NELSON, the Philadelphia-based interior design firm celebrating its 40th anniversary this year, has merged with two other firms, Cope Linder Architects and KA Architecture, to position itself as a full-service architectural and design outfit across multiple nonresidential building types.
The combinations became effective on June 1.
Founded in 1977, NELSON has steadily expanded for more than 15 years, primarily through acquisitions. In the past two years alone, it bought EHS Design and Marvin Stein Associates in Seattle, AAI in San Jose, and VeenendaalCave in Atlanta.
John “Ozzie” Nelson, Jr., NELSON’s Chairman and CEO, tells BD+C that his company’s marriages with Cope Linder and KA are the first of a series of mergers that NELSON plans to announce this year. Nelson says his company in 2017 would double its revenue to around $200 million and its workforce to “north of 1,200” from 625 at the start of the year.
Nelson and Ian Cope, AIA, LEED AP, Principal with Cope Linder Architects, had been talking, on and off, for 27 months about bringing their respective companies together. Cope says his firm had also been approached by two other suitors—including a Canada-based engineering firm—which it ultimately rebuked, he says, because it feared it might lose its identity with clients “who are concerned about all of this massive absorption of AEC firms” going on in the industry.
The addition of 50-year-old Cope Linder, also based in Philadelphia, makes NELSON that city’s third-largest studio, with more than 125 employees there. Cope Linder is best known for its work in the commercial, hospitality, gaming, and entertainment sectors. One of the first projects to be completed under the combined company will be the 51-story, 773,000-sf W and Element Hotel in Philadelphia, which opens next year.
Craig Wasserman, RA, Executive Vice President at KA Architecture, says his firm has been predominantly a core and shell builder and planner. It has tried to diversity on its own, “but it never worked out,” he explains. The merger with NELSON, on the other hand, “is the perfect compliment,” and allows KA to go to market as a full-service firm. “We’ve been telling our clients about this merger, and their reaction has been fantastic,” says Wasserman.
Cleveland-based KA Architecture—which was founded in 1960 and, prior to the merger, was into its third generation of ownership—has lent its design services to, among other projects, retail centers, mixed-used developments, and hospitality. Its merger with KA represents Nelson’s third location in the Midwest. The 1.3-million-sf Liberty Center in San Francisco will be the first major project completed under the new brand KA Architecture, A Nelson brand. (KA is the Executive Architect on this project.)
KA and Cope Linder are also forming a core-and-shell practice within NELSON, says Wasserman. Nelson states the combinations place NELSON more competitively into the high-rise architecture market.
The mergers also allow NELSON to launch a newly formed Hospitality Practice, and to beef up its Retail Practice.
Merging for the right reasons
Diversification is certainly one of the drivers behind NELSON’s acquisitive streak. For example, it is close to announcing another acquisition of a firm in New York that surveys and inspects buildings. Under Title 11, buildings over six stories high are required to be surveyed every five years. The firm NELSON would acquire already handles 800 of the 14,500 buildings in New York that fall under that regulation.
NELSON also runs a $13 million MEP engineering firm under a separate brand. But Nelson has never been a believer in combining architecture with other disciplines, such as engineering or building surveying, under one roof. He thinks the better solution to integrate vertically is to create holding companies to run those businesses separately, as it will the core-and-shell entity.
“Culture trumps everything else” when it comes to merging companies, says Nelson, speaking from experience. “It’s important for companies to look at the complete nature of coming together, and to be realistic.” He observes that, too often, smaller firms want to merge with larger firms just to take advantage of their marketing and sales clout without giving enough thought to how such a move might impact their employees and customers.
Nelson confirms that the managements of Cope Linder and KA are remaining with the company. He says NELSON looks for acquisition partners whose managements want to stay on with the combined firm.
When asked why so much AEC consolidation seems to be happening all of a sudden, Nelson says that relationships between firms and their clients don’t matter as much as they used to. “Everything has become a beauty competition,” and size, he says, has become a more important criterion to be considered for certain projects.
In the future, he says that NELSON will be looking to strengthen its position in Texas and the Washington, D.C. market.
Related Stories
MFPRO+ Special Reports | May 6, 2024
Top 10 trends in affordable housing
Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.
Retail Centers | May 3, 2024
Outside Las Vegas, two unused office buildings will be turned into an open-air retail development
In Henderson, Nev., a city roughly 15 miles southeast of Las Vegas, 100,000 sf of unused office space will be turned into an open-air retail development called The Cliff. The $30 million adaptive reuse development will convert the site’s two office buildings into a destination for retail stores, chef-driven restaurants, and community entertainment.
Codes and Standards | May 3, 2024
New York City considering bill to prevent building collapses
The New York City Council is considering a proposed law with the goal of preventing building collapses. The Billingsley Structural Integrity Act is a response to the collapse of 1915 Billingsley Terrace in the Bronx last December.
Architects | May 2, 2024
Emerging considerations in inclusive design
Design elements that consider a diverse population of users make lives better. When it comes to wayfinding, some factors will remain consistent—including accessibility and legibility.
K-12 Schools | Apr 30, 2024
Fully electric Oregon elementary school aims for resilience with microgrid design
The River Grove Elementary School in Oregon was designed for net-zero carbon and resiliency to seismic events, storms, and wildfire. The roughly 82,000-sf school in a Portland suburb will feature a microgrid—a small-scale power grid that operates independently from the area’s electric grid.
AEC Tech | Apr 30, 2024
Lack of organizational readiness is biggest hurdle to artificial intelligence adoption
Managers of companies in the industrial sector, including construction, have bought the hype of artificial intelligence (AI) as a transformative technology, but their organizations are not ready to realize its promise, according to research from IFS, a global cloud enterprise software company. An IFS survey of 1,700 senior decision-makers found that 84% of executives anticipate massive organizational benefits from AI.
Codes and Standards | Apr 30, 2024
Updated document details methods of testing fenestration for exterior walls
The Fenestration and Glazing Industry Alliance (FGIA) updated a document serving a recommended practice for determining test methodology for laboratory and field testing of exterior wall systems. The document pertains to products covered by an AAMA standard such as curtain walls, storefronts, window walls, and sloped glazing. AAMA 501-24, Methods of Test for Exterior Walls was last updated in 2015.
MFPRO+ News | Apr 29, 2024
World’s largest 3D printer could create entire neighborhoods
The University of Maine recently unveiled the world’s largest 3D printer said to be able to create entire neighborhoods. The machine is four times larger than a preceding model that was first tested in 2019. The older model was used to create a 600 sf single-family home made of recyclable wood fiber and bio-resin materials.
K-12 Schools | Apr 29, 2024
Tomorrow's classrooms: Designing schools for the digital age
In a world where technology’s rapid pace has reshaped how we live, work, and communicate, it should be no surprise that it’s also changing the PreK-12 education landscape.
Adaptive Reuse | Apr 29, 2024
6 characteristics of a successful adaptive reuse conversion
In the continuous battle against housing shortages and the surplus of vacant buildings, developers are turning their attention to the viability of adaptive reuse for their properties.