've doubledthe size of the company in the
(01:53):
last 14 years.
Tony Johnson (01:56):
That's amazing.
Now, all right, so let's kindof go through.
Thank you for that, that'samazing.
So that's a great transition inthere.
So redcom so redcom didn'tstart out as redcom, so let's
kind of walk through there.
So redcom's been around since1982, so could you kind of walk
us through establishment andkind of give us a background on
(02:19):
the company yes, so redcom wasfounded by a person named Jim
Reddington.
Sam Rockaway (02:24):
Jim Reddington has a son, a couple of kids, and
Greg Reddington is one of them.
So Greg is Jim's son and Jimwas running the company doing a
great job.
He had four employees and Gregtook over the company, I think
in 92.
He graduated from Rensselaerwith a degree in structural
engineering.
He worked outside for a littlewhile independently and then
(02:50):
came in and took this over andright away he built it up to
nine about nine or ten employees.
When I got here, there wasabout 12 employees here in 19 in
2011.
So I sold for Greg a little bitbefore I actually took a job
here and then okay, and then.
So that's what we did.
(03:11):
So we have in-house engineering, we have in-house architecture
and we have project managersthat can combine.
We can take a project fromconcept to completion.
And then my role I was taskedwith business development.
Greg really wanted to just bean absentee owner, so Greg spent
two years with me.
I had I sat in his role.
I was tasked with businessdevelopment.
Greg really wanted to just bean absentee owner, so Greg spent
two years with me.
I sat in his office.
I shared an office with him.
Everything he did, I didEverything I did.
(03:32):
He came with me and he's apretty intense guy, so it was
definitely a tough two years.
I was like, oh my God, did Imake a mistake?
But, like I said, I love it andI love Greg and he's been great
to me.
And so Greg, you know, aftertwo years, took off, went down
whatever he did.
He moved to Italy.
(03:53):
He did this, he did that and hewould check in periodically
with us and we then decided tobuild a company by essentially,
just, you know, doing the rightthing for the customers and
going out and seeking newbusiness in the lines that we
were already in.
So Greg had established ourmarkets, which at the time were
institutional, so privateschools and religious facilities
(04:15):
, industrial, so industrialwould cover large industrial
buildings, warehouses, logisticscompanies, light manufacturing,
heavy manufacturing or flexspace and then automotive
dealerships.
And that's what kind ofattracted me, because I
understood that business verywell and we design and build car
(04:37):
dealerships and it's a verycomplex process, it takes a long
time and it involves the brandand it involves the owner and
the brand has one mission andthe owner has another mission
and somehow you have to make itwork.
You know, a car dealership isno different than a franchise
like McDonald's or Burger Kingor something else.
(04:57):
Right, you have to be the samecolor and the same kind of shape
, but the site dictates theshape of the building and what
you can and can't do.
Tony Johnson (05:07):
Absolutely.
So you know something that'sintriguing here.
So there's not everybodyintegrates and so vertically
integrating with any business,you know that it's great when
you can do it.
It's a challenge and you haveto have a lot of business
established to pull in inin-house design engineers for
civil engineering and thenarchitecture.
(05:29):
So it looks like you guys havebuilt long-term relationships.
So one of the good things whenwe talk about car dealerships,
you guys it looks like you dotoyota right dealerships.
So, um, you know you, you getthe, the Toyota dealerships and
then you guys travel aroundprobably and do Toyota, toyota,
toyota.
Once you do the new design,then they have to do refreshes,
(05:53):
like any other franchisebasically.
So then you guys, once you'vedone that initial design, have
the file, you can go help themwith the refresh.
So it's repeat business.
Sam Rockaway (06:03):
Right and the brands come out with new images,
probably every eight to 12years.
And the other interesting factis if a dealership is sold and
there's a lot of sales, thereused to be over 600 rooftops.
We'll call them rooftops, adealer like a point.
Sometimes they're referred toas a point, a shingle or a
rooftop.
It used to be over 600 of themin New Jersey.
(06:24):
Now there's around 500 of themand through consolidation.
So whenever there's a buy andsell transaction for a
dealership, a franchise only newcar, not used car, a new car
dealership the brand looks atthe image of the facility and if
it's not compliant with whattheir expectations are or what
their requirements are, theymost of the time will have that
(06:45):
dealer sign into that contractthat they will get that brand,
that image, upgraded over.
It could vary, so say, one tofour years, something like that,
but they have to commit todoing it.
Tony Johnson (06:58):
Yeah, and that can turn into a lot of money.
So that's a lot of opportunityfor you guys.
And so when you guys wereniched down in this and so
normally the success, and whenyou start to really scale and
build this up and it sounds likewhen Greg took it over from his
father, that's kind of what youguys did you honed in, niched
(07:21):
down and really started to scalewith your sales techniques.
Now not, you know, businessdevelopment one is one thing.
So when you're going out, whatall are you just continuing to
try and pursue and grow thoserelationships?
Do you expand your territory?
How do you go find new clients?
Sam Rockaway (07:42):
So when I first started here, I honestly had no
idea what I was doing.
All I did know was the customeris everything right.
Without a customer, we havenothing, and at the end of the
day, I work for Redcom, so all Ihave is my word.
So those were the two thingsthat drove me, and I had an
(08:03):
architect that has been here atthe time 20 years.
I had the head of constructionand I had our most senior
engineer, site civil engineerand our head estimator.
So let me take a step back Withthose four guys.
When I came here, greg used towork about six or seven months a
year and then he would spendthe rest of the time with his
family.
So he would go out, get someprojects, come back, give them
(08:25):
to everybody and then he wouldgo off and do what he wanted to
do with his family and then,when they were ready to be sold,
greg would jump back in and gosell the deal.
The team that I was given washungry.
Everybody here was hungry forleadership, they were hungry for
work and they had positiveattitudes.
So by me showing up, these fourpeople listened to me.
(08:46):
It was very intimidating for mebecause I didn't know the
difference between a TPO roofand a fully adhered roof.
I had no idea what I wastalking about.
So they came around to all themeetings with me.
They helped me.
I opened the door and they kindof went through the process
until I figured out how to do iton my own.
So I had a great team.
(09:12):
So what did I do?
I just, essentially, I lookedfor associations that we could
be a part of.
So NJ CAR in New Jersey is anautomotive association that we
were a member of at the time.
So I became active in thatassociation.
I became active in theindustrial association and I
became active in the schoolorganization for private schools
, the NJAIS.
And I went and I met with thepresidents, the key KDMs, the
(09:35):
key decision makers, the boardmembers and essentially just
drove around for a year knockingon doors, trying to meet with
people, saying that we're outhere, we can help you, we could
do a concept, we could do a freeconcept.
We could do a site analysis, wecould do a feasibility study at
no cost.
So if you're looking forproperty, call me, I'll help you
.
I'll tell you what your yieldis.
(09:56):
I'll tell you what you can andcan't do on the site.
That's what I did.
Tony Johnson (10:05):
And after a year or so it started to pay
dividends.
Yeah well, yeah, that is a bighelp.
And for you to offer thatservice for free, I'm sure that
was attractive.
You know a lot of.
You know when you get into thedesign build, you really have to
help these people understand.
When they look at a piece ofland, they don't know what it
costs to build it.
You know they don't know any ofthese things.
So when you go in and helpsomebody that can really
establish a relationship, buildtrust and build the sale, and
(10:27):
you know when you're doing itfrom that perspective, you know
you're not normally even havingto go through any bidding
process, so you guys eliminate99% of your competitors once you
do it that route.
Let me ask you, let me ask youthis so when you guys are
finding and you're out searching, do you use a CRM?
(10:48):
Or how do you operate as far askeeping up with new clients,
building on a lead and thenmaintaining the lead, so you
don't lose track of your client?
Sam Rockaway (10:58):
So when, when it was just myself here so when I
first came for the first sixyears, it was just Sam Rockaway
here and the architects andengineers and I used to use a
board you know, like a dry eraseboard for my leads.
And then there were too many ofthem and then I used an Excel
file and then the Excel file wastoo cumbersome and I work with
engineers, so everyone's anengineer here, so they all have
(11:20):
ideas.
So we kind of engineered asales process and we decided to
get a CRM when we use Salesforce, which is probably more than we
need, but we customized it tohave the ability to rank a lead
and we put our sales process.
I meticulously wrote down oursales process.
We have a sales process thatcovers three stages stage one,
(11:43):
stage two and stage three.
A sales process that coversthree stages stage one, stage
two and stage three.
Stage one are prospects that Imainly deal with and I go out,
find, cultivate, bring them inand I put them into our CRM.
I'll make a note to follow upwith them or what have you.
And then there's stage one Ifanybody else in the building
besides me works on the lead, itbecomes a stage two because
(12:03):
they have to track their time.
So the estimator so hey, I needa ballpark.
Hey, I need a concept.
Roberto, can you hand sketch mean elevation?
I'm trying to put a dealtogether.
Can you hand sketch me a floorplan?
So that now is stage two.
So with stage two, our salescycle is about two years.
That's now a stage two.
So a stage two, our sales cycleis about two years.
(12:24):
And a stage two will sit thereuntil we do a proposal.
And after we, if we get theopportunity to do a proposal,
once the proposal is presented,it becomes a stage three.
So really, the professionalsare back at.
Tony Johnson (12:44):
You know the engineers and architects are
back out of it and it's backinto my court.
So you don't touch it throughstage two and then stage three.
Once you the proposal has beensubmitted, then it's for you to
keep up and try and secure theproject.
Sam Rockaway (12:54):
I mean I don't touch it in stage two because
I'm not an architect and I'm notan engineer, but I've been
doing this for so long now.
I will sit down with them andyou know, if I have an idea I'll
share it with them, andsometimes you know 90% of the
time they have all the ideas,but occasionally I do have an
idea.
I mean, architects andengineers are very talented
people.
Tony Johnson (13:16):
Now do you guys?
What softwares do you useconstruction-wise?
Do you incorporate Procore, ordo you have self-work software?
What do you guys work on?
Sam Rockaway (13:30):
No, we use Procore .
We use Sage and Procore for oursoftware, for our finance
software, and we use Bamboo forHR-related.
Tony Johnson (13:42):
Okay, and which Sage operating system you know
they have intact.
Now they have 100 and they have300, which is the old
Timberline.
Sam Rockaway (13:51):
So we have a brand new Sage system.
So I don't know.
Tony Johnson (13:54):
Oh, okay, that's probably, if it's the cloud
based one, it's the intact.
So they're moving a lot.
Sam Rockaway (14:01):
We have a lot of technology here and we've always
been a believer in having thelatest and greatest technology,
whether it's a computer, an iPad, a cell phone or software.
And that's really from Greg.
Tony Johnson (14:17):
Yeah, and it's critical.
Procore is a great projectmanagement software and if your
team, if you can set it systemsin place and your team uses it,
you can use it for safety,project manager, all the reports
, RFIs.
It's a great way and architectslove it, they work with it, so
(14:37):
it's kind of universally adopted, so it's a great software to
work with.
Do you guys incorporate any?
Have you tried to incorporateany AI for automation of any of
these processes to date?
Sam Rockaway (14:52):
Not at this point, but we are looking into it what
we have incorporated justrecently.
So our architects use Revit.
We've gotten away from CAD.
We use Revit and we also use Imay pronounce this right a
Matterport to measure buildings.
(15:12):
So if we want to go out andmeasure or understand the
existing conditions of abuilding, we use what looks like
a survey tool.
It's a Matterport, it's acamera that does a 360 degree
shot of everything in a building.
And now, from what I understand, is that the estimators that'll
(15:33):
give the estimators the takeoffand quantities automatically.
Tony Johnson (15:39):
I was not aware of that, I think.
I thought I think it relates itwith, like a lidar style
technology.
But yeah, that that is awesome.
Yeah, so that is that's a greatlittle tidbit.
I wasn't aware of that.
Um, so, it'll do the littletakeoff piece on it, so all
right.
So, and then, what are, like,some of the bigger challenges
(16:02):
that you guys see in?
Are you guys looking tocontinue to grow to another
level?
Where's the long-term view here?
Sam Rockaway (16:11):
So over the last 14 years we've doubled in size
and it took that long to do this.
So we I don't know ifnecessarily want to grow too
much.
You know we expanded out intoNew York At some point.
We had an office out in LongIsland.
We we have completed projectsin Long Island, like big
(16:33):
projects, ground up, dealershipsand and as such, we've also
done six or seven ground ups inManhattan.
Tony Johnson (16:43):
It's large, with $150 million.
Sam Rockaway (16:46):
And then we've done them in Connecticut, We've
done them in Maryland, We'vedone them in Delaware,
Pennsylvania, so we were up to85 people at one point and it
just got too much.
You know, we're as the crowflies, we're probably 10 miles
from New York and you know, andit's mainly me and I'm saying,
look guys, I'm going to drive bya million people to go out and
(17:09):
try to sell something that's 40miles away and it takes three
hours to get to.
Let's not do that.
Let's just stay here in NewJersey and let's try to just
focus on the 8 million peoplethat live in New Jersey.
And if we can't make it here,we're not going to make it
anywhere.
Tony Johnson (17:28):
That is smart, so could you give an idea?
So what is your guys' annualrevenue as a company right now?
Roughly speaking, 70 million,70 million, and so are you guys
are trying to stay at and aroundthe $70 million mark.
Sam Rockaway (17:44):
Yeah, $60 to $70 is fine.
We're happy with that.
What we're trying to do is bemore efficient in the way we
build.
Let's try to shave some timeoff of projects.
Let's do buyouts better.
Let's be more selective withsome of the projects we take.
We're careful with what we take.
It's a huge commitment to to tosign up a, you know, a 10 or 20
(18:08):
or 30 million dollar project.
You know you're committed tothat person for four years.
Tony Johnson (18:15):
Right and what you guys have created and it's it
sounds like you're in theposition where you can select
that client because you'reexactly right, you select a bad
client.
That's a 20 and 30 minute Imean.
That is, you're basicallymarried to this person for two
to three years of time, so evenmore, and then and then
(18:37):
thereafter Right.
And so you know, when youselect these you have to be very
careful and it's very difficultfor some.
You know you guys are obviouslyvery well established.
So other people that are tryingto get to this level, you know
that's kind of pie in the skyhard to even relate to 20, 30,
(18:59):
$40 million projects.
You know when you're trying tolevel up to those next levels
it's a challenge because youdon't have that experience a lot
of times.
When you got, when you startedand you were selling some of
these things initially, had youguys already been doing the size
projects you were selling orwere you having to guys already
(19:22):
been doing the size projects youwere selling or were you having
to?
You know, help and build.
I mean, if you did 150 milliondollar project, that probably
was a reach right or beyond yourlevel when you were selling.
Were you going beyond yourlevel, and how did you approach
those?
Sam Rockaway (19:33):
so that you're right, that was way beyond our
reach, but that was for a familythat.
So we look for clients thatwant to develop.
We don't look for clients thathave one project and they're
going to go away.
We look for clients like,particularly like in the
automotive industry.
Most auto dealers like say,roger Penske, you know, I don't
know a hundred stores.
You know something like that RayKatina, here in New Jersey,
(19:56):
he's got 20 or 30 stores.
Open Road has 20 or 30 stores.
So we look for those type ofclients where we can really
provide them with the bestlong-term value the free ice,
the free concepts, the freearchitectural schematics,
talking with the brands, sothat's all the value to those
folks.
So that's what we look for.
And then this particular familywe had done we probably done
(20:20):
$10, $15 million a year for thisfamily for 10 years of work.
And they had a project inManhattan and this is how it
came about and only becausewe've been working with them for
10 years.
We were comfortable enoughgetting involved with a
construction management type jobfor $150 million.
(20:41):
And, believe it or not, thatbuilding, that dealership, was
built on top of a FedEx building.
What that couldn't close down.
You know FedEx doesn't closedown, yeah, yeah.
So that was a beast from dayone, but it went well.
It took a couple of years, butit went well.
Would we do it again?
Probably not.
Tony Johnson (20:59):
But it went well.
Sam Rockaway (20:59):
It took a couple years, but it went well.
Would we do it again?
Tony Johnson (21:00):
probably not, but it went well so give me, if you
could in, in all of your years,what do you look at as your
biggest accomplishment that youhave here at redcom I?
Sam Rockaway (21:14):
think my big, my biggest account like.
Without the team that I havehere I'm not any good.
So I got to give a lot ofcredit to the team.
It's definitely my team thathelped me be this successful.
I guess the biggestaccomplishment is we've been
able to keep 50 employees heremaybe 55, you know employed with
(21:36):
health insurance.
They all have families andeverybody's having a life and
growing and you get to see theirfamilies come in and grow and
that's a good feeling.
We don't lay people off becausewe don't have any work.
That's my biggestaccomplishment.
Now, project size I could say Isold a 20 or $30 million, but I
get the most enjoyment atknowing that there's still work
(22:00):
and everyone's got a job.
Tony Johnson (22:02):
That's right.
And, to be clear on this,that's because if you don't have
sales, you don't have anything.
So you are one of the mainfactors in keeping everyone
employed.
So you can't do the operations,you can't show all the
beautiful things if somebodydoesn't sell something right so
nothing happens without, withoutthe sale.
Sam Rockaway (22:22):
That's great yeah, right, so it's very meaningful
to me so what do you guys?
Tony Johnson (22:28):
what are your company's core values?
Do you have that?
Do you have an established corevalues for you guys?
Sam Rockaway (22:34):
yeah, we have core values.
Uh, you know, collaboration isdefinitely one of our core
values.
Fun is a core value.
Vision is a core value that'sawesome.
Tony Johnson (22:47):
Do you guys, when you hire um and I understand
this isn't your department butwhen you guys hire, do you use
any type of um trait surveys orpersonality tests to determine
whether someone would be aproper fit and have those core
values?
Or how do you guys determinethat?
Sam Rockaway (23:06):
Yes, we do.
We do a cultural interview forthem and at the same time we do
a disc assessment.
And the disc assessment wedon't really use as a
personality tool, but we use theDISC assessment to understand
how they naturally work at theirjob and what's their unnatural
(23:27):
work habits.
And then you know we meet themright.
A lot of people meet with theperson it depends on the
position but a lot of peoplemeet with them and get a feel
for it.
And then there's five of us onon a team, uh, there's five
senior uh managers.
I guess we're our titles aresenior vice presidents and we
(23:51):
meet and go over it and try to.
But you know, it's not just dothey have a nice personality,
it's their work, history, theirskill and a lot that goes into
it.
Tony Johnson (24:01):
Okay, do you now with the, when you have 50
people, do you have a trainingprogram on your team or do you
only hire experienced people?
Sam Rockaway (24:14):
So that's it.
So I am responsible for sales,right?
I do not.
I am not responsible forconstruction.
I'm not responsible forestimating.
So we have a constructiondepartment, an engineering
department and we have anestimating department.
So estimating and architectureand engineering go to two
gentlemen.
Hr falls to one person andconstruction falls to one person
(24:38):
.
So I worry about my sales teamyou know, how big is your sales
team?
Tony Johnson (24:46):
I have five people , and how?
How long have they been there?
Like what's your longesttenured employee?
Sam Rockaway (24:58):
uh, three years on the sales team Okay, it's very
difficult to find salespeople.
Tony Johnson (25:05):
Yeah, I was going to say so.
How are they paid?
There's differentconfigurations on the business
development side industry-wise.
Do you guys work on acommission-only basis based on
revenue, volume of sales, or howdo you guys work?
Sam Rockaway (25:24):
No, we don't.
There's no.
You know, if a salesperson heregoes out and sells a job for
whatever it is, for $5 million,there's no commission that they
get out of that.
It's just not, you know some,it's just not conducive for that
.
In this type of, in thisbusiness, there's a bonus
program that everyone is a partof in the company.
That's, you know, driven off ofour, our revenue.
(25:48):
That's how we do it.
The same way, yeah, and some,some do.
Tony Johnson (25:54):
Some do that though.
Some have the businessdevelopment guys.
They pay them one, one and ahalf two percent of revenue.
Yeah, we don't, we don't it's,it's too much.
Sam Rockaway (26:04):
And the other thing is this you can't sell
somebody something for five, tenor twenty million dollars.
It has to be a well thought outdecision that involves a team
of people.
No matter what, you can't sellit to them, it has to work
financially.
Tony Johnson (26:21):
Yep, yeah, and it's typically a lot of
negotiation back and forth andthe disadvantage when you're
doing that is you typicallydon't have control whether the
deal goes or not.
Sam Rockaway (26:31):
Right?
No, it's just.
You know we do a pro forma forevery customer we have, based on
market rents in the area.
So if they're putting anaddition on and they plan to
rent it out, we'll do a proforma for them and we'll look at
rents, that recent rents, andwe'll, this way, that'll tell me
if our price is in line.
(26:53):
It could still be high, but itmay not be too high as long as
the deal pencils and we givethem the payoff times and we
take into consideration all thevariables.
That would go into a pro forma.
I have a dedicated MBA here,working here and that's what she
does.
And she does other things too,but that's one of the things she
does.
Tony Johnson (27:14):
Yeah, that's amazing.
That is a tremendous benefitthat you offer.
Do you guys ever, when you'redoing that, partner in on the
deals?
When you're doing that, hasyour company ever partnered in
with developers on the projects?
Sam Rockaway (27:30):
Yes, so we do two things.
We do construction right,that's our primary source of
revenue but we also buy land.
So we buy land, we get itapproved and then we sell it,
and sometimes, when we buy land,we would buy land with someone
else.
Sometimes we'll do a JV, butsame goal we're going to build
(27:52):
it and we're going to sell it.
Tony Johnson (28:00):
And sometimes we hold it.
So we have a couple that we'reholding and we'll just they're
leased out.
So so what are you?
Where are you guys looking tobe in the next five years?
So you, you, based on whatyou're telling me you're, you're
staying just in the New Jerseyarea, because you've expanded
way out and now you've kind ofpulled it all closer right,
mm-hmm.
So is the goal just to maintainand stay in that realm, or is
(28:28):
there any major pursuits?
You guys are going after Anyadditional automotive industries
that you really have your goalsset on, or do you see a rise in
your industrial division.
Sam Rockaway (28:40):
I think so A couple of questions there.
The industrial division,because the interest rates are
so high.
Tony Johnson (28:48):
I don't know if you.
Sam Rockaway (28:48):
You know you're from North Carolina, I think
right, yes, sir.
Yeah, we're in New Jersey.
So if you drive along the NewJersey Turnpike, over the last
seven years there've beenmillions and millions of square
foot of warehouses built.
Some of them are as large as amillion square feet and some of
them are a hundred thousandsquare feet.
But there's a lot of them Nowand that's because of the
(29:11):
internet, amazons and all the Etransactions that have happened
and continue to happen.
But interest rates, as soon asthey started to go up, the REITs
that generally buy thesefacilities they look at it
differently than us.
You know, if they're, ifthey're square foot prices off
(29:31):
by 50 cents, they're going topause and they're going to wait
unless their basis is good.
So it's just a math problem atthis point for those folks.
And then the users, who the momand pops like the mom and pops
that have a $20 millionwarehouse they're not really mom
and pops, but they're smallcompanies They'll buy 50 to 100,
150,000 square foot buildings.
They're still out there doing itright now, but it's just based
(29:55):
on more like where theiremployees come from and where
their homes are and how longdoes it take them to get to
their office.
On the automotive side, youknow it's driven by brands and
the schools.
They're decimated.
And they're not decimated, butthey're ever since COVID, the
private schools, they're alltrying to get students, so it's
(30:16):
all about how many students theyhave and what type of projects
they want to do.
We're looking to grow and toexpand our residential work and
multifamily.
OK we're looking to acquire moreland and we're looking to get
into into, you know, lifesciences, and that's pretty
(30:38):
broad life science.
Tony Johnson (30:39):
That's like saying yeah, I was going to ask you,
could you expand on that alittle bit?
What specific area in that?
What would that look like?
That's a good question.
Sam Rockaway (30:50):
So we're going through that process now so I
can tell you what we're notgoing to do.
We're not going to try to builda hospital.
We're not going to try to buildanything over 40 million
dollars.
We'll probably have to partnerup with an architect that really
understands that market.
Tony Johnson (31:08):
Yeah, so do you, and you know I haven't heard you
speak much.
Do you work still?
I know you said schoolassistant.
Do you work with any localgovernment?
Do you guys bid any work or isit only design build?
Sam Rockaway (31:22):
No, we do bid work .
We do bid work and during mytenure we used to only sell it
as a design build job.
So if we could not in NewJersey, you need a site approval
to build something, and if youwant me to talk about that, I
can.
It's a very complex process andit takes anywhere from a year
to two and a half years,depending on what outside
(31:45):
agencies are involved.
Tony Johnson (31:46):
I would love you to go through that how you guys
do your feasibility study,through that, if we could get
kind of on a high level forsomebody to understand it.
Sam Rockaway (31:55):
I can, but I'll finish this design build
question.
So we used to only sell designbuild jobs where we took on the
site approval, the architectureand the construction.
But it was very difficult toprice up something that was
going to be built in three years.
So at some point people wouldtake advantage of the concept
free concept work that we did,because this was all for free
(32:17):
until they signed a contract.
So we started to separate outthe engineering and architecture
and just give them consultingagreements.
Right, we're a very competitiveprice.
So we do engineering.
It's not really it's designbuild, but it's engineering with
a separate contract.
So if they're not happy with us, they could walk away Anytime.
We'll give them the plans,architecture with a separate
(32:37):
contract.
But again, if they're not happy, they could stop.
If they just want to use us forarchitecture, they could do
that.
And then, while we're goingthrough the approval process, if
they're happy with us and we'remeeting their expectations and
we're happy with them as aclient, then we'll try to
(32:58):
convert that opportunity into aproject and start talking about
like, all right, what's it goingto actually take to build this
project from a budgetingstandpoint, timing, and have
discussions and move the ballforward.
That's what we, that's what welike to do, and everyone's no
one's handcuffed to anybodyanymore.
Tony Johnson (33:15):
It's just you don't like us, go ahead right
because obviously you know whenyou're going through these
iterations, you're starting witha complete budget and when you
talk at this long timeline thatI would love you to go through a
little bit more.
We're looking at that longtimeline.
You set that initial budget.
The market market is moving,you've got tons of commodities,
everything.
(33:35):
It's like we're going throughnow with tariffs.
You don't know.
This is a moving target.
So the deal might work when youinitially run a budget and then
it doesn't work when you'reeight months down the line.
Sam Rockaway (33:47):
Right.
So I'll talk about the siteapproval process in New Jersey.
So I'm not sure what it is inother states, but I just signed
up a $10 million contract for avery large dealership that
located out of another state.
Because they found us onlineand they sent me an email and
said hey, I'd like you to bidthis project.
So I got on the phone with themand then said great, what's the
(34:09):
status of your approval?
And their answer was whatapproval?
We have permits, which theydidn't have, but we have
building permits.
You can't get a building permitwithout a site approval.
So once I understood that theydidn't have a site approval, I
explained to them what wasneeded and that's how I got the
job.
(34:29):
So in New Jersey, if, if there's, if it's raw land, you
obviously need a site approval.
If it's an existing buildingand you're going to change the
footprint in any way, shape orform, you need a site approval.
Like, even if you just add acanopy, you're going to need
some kind of an approval forthat.
So let's just take a raw pieceof land.
(34:50):
Or you're going to take anaddition, say, at 40 or 50,000
square feet.
It doesn't matter what size itis, it can be 5 million square
feet or 10,000 square feet.
It's the same exact process andit costs about $500,000 to get
through an approval process inNew Jersey, plus the fees at the
end.
So you could spend close to amillion bucks on an approval in
(35:13):
New Jersey.
So you have outside agencies.
You have the local right theend.
So you could spend close to amillion bucks on an approval in
New Jersey.
So you have outside agencies.
You have the local right.
The town that has to approvethe project Does areas zone for
a particular use, and then youcould go for a use change, which
is very challenging.
So we try to just stick withthe current use and work within
the confines of the zoning.
(35:33):
So you have those approvals andthen the outside agencies,
depending on where the facilityis located.
If it's located on a statehighway, you'll need the
Department of Transportation'sapproval.
If it's on a county road,you'll need the county approvals
, you'll need the soil districtapproval and you'll need the
approval from the Department ofEnvironmental Protection.
(35:56):
So if your property is notaffected by any wetlands or
anything DEP related, then youjust need a letter of no
interest right, which will takesix months, but you'll have to
get a biologist to walk the siteand confirm that there's really
no plants or endangered speciesor turtles or anything like
(36:18):
that on the site.
And then you do that.
If it's on a DOT highway, thestate highway, then you're going
to need to get a trafficengineer and understand the trip
generations and what you'redoing, and that could take two
years.
It's taken two and a half years.
That is the critical path.
The DOT in New Jersey is thecritical path to every project.
(36:40):
And then if you have anyairports located near you, you
just you got to get the blessingfrom the FAA, which is pretty
easy, but it's just one moreoutside agency.
And if you're near any rails,any public transportation like
New Jersey Transit and we dohave two projects going on with
that right now you have tonotify the railroad.
(37:02):
You got to be a certaindistance away from it.
If not, there's a process I'mnot too familiar with that
because we don't do too much ofit but you have to notify a
railroad and explain to themwhat you're doing and get a
permit from them.
Tony Johnson (37:17):
And so all of these things are in your first
piece that we're talking aboutwhen you're doing your
consulting agreement.
This is all of the engineering.
So first you're getting all ofthese studies, so they're laying
out the initial site plan, andthen, once they have that
initial site plan, then they'regoing through all of the
different agencies, getting oneto approve, another to approve,
(37:42):
another to approve.
One will give you a commentwait another month, wait another
couple months.
Got to go back.
You know, work on the design,more design, more, uh, and so
these things can take a longtime, and so you have to have a
educated group alongside of youthat knows how to get you
through that process or this,this process that might take you
(38:03):
to what you say six months ayear, two years.
If someone doesn't have thatthat, you can go ahead double
that and they're not gonna.
Sam Rockaway (38:11):
Yeah, they're not.
They really need local people,and then nothing's going to work
and all the stormwatermanagement that goes with it.
They changed the flood hazardregulations, they're changing
the wetland, the DEP rules andregulations again, and you have
(38:32):
to comply with all of that.
Now rules and regulations again, and you have to comply with
all of that.
Now you know, historicallyyou'd be able to put one basin
at the end of the site, on theslow side of the site, and have
all the water drain to thatbasin and then slowly drain out
into the system.
Now they don't want thatanymore.
So now you have to put multiplebasins around the facility and
you have to make sure you haveto prove that through math and
(38:57):
calculations that the engineersdo that that water drains
properly.
And that runs $30 to $40 asquare foot.
Tony Johnson (39:08):
Right, and so this is the biggest challenge that I
see.
They make all of these thingsso unaffordable to do.
You touch a building, youupdate a building, there are so
many regulatory expenses thatleaves very little for the
consumer, the end user, to beable to really select what they
(39:30):
want, because all of the moneygoes to all of the different
regulations that someone has tofulfill and abide by.
And then you're stuck with, youknow, trying to make the money
work for the client while givingthem something that they want,
and that's the biggest challenge, as I see, in construction.
Sam Rockaway (39:48):
Well, when I'm talking to someone and that's
one of the first things I talkabout is the site approval
process we don't give lump sumprices, we give budgets, we give
, say, listen, this is what wethink it's going to cost and
this is why and it's based onthis If town folks come out to
the hearing and you have 100people or 50 people, even just
one person contesting yourproject, you may have to go back
(40:10):
.
You may have to go back andback and back, and we've gone to
some hearings 14 times.
We've gotten denied by townsthat the projects were as of
right, with no variances, andwe're still denied and we're in
court.
Now.
You know I mean this.
Just, it's just very difficultin new jersey.
There's no guarantee thatsomeone's going to get it
(40:31):
approved, even if there's novariances, even if it's as of
right.
It's very risky.
That's why the returns are big.
If you can get a piece of landfor $20 or $30 a foot and you
get it approved, you'll spend amillion dollars, but you'll be
able to triple the value of thatland.
Tony Johnson (40:51):
Yeah, now that is where the rubber meets the road
on development and being able tomake money.
If you can get, if you canunderstand and properly entitled
property, you can create a tonof value because then you can
sell that off to someone andthey can hit the ground running
right.
Then you know, make you knowthey, they have all the
parameters they need to abide byso they know what they're
(41:13):
buying.
It's a lot easier to sell theland because you could be buying
a piece of land that doesn'thave any of those approvals and
don't know what it's worth.
It's just nothing so it createstons and tons of value to bring
that, so that's amazing.
So if people are in your areaand wanted to, you know, work
with you, sam and Redcom.
(41:34):
What is the best way to reachout to you?
Sam Rockaway (41:39):
They can find me on LinkedIn I have a pretty
active profile on LinkedIn orthey can call our office and ask
for me.
Tony Johnson (41:47):
Awesome.
Well, I sincerely appreciateyou coming on today.
It's been very informative.
I think it's been a lot of help.
I sincerely appreciate youcoming on today.
It's been very informative.
I think it's been a lot of helpand I think, if anybody's in
the New Jersey area, you'vedefinitely proven yourself to be
as knowledgeable as possible,and so you know looking to
invest in that area and you'relooking to do anything with
automotive, expand yourautomotive grasp or you know
(42:08):
doing.
It sounds like you've got a lotof industrial build-out already
going there, but you alsoyou're going through land
entitlement or looking for landfor building multifamily.
He'd be a great person to reachout to.
Sam.
I really appreciate you jumpingon with us today.
We've enjoyed having you andspeaking with you.
Sam Rockaway (42:24):
Well, thank you very much.
I appreciate being on the showand thanks for taking the time
out to meet with me.
Tony Johnson (42:28):
Yes, sir, I hope you have a great day.
Sam Rockaway (42:30):
You too.
Tony Johnson (42:31):
Bye.
Welcome to another episode of Timeless Business
and Building Strategies.
Today I have Sam Rockaway.
He's with Redcom Design andConstruction.
Thank you so much for joiningus today, sam.
Sam Rockaway (00:17):
Oh, you're welcome .
Thank you so much for having meVery excited to be here.
Yes, sir.
Tony Johnson (00:21):
So a quick background on yourself, Sam.
So you guys right now arelocated in New Jersey.
Could you kind of give us abackground about yourself and
how you got into construction?
Sam Rockaway (00:46):
and after college.
I owned a body shop for manyyears, for about 15 years, and
while I was owning my body shopI attended college, put myself
through school and then around Iguess the 10th year of owning
the shop, I sold the body shopand then went to Johnson Johnson
to work at corporate, which iswas a complete change and that's
where I really learned how tosell, because I had to deal with
company presidents at theoperating companies and get them
(01:06):
to agree to certain comments onreports, which is very
difficult.
That's not really mypersonality.
So 9-11, I was flying aroundthe world at the time 9-11 had
happened, I was in a tower aweek before and I just decided
to move on to do other things,didn't really have a plan.
I knew cars, I knew automotive,so I sold insurance specifically
(01:29):
to car dealerships for about ayear and that's how I met the
owner of Redcom.
The same day I met him, heasked me if I wanted to work
here in the constructionindustry and I had no idea what
construction really was.
And four years later I said yesto him and it was the best
decision I ever was.
And four years later I said yesto him and it was the best
decision I ever made andprofessionally, I've learned
tremendous a lot.
I've grown and we've doubledthe size of the company in the
(01:53):
last 14 years.
Tony Johnson (01:56):
That's amazing.
Now, all right, so let's kindof go through.
Thank you for that, that'samazing.
So that's a great transition inthere.
So redcom so redcom didn'tstart out as redcom, so let's
kind of walk through there.
So redcom's been around since1982, so could you kind of walk
us through establishment andkind of give us a background on
(02:19):
the company yes, so redcom wasfounded by a person named Jim
Reddington.
Sam Rockaway (02:24):
Jim Reddington has a son, a couple of kids, and
Greg Reddington is one of them.
So Greg is Jim's son and Jimwas running the company doing a
great job.
He had four employees and Gregtook over the company, I think
in 92.
He graduated from Rensselaerwith a degree in structural
engineering.
He worked outside for a littlewhile independently and then
(02:50):
came in and took this over andright away he built it up to
nine about nine or ten employees.
When I got here, there wasabout 12 employees here in 19 in
2011.
So I sold for Greg a little bitbefore I actually took a job
here and then okay, and then.
So that's what we did.
(03:11):
So we have in-house engineering, we have in-house architecture
and we have project managersthat can combine.
We can take a project fromconcept to completion.
And then my role I was taskedwith business development.
Greg really wanted to just bean absentee owner, so Greg spent
two years with me.
I had I sat in his role.
I was tasked with businessdevelopment.
Greg really wanted to just bean absentee owner, so Greg spent
two years with me.
I sat in his office.
I shared an office with him.
Everything he did, I didEverything I did.
(03:32):
He came with me and he's apretty intense guy, so it was
definitely a tough two years.
I was like, oh my God, did Imake a mistake?
But, like I said, I love it andI love Greg and he's been great
to me.
And so Greg, you know, aftertwo years, took off, went down
whatever he did.
He moved to Italy.
(03:53):
He did this, he did that and hewould check in periodically
with us and we then decided tobuild a company by essentially,
just, you know, doing the rightthing for the customers and
going out and seeking newbusiness in the lines that we
were already in.
So Greg had established ourmarkets, which at the time were
institutional, so privateschools and religious facilities
(04:15):
, industrial, so industrialwould cover large industrial
buildings, warehouses, logisticscompanies, light manufacturing,
heavy manufacturing or flexspace and then automotive
dealerships.
And that's what kind ofattracted me, because I
understood that business verywell and we design and build car
(04:37):
dealerships and it's a verycomplex process, it takes a long
time and it involves the brandand it involves the owner and
the brand has one mission andthe owner has another mission
and somehow you have to make itwork.
You know, a car dealership isno different than a franchise
like McDonald's or Burger Kingor something else.
(04:57):
Right, you have to be the samecolor and the same kind of shape
, but the site dictates theshape of the building and what
you can and can't do.
Tony Johnson (05:07):
Absolutely.
So you know something that'sintriguing here.
So there's not everybodyintegrates and so vertically
integrating with any business,you know that it's great when
you can do it.
It's a challenge and you haveto have a lot of business
established to pull in inin-house design engineers for
civil engineering and thenarchitecture.
(05:29):
So it looks like you guys havebuilt long-term relationships.
So one of the good things whenwe talk about car dealerships,
you guys it looks like you dotoyota right dealerships.
So, um, you know you, you getthe, the Toyota dealerships and
then you guys travel aroundprobably and do Toyota, toyota,
toyota.
Once you do the new design,then they have to do refreshes,
(05:53):
like any other franchisebasically.
So then you guys, once you'vedone that initial design, have
the file, you can go help themwith the refresh.
So it's repeat business.
Sam Rockaway (06:03):
Right and the brands come out with new images,
probably every eight to 12years.
And the other interesting factis if a dealership is sold and
there's a lot of sales, thereused to be over 600 rooftops.
We'll call them rooftops, adealer like a point.
Sometimes they're referred toas a point, a shingle or a
rooftop.
It used to be over 600 of themin New Jersey.
(06:24):
Now there's around 500 of themand through consolidation.
So whenever there's a buy andsell transaction for a
dealership, a franchise only newcar, not used car, a new car
dealership the brand looks atthe image of the facility and if
it's not compliant with whattheir expectations are or what
their requirements are, theymost of the time will have that
(06:45):
dealer sign into that contractthat they will get that brand,
that image, upgraded over.
It could vary, so say, one tofour years, something like that,
but they have to commit todoing it.
Tony Johnson (06:58):
Yeah, and that can turn into a lot of money.
So that's a lot of opportunityfor you guys.
And so when you guys wereniched down in this and so
normally the success, and whenyou start to really scale and
build this up and it sounds likewhen Greg took it over from his
father, that's kind of what youguys did you honed in, niched
(07:21):
down and really started to scalewith your sales techniques.
Now not, you know, businessdevelopment one is one thing.
So when you're going out, whatall are you just continuing to
try and pursue and grow thoserelationships?
Do you expand your territory?
How do you go find new clients?
Sam Rockaway (07:42):
So when I first started here, I honestly had no
idea what I was doing.
All I did know was the customeris everything right.
Without a customer, we havenothing, and at the end of the
day, I work for Redcom, so all Ihave is my word.
So those were the two thingsthat drove me, and I had an
(08:03):
architect that has been here atthe time 20 years.
I had the head of constructionand I had our most senior
engineer, site civil engineerand our head estimator.
So let me take a step back Withthose four guys.
When I came here, greg used towork about six or seven months a
year and then he would spendthe rest of the time with his
family.
So he would go out, get someprojects, come back, give them
(08:25):
to everybody and then he wouldgo off and do what he wanted to
do with his family and then,when they were ready to be sold,
greg would jump back in and gosell the deal.
The team that I was given washungry.
Everybody here was hungry forleadership, they were hungry for
work and they had positiveattitudes.
So by me showing up, these fourpeople listened to me.
(08:46):
It was very intimidating for mebecause I didn't know the
difference between a TPO roofand a fully adhered roof.
I had no idea what I wastalking about.
So they came around to all themeetings with me.
They helped me.
I opened the door and they kindof went through the process
until I figured out how to do iton my own.
So I had a great team.
(09:12):
So what did I do?
I just, essentially, I lookedfor associations that we could
be a part of.
So NJ CAR in New Jersey is anautomotive association that we
were a member of at the time.
So I became active in thatassociation.
I became active in theindustrial association and I
became active in the schoolorganization for private schools
, the NJAIS.
And I went and I met with thepresidents, the key KDMs, the
(09:35):
key decision makers, the boardmembers and essentially just
drove around for a year knockingon doors, trying to meet with
people, saying that we're outhere, we can help you, we could
do a concept, we could do a freeconcept.
We could do a site analysis, wecould do a feasibility study at
no cost.
So if you're looking forproperty, call me, I'll help you
.
I'll tell you what your yieldis.
(09:56):
I'll tell you what you can andcan't do on the site.
That's what I did.
Tony Johnson (10:05):
And after a year or so it started to pay
dividends.
Yeah well, yeah, that is a bighelp.
And for you to offer thatservice for free, I'm sure that
was attractive.
You know a lot of.
You know when you get into thedesign build, you really have to
help these people understand.
When they look at a piece ofland, they don't know what it
costs to build it.
You know they don't know any ofthese things.
So when you go in and helpsomebody that can really
establish a relationship, buildtrust and build the sale, and
(10:27):
you know when you're doing itfrom that perspective, you know
you're not normally even havingto go through any bidding
process, so you guys eliminate99% of your competitors once you
do it that route.
Let me ask you, let me ask youthis so when you guys are
finding and you're out searching, do you use a CRM?
(10:48):
Or how do you operate as far askeeping up with new clients,
building on a lead and thenmaintaining the lead, so you
don't lose track of your client?
Sam Rockaway (10:58):
So when, when it was just myself here so when I
first came for the first sixyears, it was just Sam Rockaway
here and the architects andengineers and I used to use a
board you know, like a dry eraseboard for my leads.
And then there were too many ofthem and then I used an Excel
file and then the Excel file wastoo cumbersome and I work with
engineers, so everyone's anengineer here, so they all have
(11:20):
ideas.
So we kind of engineered asales process and we decided to
get a CRM when we use Salesforce, which is probably more than we
need, but we customized it tohave the ability to rank a lead
and we put our sales process.
I meticulously wrote down oursales process.
We have a sales process thatcovers three stages stage one,
(11:43):
stage two and stage three.
A sales process that coversthree stages stage one, stage
two and stage three.
Stage one are prospects that Imainly deal with and I go out,
find, cultivate, bring them inand I put them into our CRM.
I'll make a note to follow upwith them or what have you.
And then there's stage one Ifanybody else in the building
besides me works on the lead, itbecomes a stage two because
(12:03):
they have to track their time.
So the estimator so hey, I needa ballpark.
Hey, I need a concept.
Roberto, can you hand sketch mean elevation?
I'm trying to put a dealtogether.
Can you hand sketch me a floorplan?
So that now is stage two.
So with stage two, our salescycle is about two years.
That's now a stage two.
So a stage two, our sales cycleis about two years.
(12:24):
And a stage two will sit thereuntil we do a proposal.
And after we, if we get theopportunity to do a proposal,
once the proposal is presented,it becomes a stage three.
So really, the professionalsare back at.
Tony Johnson (12:44):
You know the engineers and architects are
back out of it and it's backinto my court.
So you don't touch it throughstage two and then stage three.
Once you the proposal has beensubmitted, then it's for you to
keep up and try and secure theproject.
Sam Rockaway (12:54):
I mean I don't touch it in stage two because
I'm not an architect and I'm notan engineer, but I've been
doing this for so long now.
I will sit down with them andyou know, if I have an idea I'll
share it with them, andsometimes you know 90% of the
time they have all the ideas,but occasionally I do have an
idea.
I mean, architects andengineers are very talented
people.
Tony Johnson (13:16):
Now do you guys?
What softwares do you useconstruction-wise?
Do you incorporate Procore, ordo you have self-work software?
What do you guys work on?
Sam Rockaway (13:30):
No, we use Procore .
We use Sage and Procore for oursoftware, for our finance
software, and we use Bamboo forHR-related.
Tony Johnson (13:42):
Okay, and which Sage operating system you know
they have intact.
Now they have 100 and they have300, which is the old
Timberline.
Sam Rockaway (13:51):
So we have a brand new Sage system.
So I don't know.
Tony Johnson (13:54):
Oh, okay, that's probably, if it's the cloud
based one, it's the intact.
So they're moving a lot.
Sam Rockaway (14:01):
We have a lot of technology here and we've always
been a believer in having thelatest and greatest technology,
whether it's a computer, an iPad, a cell phone or software.
And that's really from Greg.
Tony Johnson (14:17):
Yeah, and it's critical.
Procore is a great projectmanagement software and if your
team, if you can set it systemsin place and your team uses it,
you can use it for safety,project manager, all the reports
, RFIs.
It's a great way and architectslove it, they work with it, so
(14:37):
it's kind of universally adopted, so it's a great software to
work with.
Do you guys incorporate any?
Have you tried to incorporateany AI for automation of any of
these processes to date?
Sam Rockaway (14:52):
Not at this point, but we are looking into it what
we have incorporated justrecently.
So our architects use Revit.
We've gotten away from CAD.
We use Revit and we also use Imay pronounce this right a
Matterport to measure buildings.
(15:12):
So if we want to go out andmeasure or understand the
existing conditions of abuilding, we use what looks like
a survey tool.
It's a Matterport, it's acamera that does a 360 degree
shot of everything in a building.
And now, from what I understand, is that the estimators that'll
(15:33):
give the estimators the takeoffand quantities automatically.
Tony Johnson (15:39):
I was not aware of that, I think.
I thought I think it relates itwith, like a lidar style
technology.
But yeah, that that is awesome.
Yeah, so that is that's a greatlittle tidbit.
I wasn't aware of that.
Um, so, it'll do the littletakeoff piece on it, so all
right.
So, and then, what are, like,some of the bigger challenges
(16:02):
that you guys see in?
Are you guys looking tocontinue to grow to another
level?
Where's the long-term view here?
Sam Rockaway (16:11):
So over the last 14 years we've doubled in size
and it took that long to do this.
So we I don't know ifnecessarily want to grow too
much.
You know we expanded out intoNew York At some point.
We had an office out in LongIsland.
We we have completed projectsin Long Island, like big
(16:33):
projects, ground up, dealershipsand and as such, we've also
done six or seven ground ups inManhattan.
Tony Johnson (16:43):
It's large, with $150 million.
Sam Rockaway (16:46):
And then we've done them in Connecticut, We've
done them in Maryland, We'vedone them in Delaware,
Pennsylvania, so we were up to85 people at one point and it
just got too much.
You know, we're as the crowflies, we're probably 10 miles
from New York and you know, andit's mainly me and I'm saying,
look guys, I'm going to drive bya million people to go out and
(17:09):
try to sell something that's 40miles away and it takes three
hours to get to.
Let's not do that.
Let's just stay here in NewJersey and let's try to just
focus on the 8 million peoplethat live in New Jersey.
And if we can't make it here,we're not going to make it
anywhere.
Tony Johnson (17:28):
That is smart, so could you give an idea?
So what is your guys' annualrevenue as a company right now?
Roughly speaking, 70 million,70 million, and so are you guys
are trying to stay at and aroundthe $70 million mark.
Sam Rockaway (17:44):
Yeah, $60 to $70 is fine.
We're happy with that.
What we're trying to do is bemore efficient in the way we
build.
Let's try to shave some timeoff of projects.
Let's do buyouts better.
Let's be more selective withsome of the projects we take.
We're careful with what we take.
It's a huge commitment to to tosign up a, you know, a 10 or 20
(18:08):
or 30 million dollar project.
You know you're committed tothat person for four years.
Tony Johnson (18:15):
Right and what you guys have created and it's it
sounds like you're in theposition where you can select
that client because you'reexactly right, you select a bad
client.
That's a 20 and 30 minute Imean.
That is, you're basicallymarried to this person for two
to three years of time, so evenmore, and then and then
(18:37):
thereafter Right.
And so you know, when youselect these you have to be very
careful and it's very difficultfor some.
You know you guys are obviouslyvery well established.
So other people that are tryingto get to this level, you know
that's kind of pie in the skyhard to even relate to 20, 30,
(18:59):
$40 million projects.
You know when you're trying tolevel up to those next levels
it's a challenge because youdon't have that experience a lot
of times.
When you got, when you startedand you were selling some of
these things initially, had youguys already been doing the size
projects you were selling orwere you having to guys already
(19:22):
been doing the size projects youwere selling or were you having
to?
You know, help and build.
I mean, if you did 150 milliondollar project, that probably
was a reach right or beyond yourlevel when you were selling.
Were you going beyond yourlevel, and how did you approach
those?
Sam Rockaway (19:33):
so that you're right, that was way beyond our
reach, but that was for a familythat.
So we look for clients thatwant to develop.
We don't look for clients thathave one project and they're
going to go away.
We look for clients like,particularly like in the
automotive industry.
Most auto dealers like say,roger Penske, you know, I don't
know a hundred stores.
You know something like that RayKatina, here in New Jersey,
(19:56):
he's got 20 or 30 stores.
Open Road has 20 or 30 stores.
So we look for those type ofclients where we can really
provide them with the bestlong-term value the free ice,
the free concepts, the freearchitectural schematics,
talking with the brands, sothat's all the value to those
folks.
So that's what we look for.
And then this particular familywe had done we probably done
(20:20):
$10, $15 million a year for thisfamily for 10 years of work.
And they had a project inManhattan and this is how it
came about and only becausewe've been working with them for
10 years.
We were comfortable enoughgetting involved with a
construction management type jobfor $150 million.
(20:41):
And, believe it or not, thatbuilding, that dealership, was
built on top of a FedEx building.
What that couldn't close down.
You know FedEx doesn't closedown, yeah, yeah.
So that was a beast from dayone, but it went well.
It took a couple of years, butit went well.
Would we do it again?
Probably not.
Tony Johnson (20:59):
But it went well.
Sam Rockaway (20:59):
It took a couple years, but it went well.
Would we do it again?
Tony Johnson (21:00):
probably not, but it went well so give me, if you
could in, in all of your years,what do you look at as your
biggest accomplishment that youhave here at redcom I?
Sam Rockaway (21:14):
think my big, my biggest account like.
Without the team that I havehere I'm not any good.
So I got to give a lot ofcredit to the team.
It's definitely my team thathelped me be this successful.
I guess the biggestaccomplishment is we've been
able to keep 50 employees heremaybe 55, you know employed with
(21:36):
health insurance.
They all have families andeverybody's having a life and
growing and you get to see theirfamilies come in and grow and
that's a good feeling.
We don't lay people off becausewe don't have any work.
That's my biggestaccomplishment.
Now, project size I could say Isold a 20 or $30 million, but I
get the most enjoyment atknowing that there's still work
(22:00):
and everyone's got a job.
Tony Johnson (22:02):
That's right.
And, to be clear on this,that's because if you don't have
sales, you don't have anything.
So you are one of the mainfactors in keeping everyone
employed.
So you can't do the operations,you can't show all the
beautiful things if somebodydoesn't sell something right so
nothing happens without, withoutthe sale.
Sam Rockaway (22:22):
That's great yeah, right, so it's very meaningful
to me so what do you guys?
Tony Johnson (22:28):
what are your company's core values?
Do you have that?
Do you have an established corevalues for you guys?
Sam Rockaway (22:34):
yeah, we have core values.
Uh, you know, collaboration isdefinitely one of our core
values.
Fun is a core value.
Vision is a core value that'sawesome.
Tony Johnson (22:47):
Do you guys, when you hire um and I understand
this isn't your department butwhen you guys hire, do you use
any type of um trait surveys orpersonality tests to determine
whether someone would be aproper fit and have those core
values?
Or how do you guys determinethat?
Sam Rockaway (23:06):
Yes, we do.
We do a cultural interview forthem and at the same time we do
a disc assessment.
And the disc assessment wedon't really use as a
personality tool, but we use theDISC assessment to understand
how they naturally work at theirjob and what's their unnatural
(23:27):
work habits.
And then you know we meet themright.
A lot of people meet with theperson it depends on the
position but a lot of peoplemeet with them and get a feel
for it.
And then there's five of us onon a team, uh, there's five
senior uh managers.
I guess we're our titles aresenior vice presidents and we
(23:51):
meet and go over it and try to.
But you know, it's not just dothey have a nice personality,
it's their work, history, theirskill and a lot that goes into
it.
Tony Johnson (24:01):
Okay, do you now with the, when you have 50
people, do you have a trainingprogram on your team or do you
only hire experienced people?
Sam Rockaway (24:14):
So that's it.
So I am responsible for sales,right?
I do not.
I am not responsible forconstruction.
I'm not responsible forestimating.
So we have a constructiondepartment, an engineering
department and we have anestimating department.
So estimating and architectureand engineering go to two
gentlemen.
Hr falls to one person andconstruction falls to one person
(24:38):
.
So I worry about my sales teamyou know, how big is your sales
team?
Tony Johnson (24:46):
I have five people , and how?
How long have they been there?
Like what's your longesttenured employee?
Sam Rockaway (24:58):
uh, three years on the sales team Okay, it's very
difficult to find salespeople.
Tony Johnson (25:05):
Yeah, I was going to say so.
How are they paid?
There's differentconfigurations on the business
development side industry-wise.
Do you guys work on acommission-only basis based on
revenue, volume of sales, or howdo you guys work?
Sam Rockaway (25:24):
No, we don't.
There's no.
You know, if a salesperson heregoes out and sells a job for
whatever it is, for $5 million,there's no commission that they
get out of that.
It's just not, you know some,it's just not conducive for that
.
In this type of, in thisbusiness, there's a bonus
program that everyone is a partof in the company.
That's, you know, driven off ofour, our revenue.
(25:48):
That's how we do it.
The same way, yeah, and some,some do.
Tony Johnson (25:54):
Some do that though.
Some have the businessdevelopment guys.
They pay them one, one and ahalf two percent of revenue.
Yeah, we don't, we don't it's,it's too much.
Sam Rockaway (26:04):
And the other thing is this you can't sell
somebody something for five, tenor twenty million dollars.
It has to be a well thought outdecision that involves a team
of people.
No matter what, you can't sellit to them, it has to work
financially.
Tony Johnson (26:21):
Yep, yeah, and it's typically a lot of
negotiation back and forth andthe disadvantage when you're
doing that is you typicallydon't have control whether the
deal goes or not.
Sam Rockaway (26:31):
Right?
No, it's just.
You know we do a pro forma forevery customer we have, based on
market rents in the area.
So if they're putting anaddition on and they plan to
rent it out, we'll do a proforma for them and we'll look at
rents, that recent rents, andwe'll, this way, that'll tell me
if our price is in line.
(26:53):
It could still be high, but itmay not be too high as long as
the deal pencils and we givethem the payoff times and we
take into consideration all thevariables.
That would go into a pro forma.
I have a dedicated MBA here,working here and that's what she
does.
And she does other things too,but that's one of the things she
does.
Tony Johnson (27:14):
Yeah, that's amazing.
That is a tremendous benefitthat you offer.
Do you guys ever, when you'redoing that, partner in on the
deals?
When you're doing that, hasyour company ever partnered in
with developers on the projects?
Sam Rockaway (27:30):
Yes, so we do two things.
We do construction right,that's our primary source of
revenue but we also buy land.
So we buy land, we get itapproved and then we sell it,
and sometimes, when we buy land,we would buy land with someone
else.
Sometimes we'll do a JV, butsame goal we're going to build
(27:52):
it and we're going to sell it.
Tony Johnson (28:00):
And sometimes we hold it.
So we have a couple that we'reholding and we'll just they're
leased out.
So so what are you?
Where are you guys looking tobe in the next five years?
So you, you, based on whatyou're telling me you're, you're
staying just in the New Jerseyarea, because you've expanded
way out and now you've kind ofpulled it all closer right,
mm-hmm.
So is the goal just to maintainand stay in that realm, or is
(28:28):
there any major pursuits?
You guys are going after Anyadditional automotive industries
that you really have your goalsset on, or do you see a rise in
your industrial division.
Sam Rockaway (28:40):
I think so A couple of questions there.
The industrial division,because the interest rates are
so high.
Tony Johnson (28:48):
I don't know if you.
Sam Rockaway (28:48):
You know you're from North Carolina, I think
right, yes, sir.
Yeah, we're in New Jersey.
So if you drive along the NewJersey Turnpike, over the last
seven years there've beenmillions and millions of square
foot of warehouses built.
Some of them are as large as amillion square feet and some of
them are a hundred thousandsquare feet.
But there's a lot of them Nowand that's because of the
(29:11):
internet, amazons and all the Etransactions that have happened
and continue to happen.
But interest rates, as soon asthey started to go up, the REITs
that generally buy thesefacilities they look at it
differently than us.
You know, if they're, ifthey're square foot prices off
(29:31):
by 50 cents, they're going topause and they're going to wait
unless their basis is good.
So it's just a math problem atthis point for those folks.
And then the users, who the momand pops like the mom and pops
that have a $20 millionwarehouse they're not really mom
and pops, but they're smallcompanies They'll buy 50 to 100,
150,000 square foot buildings.
They're still out there doing itright now, but it's just based
(29:55):
on more like where theiremployees come from and where
their homes are and how longdoes it take them to get to
their office.
On the automotive side, youknow it's driven by brands and
the schools.
They're decimated.
And they're not decimated, butthey're ever since COVID, the
private schools, they're alltrying to get students, so it's
(30:16):
all about how many students theyhave and what type of projects
they want to do.
We're looking to grow and toexpand our residential work and
multifamily.
OK we're looking to acquire moreland and we're looking to get
into into, you know, lifesciences, and that's pretty
(30:38):
broad life science.
Tony Johnson (30:39):
That's like saying yeah, I was going to ask you,
could you expand on that alittle bit?
What specific area in that?
What would that look like?
That's a good question.
Sam Rockaway (30:50):
So we're going through that process now so I
can tell you what we're notgoing to do.
We're not going to try to builda hospital.
We're not going to try to buildanything over 40 million
dollars.
We'll probably have to partnerup with an architect that really
understands that market.
Tony Johnson (31:08):
Yeah, so do you, and you know I haven't heard you
speak much.
Do you work still?
I know you said schoolassistant.
Do you work with any localgovernment?
Do you guys bid any work or isit only design build?
Sam Rockaway (31:22):
No, we do bid work .
We do bid work and during mytenure we used to only sell it
as a design build job.
So if we could not in NewJersey, you need a site approval
to build something, and if youwant me to talk about that, I
can.
It's a very complex process andit takes anywhere from a year
to two and a half years,depending on what outside
(31:45):
agencies are involved.
Tony Johnson (31:46):
I would love you to go through that how you guys
do your feasibility study,through that, if we could get
kind of on a high level forsomebody to understand it.
Sam Rockaway (31:55):
I can, but I'll finish this design build
question.
So we used to only sell designbuild jobs where we took on the
site approval, the architectureand the construction.
But it was very difficult toprice up something that was
going to be built in three years.
So at some point people wouldtake advantage of the concept
free concept work that we did,because this was all for free
(32:17):
until they signed a contract.
So we started to separate outthe engineering and architecture
and just give them consultingagreements.
Right, we're a very competitiveprice.
So we do engineering.
It's not really it's designbuild, but it's engineering with
a separate contract.
So if they're not happy with us, they could walk away Anytime.
We'll give them the plans,architecture with a separate
(32:37):
contract.
But again, if they're not happy, they could stop.
If they just want to use us forarchitecture, they could do
that.
And then, while we're goingthrough the approval process, if
they're happy with us and we'remeeting their expectations and
we're happy with them as aclient, then we'll try to
(32:58):
convert that opportunity into aproject and start talking about
like, all right, what's it goingto actually take to build this
project from a budgetingstandpoint, timing, and have
discussions and move the ballforward.
That's what we, that's what welike to do, and everyone's no
one's handcuffed to anybodyanymore.
Tony Johnson (33:15):
It's just you don't like us, go ahead right
because obviously you know whenyou're going through these
iterations, you're starting witha complete budget and when you
talk at this long timeline thatI would love you to go through a
little bit more.
We're looking at that longtimeline.
You set that initial budget.
The market market is moving,you've got tons of commodities,
everything.
(33:35):
It's like we're going throughnow with tariffs.
You don't know.
This is a moving target.
So the deal might work when youinitially run a budget and then
it doesn't work when you'reeight months down the line.
Sam Rockaway (33:47):
Right.
So I'll talk about the siteapproval process in New Jersey.
So I'm not sure what it is inother states, but I just signed
up a $10 million contract for avery large dealership that
located out of another state.
Because they found us onlineand they sent me an email and
said hey, I'd like you to bidthis project.
So I got on the phone with themand then said great, what's the
(34:09):
status of your approval?
And their answer was whatapproval?
We have permits, which theydidn't have, but we have
building permits.
You can't get a building permitwithout a site approval.
So once I understood that theydidn't have a site approval, I
explained to them what wasneeded and that's how I got the
job.
(34:29):
So in New Jersey, if, if there's, if it's raw land, you
obviously need a site approval.
If it's an existing buildingand you're going to change the
footprint in any way, shape orform, you need a site approval.
Like, even if you just add acanopy, you're going to need
some kind of an approval forthat.
So let's just take a raw pieceof land.
(34:50):
Or you're going to take anaddition, say, at 40 or 50,000
square feet.
It doesn't matter what size itis, it can be 5 million square
feet or 10,000 square feet.
It's the same exact process andit costs about $500,000 to get
through an approval process inNew Jersey, plus the fees at the
end.
So you could spend close to amillion bucks on an approval in
(35:13):
New Jersey.
So you have outside agencies.
You have the local right theend.
So you could spend close to amillion bucks on an approval in
New Jersey.
So you have outside agencies.
You have the local right.
The town that has to approvethe project Does areas zone for
a particular use, and then youcould go for a use change, which
is very challenging.
So we try to just stick withthe current use and work within
the confines of the zoning.
(35:33):
So you have those approvals andthen the outside agencies,
depending on where the facilityis located.
If it's located on a statehighway, you'll need the
Department of Transportation'sapproval.
If it's on a county road,you'll need the county approvals
, you'll need the soil districtapproval and you'll need the
approval from the Department ofEnvironmental Protection.
(35:56):
So if your property is notaffected by any wetlands or
anything DEP related, then youjust need a letter of no
interest right, which will takesix months, but you'll have to
get a biologist to walk the siteand confirm that there's really
no plants or endangered speciesor turtles or anything like
(36:18):
that on the site.
And then you do that.
If it's on a DOT highway, thestate highway, then you're going
to need to get a trafficengineer and understand the trip
generations and what you'redoing, and that could take two
years.
It's taken two and a half years.
That is the critical path.
The DOT in New Jersey is thecritical path to every project.
(36:40):
And then if you have anyairports located near you, you
just you got to get the blessingfrom the FAA, which is pretty
easy, but it's just one moreoutside agency.
And if you're near any rails,any public transportation like
New Jersey Transit and we dohave two projects going on with
that right now you have tonotify the railroad.
(37:02):
You got to be a certaindistance away from it.
If not, there's a process I'mnot too familiar with that
because we don't do too much ofit but you have to notify a
railroad and explain to themwhat you're doing and get a
permit from them.
Tony Johnson (37:17):
And so all of these things are in your first
piece that we're talking aboutwhen you're doing your
consulting agreement.
This is all of the engineering.
So first you're getting all ofthese studies, so they're laying
out the initial site plan, andthen, once they have that
initial site plan, then they'regoing through all of the
different agencies, getting oneto approve, another to approve,
(37:42):
another to approve.
One will give you a commentwait another month, wait another
couple months.
Got to go back.
You know, work on the design,more design, more, uh, and so
these things can take a longtime, and so you have to have a
educated group alongside of youthat knows how to get you
through that process or this,this process that might take you
(38:03):
to what you say six months ayear, two years.
If someone doesn't have thatthat, you can go ahead double
that and they're not gonna.
Sam Rockaway (38:11):
Yeah, they're not.
They really need local people,and then nothing's going to work
and all the stormwatermanagement that goes with it.
They changed the flood hazardregulations, they're changing
the wetland, the DEP rules andregulations again, and you have
(38:32):
to comply with all of that.
Now rules and regulations again, and you have to comply with
all of that.
Now you know, historicallyyou'd be able to put one basin
at the end of the site, on theslow side of the site, and have
all the water drain to thatbasin and then slowly drain out
into the system.
Now they don't want thatanymore.
So now you have to put multiplebasins around the facility and
you have to make sure you haveto prove that through math and
(38:57):
calculations that the engineersdo that that water drains
properly.
And that runs $30 to $40 asquare foot.
Tony Johnson (39:08):
Right, and so this is the biggest challenge that I
see.
They make all of these thingsso unaffordable to do.
You touch a building, youupdate a building, there are so
many regulatory expenses thatleaves very little for the
consumer, the end user, to beable to really select what they
(39:30):
want, because all of the moneygoes to all of the different
regulations that someone has tofulfill and abide by.
And then you're stuck with, youknow, trying to make the money
work for the client while givingthem something that they want,
and that's the biggest challenge, as I see, in construction.
Sam Rockaway (39:48):
Well, when I'm talking to someone and that's
one of the first things I talkabout is the site approval
process we don't give lump sumprices, we give budgets, we give
, say, listen, this is what wethink it's going to cost and
this is why and it's based onthis If town folks come out to
the hearing and you have 100people or 50 people, even just
one person contesting yourproject, you may have to go back
(40:10):
.
You may have to go back andback and back, and we've gone to
some hearings 14 times.
We've gotten denied by townsthat the projects were as of
right, with no variances, andwe're still denied and we're in
court.
Now.
You know I mean this.
Just, it's just very difficultin new jersey.
There's no guarantee thatsomeone's going to get it
(40:31):
approved, even if there's novariances, even if it's as of
right.
It's very risky.
That's why the returns are big.
If you can get a piece of landfor $20 or $30 a foot and you
get it approved, you'll spend amillion dollars, but you'll be
able to triple the value of thatland.
Tony Johnson (40:51):
Yeah, now that is where the rubber meets the road
on development and being able tomake money.
If you can get, if you canunderstand and properly entitled
property, you can create a tonof value because then you can
sell that off to someone andthey can hit the ground running
right.
Then you know, make you knowthey, they have all the
parameters they need to abide byso they know what they're
(41:13):
buying.
It's a lot easier to sell theland because you could be buying
a piece of land that doesn'thave any of those approvals and
don't know what it's worth.
It's just nothing so it createstons and tons of value to bring
that, so that's amazing.
So if people are in your areaand wanted to, you know, work
with you, sam and Redcom.
(41:34):
What is the best way to reachout to you?
Sam Rockaway (41:39):
They can find me on LinkedIn I have a pretty
active profile on LinkedIn orthey can call our office and ask
for me.
Tony Johnson (41:47):
Awesome.
Well, I sincerely appreciateyou coming on today.
It's been very informative.
I think it's been a lot of help.
I sincerely appreciate youcoming on today.
It's been very informative.
I think it's been a lot of helpand I think, if anybody's in
the New Jersey area, you'vedefinitely proven yourself to be
as knowledgeable as possible,and so you know looking to
invest in that area and you'relooking to do anything with
automotive, expand yourautomotive grasp or you know
(42:08):
doing.
It sounds like you've got a lotof industrial build-out already
going there, but you alsoyou're going through land
entitlement or looking for landfor building multifamily.
He'd be a great person to reachout to.
Sam.
I really appreciate you jumpingon with us today.
We've enjoyed having you andspeaking with you.
Sam Rockaway (42:24):
Well, thank you very much.
I appreciate being on the showand thanks for taking the time
out to meet with me.
Tony Johnson (42:28):
Yes, sir, I hope you have a great day.
Sam Rockaway (42:30):
You too.
Tony Johnson (42:31):
Bye.
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