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
Government Buildings | Aug 7, 2023
Nearly $1 billion earmarked for energy efficiency upgrades to federal buildings
The U.S. General Services Administration (GSA) recently announced plans to use $975 million in Inflation Reduction Act funding for energy efficiency and clean energy upgrades to federal buildings across the country. The investment will impact about 40 million sf, or about 20% of GSA’s federal buildings portfolio.
MFPRO+ New Projects | Aug 4, 2023
Nashville gets 'first-of-its-kind' residential tower
Global architecture firm Goettsch Partners announces the completion of Alcove, a new 356-unit residential tower in Nashville, Tenn., developed by Giarratana LLC.
Industrial Facilities | Aug 3, 2023
The state of battery manufacturing in the era of EV
One of the most significant changes seen in today’s battery plant is the full manufacturing process—from raw materials to the fully operational battery.
Government Buildings | Aug 2, 2023
A historic courthouse in Charlotte is updated and expanded by Robert A.M. Stern Architects
Robert A.M. Stern Architects’ design retains the original building’s look and presence.
Hotel Facilities | Aug 2, 2023
Top 5 markets for hotel construction
According to the United States Construction Pipeline Trend Report by Lodging Econometrics (LE) for Q2 2023, the five markets with the largest hotel construction pipelines are Dallas with a record-high 184 projects/21,501 rooms, Atlanta with 141 projects/17,993 rooms, Phoenix with 119 projects/16,107 rooms, Nashville with 116 projects/15,346 rooms, and Los Angeles with 112 projects/17,797 rooms.
Architects | Aug 1, 2023
Ware Malcomb announces hire of Jason Golub as Regional Director
In this role, Golub is responsible for the overall leadership and continued growth of the office.
Market Data | Aug 1, 2023
Nonresidential construction spending increases slightly in June
National nonresidential construction spending increased 0.1% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. Spending is up 18% over the past 12 months. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.07 trillion in June.
Healthcare Facilities | Aug 1, 2023
Top 10 healthcare design projects for 2023
The HKS-designed Allegheny Health Network Wexford (Pa.) Hospital and Flad Architects' Sarasota Memorial Hospital - Venice (Fla.) highlight 10 projects to win 2023 Healthcare Design Awards from the American Institute of Architects Academy of Architecture for Health.
Office Buildings | Aug 1, 2023
Creating a nurturing environment: The value of a mother’s room in the workplace
Since becoming an architect, Rebecca Martin of Design Collaborative has drawn a mother’s room into numerous projects. But it wasn't until she became a mom that she fully appreciated their importance in the workspace.
Digital Twin | Jul 31, 2023
Creating the foundation for a Digital Twin
Aligning the BIM model with the owner’s asset management system is the crucial first step in creating a Digital Twin. By following these guidelines, organizations can harness the power of Digital Twins to optimize facility management, maintenance planning, and decision-making throughout the building’s lifecycle.