Apr 15, 2017 6 min read

EIGHTY FOUR – Take a drive around the Pittsburgh region past new housing developments, hotels, even college dormitories and assisted living communities, and there’s a good chance 84 Lumber Co. had a hand in supplying the building materials and some of the labor in their construction.

Long a supplier of building materials for contractors, the company calls the category installed sales, which in addition to providing materials, adds a subcontractor function for various aspects of the construction labor. The decade-old division, founded in the depths of the housing bust to create replacement business, now accounts for 20 percent of the company’s annual sales and continues to grow.

Mike McCrobie, 84’s chief procurement officer, who was instrumental in building the installed sales division, said the focus in any of the more than 30 states it has stores, is on local projects with locally sourced labor.

The division covers both residential and multifamily – a term that for 84 Lumber means not just townhouses and apartments, but also hotels, dorms and assisted living communities. While the company always had some multifamily projects, McCrobie said that aspect of the installed sales business was officially kicked off in 2016.

“We focused on that piece because we believe that’s going to continue to grow over the next few years,” he said.

And while Western Pennsylvania and the tri-state area is a stronghold for the service in both residential and commercial projects, it’s also being replicated in many other of the chain’s markets around the country.

“We started the division in 2007. The downturn was the driving factor behind installed sales,” said McCrobie, 40, who joined the company in 1998 in its management program, and worked his way up through a variety of positions.

The biggest aspect of installed sales, he said, is building relationships with customers who are designing and building projects on a regular basis, he said.

“Our goal is to not chase projects, but to develop relationships with customers. And that is what you’ll see a lot of in Pittsburgh. We’ve been building projects for customers for years. We’re very diverse in the Ohio, Pennsylvania and West Virginia markets.”

On the residential side, the company’s installed sales customers in the area include Mystic, Rycon and Costa.

A couple of years ago, the division was also involved in the construction of various aspects of the Hyatt Place hotel at The Meadows Racetrack & Casino in South Strabane Township, and today, it provides a bricks-and-mortar way for 84 to showcase its installation skills for commercial projects.

“We actually use that hotel for visiting customers,” McCrobie said, adding that he likes starting a conversation by saying, ‘You know, we built this hotel.'”

But as McCrobie looks out across 84 Lumber’s market expanse – it now has stores in more than 30 states – he sees installed sales making their mark in a variety of locations.

“You’re going to see our biggest component of installed sales in metro markets, but we also do a lot of work up and down the eastern seaboard. In the center of the country, we’re very strong with installations into Tennessee.”

One of the convenience features of installed sales is that 84 Lumber uses its stores across the country as the contact point to develop new construction business, enabling a builder or developer to stop in and discuss a project.

“We use store locations as the operating piece for the installed services,” McCrobie said, adding that as projects are received, the company adds supervisors into the field. He said there are currently 125 supervisory positions in the field to manage construction activities.

And as the country’s largest privately held supplier of building materials, products and components are always available.

The company has six manufacturing plants in various regions where it builds roof and floor trusses and wall panels. The plants have a geographic radius to deliver materials to be competitive and provide overall service across large areas of the country. Another 20 of its stores provide engineered wood floor systems.

“We also have relationships with independent manufacturers in components we can partner with and use them as a vendor,” McCrobie said. “The greatest thing about being 84 Lumber is that we have resources far outside of the manufacturing piece we have,” he said.

The biggest challenge is procuring subcontractors to perform the various installations. To McCrobie, hiring locally is one of the most important pieces of installed services.

“We want to be a part of the community (wherever ) we have operations, and being a large organization, we want to use local labor whenever possible. The goal is always to build your business with local customers and local subcontractors. That’s the trick.”

“Right now we’re actually weighted more toward housing than we are commercial,” he said, adding that the mix of residential and commercial can vary from market to market across the country. “We see that multi-family continues to be strong. Our focus with the multi-family division is really to develop relationships with customers that are consistently building throughout the year. We coexist together to build the brand and to work with these customers.”

“Today we’re Installing from over 150 of our locations,” McCrobie said, explaining that different locations provide different services: framing lumber, panels as well as exterior shells for multi-family projects; windows and exterior doors; and .interior doors and trim. In about 30 of the company’s locations, “we bring in all parts and pieces of a door and assemble it for crews to install. Other locations specialize in siding and roofing, as well as cabinets.

“I always tell customers, ‘if you’ve ever been in one of our stores, you can see what we sell.'”

The longer term view is looking to be in 84 Lumber’s favor. Earlier this month, the U.S. Census Bureau reported that overall construction spending was 3 percent higher than February 2016’s estimate of $1,157.7 billion. New home sales jumped for the second consecutive month in February, up by 6.1 percent. McCrobie said industry information shows the multifamily market is expected to be strong through 2019.

Despite the rosy outlook, he remains vigilant.

“We don’t take it for granted ever,” McCrobie said. “You always have to be sourcing. That’s the name of our game, you have to be looking.”