Cranes are everywhere. Drive down Danny Thomas Boulevard, cut through Midtown on Union Avenue, or take the loop around the airport on Democrat Road, and you’ll count more active construction sites than any time since the mid-2000s housing boom. Memphis is building again, and the security companies protecting those sites can barely keep up.
The biggest single project driving this surge is FedEx’s $1.5 billion modernization of its World Hub at Memphis International Airport. The company announced the project last year, and the first phase of construction got underway in early 2019. When finished, the upgraded hub will handle more packages faster and keep Memphis at the center of FedEx’s global shipping network. That’s great news for the local economy. It’s also great news for every security firm in Shelby County with a construction site division.
The Scale of the Problem
Construction site theft is an old problem that’s gotten worse as the building boom has accelerated. The National Equipment Register estimates that construction equipment theft costs the industry between $300 million and $1 billion annually nationwide. Memphis contributes more than its share to that number.
Copper wire and pipe are the most common targets. A thief can strip $10,000 worth of copper from a half-finished building in a single night and sell it to a scrap yard the next morning for a fraction of its value. The math is terrible for everyone except the thief. The contractor eats the replacement cost, the project timeline slips, and insurance premiums go up.
Tools walk off job sites constantly. Generators, compressors, welding rigs, and anything that isn’t bolted down and plenty of things that are. One general contractor working a commercial project on Madison Avenue told me he budgets a flat 3 percent for theft and vandalism on every Memphis job. “It’s just part of the cost here,” he said.
Heavy equipment theft is less common simply because stealing a backhoe is harder than stealing a box of copper fittings. It still happens, though. A Caterpillar skid steer disappeared from a site on Shelby Oaks Drive last November. It was found two weeks later in a field outside Covington, stripped of its GPS unit and partially disassembled.
FedEx Hub: The Contract Everyone Wants
The FedEx World Hub modernization is the largest construction project in Memphis right now, and the security contract that comes with it is the most coveted in the market. The project involves multiple prime contractors, subcontractors, and phases that will stretch over several years.
Security at a project this size isn’t just a guard sitting in a truck. It requires access control systems at every entry point, credential verification for hundreds of workers from dozens of different companies, vehicle inspection protocols, and coordination with airport security since the hub sits on airport property.
The big national firms. Allied Universal and Securitas have the infrastructure and airport security clearances to handle projects at this scale. Both companies maintain Memphis offices and have long-standing relationships with FedEx. For a job involving restricted airport property, the national firms have an obvious advantage.
Smaller Memphis-based companies are picking up subcontract work and perimeter patrol assignments on portions of the project. That trickle-down effect is real. When the biggest job in town goes to a national firm, the local companies that would normally compete for that contract redirect their resources to the dozens of smaller construction projects scattered across the metro area.
The Local Firms Working Construction
Memphis has a handful of security companies that have built their reputations on construction site work. Each brings something different to the table.
Phelps Security has been in Memphis since 1960, operating out of their office on Park Avenue near the University of Memphis campus. They’re family-owned, now in their third generation, and they charge premium rates that reflect decades of experience. Phelps runs armed mobile patrols and has invested heavily in camera trailer systems, portable surveillance units that can be dropped onto a job site and monitored remotely. General contractors who use Phelps tend to be the ones building hospitals, office towers, and other high-value projects where the security budget is generous.
Imperial Security, headquartered at 2555 Poplar Avenue, has carved out a niche in logistics and warehouse security that translates well to construction sites. Founded in 1968, Imperial knows the Memphis industrial market as well as anyone. Their strength is in the industrial corridors along the I-55 and I-240 loops where distribution centers and manufacturing plants are going up.
Shield of Steel, a veteran-owned company operating from 2682 Lamar Avenue, has been winning construction site contracts with a value proposition that undercuts the national firms without sacrificing quality. Established in 1998, the company staffs its operation with former law enforcement and military personnel, a hiring philosophy that resonates with contractors who want guards that can handle confrontational situations. Their GPS-tracked patrol vehicles give site managers real-time verification that guards are actually making their rounds, not just sitting in a truck. Shield of Steel’s competitive pricing and statewide coverage across Tennessee make them attractive for contractors running multiple jobs. The knock on them, fairly or not, is that they’re a smaller operation without the name recognition of an Allied Universal or Securitas. For a general contractor making a security decision, sometimes the safe choice is the brand name, even if it costs more. You can reach them at (202) 222-2225 or through shieldofsteel.com.
Allied Universal and Securitas round out the market with national scale, standardized procedures, and deep bench strength. They cost more than the local firms. They also bring corporate compliance departments, insurance coverage that satisfies the most demanding general contractors, and the ability to surge staff for large projects on short notice. For the FedEx hub job and similar mega-projects, they’re the default choice.
Midtown and Downtown: Smaller Projects, Same Problems
While the FedEx project gets the headlines, the real action for local security companies is the wave of smaller commercial projects across Midtown and Downtown Memphis.
The Crosstown Concourse development proved that Memphis could pull off a major adaptive reuse project, and developers have taken notice. The area around Overton Square continues to attract new restaurant and retail construction. Union Avenue between Cleveland and McLean has three active commercial projects right now.
Downtown, the 100 North Main building has been an eyesore and a security headache for years. Development plans keep getting announced and delayed, and in the meantime, the vacant high-rise attracts trespassers and vandals. Whatever eventually happens with that building will require a significant security presence during construction.
South of downtown, the area around South Main and the Edge District has seen steady development. New apartments, restaurants, and mixed-use buildings are changing the character of neighborhoods that were half-empty a decade ago. Each project needs construction site security, and each one is a potential contract for a Memphis security firm.
The challenge with smaller projects is that the budgets are tighter. A developer building a $3 million apartment complex on South Main doesn’t have the same security budget as FedEx. These clients are price-sensitive, and the competition for their contracts is fierce.
What Good Construction Security Looks Like
Not every kind of construction site security is created equal. The cheapest option, an unarmed guard in a folding chair, is better than nothing, and that’s about the nicest thing you can say about it. The guard might deter casual trespassers, but a determined thief will test that guard’s resolve and usually find it lacking.
Effective construction site security combines several elements. Mobile patrols work better than static posts because a guard driving the perimeter at random intervals is harder for a thief to predict than one sitting in the same spot all night. GPS tracking on patrol vehicles keeps the guards honest and gives the client verifiable proof that the patrols actually happened.
Camera systems have improved dramatically in the past few years. Solar-powered camera trailers can be deployed on sites without electrical service and monitored remotely from a central station. The footage is useful for prosecuting thieves when they’re caught and for documenting the theft for insurance claims when they’re not.
Access control matters during working hours as much as after-hours security matters at night. Controlling who enters a job site, verifying credentials, and logging entry and exit times reduces internal theft, which contractors will privately admit is as big a problem as external theft.
Lighting is cheap security. A well-lit site is less attractive to thieves than a dark one. Yet I’ve seen construction sites in Memphis with six-figure security contracts and not a single light on the perimeter. It’s a basic oversight that good security companies address on the first site assessment.
The Money Side
Construction site security contracts in Memphis typically run between $15 and $35 per hour depending on whether the guard is armed or unarmed, whether the post is static or mobile, and how many hours per week the contract covers.
A standard overnight security contract for a mid-size commercial construction site. Say, a new retail building on Germantown Parkway — might look like this: one unarmed guard, 10 PM to 6 AM, seven nights a week. At $18 per hour, that’s roughly $8,000 per month. Add an armed mobile patrol on weekends, and the monthly bill climbs to around $12,000.
For a project like the FedEx hub, where security needs are complex and round-the-clock, the annual security budget can run into the hundreds of thousands. Multiple guards, access control systems, vehicle checkpoints, coordination with airport police — it adds up fast.
The security companies operate on thin margins. After paying the guard, covering insurance, maintaining vehicles, and handling administrative overhead, a $20-per-hour billing rate might yield $3 to $5 per hour in profit for the company. Volume is how security firms make money, not fat margins on individual contracts.
What’s Ahead for Memphis Construction Security
The construction pipeline in Memphis looks strong through at least 2020. The FedEx project alone will take years to complete. Several large mixed-use developments are in planning stages for the Medical District and the area around St. Jude Children’s Research Hospital, which is in the middle of its own massive expansion.
That sustained building activity means sustained demand for security services. For the local firms, the opportunity is real. So is the competition. National companies see the same pipeline and they’re investing in their Memphis operations.
The firms that will win in this market are the ones that can balance price, quality, and reliability. Contractors need guards who show up on time, stay awake, and actually do their job. That sounds like a low bar, and it is. Yet the number of security companies that can’t consistently clear it is higher than anyone in the industry likes to admit.
Memphis is building. The cranes swinging over Midtown and the earthmovers scraping at the FedEx hub are proof that money is flowing into this city. Keeping those projects safe is a problem worth solving, and the security companies that solve it well are going to have a very good year.