RER interviewed numerous rental people regarding their experiences in 2023 and expectations for 2024, including Kevin Fitzgerald, CEO of Rental Equipment Investment Corp., headquartered in Miami. Previously focused on the Pacific Northwest and Intermountain west, REIC has expanded into other regions including Canada. Fitzgerald talks about the company’s prospects and expectations.
RER: How was your year, 2023, overall?
Fitzgerald: 2023 was a good year for us, particularly in our General Rental group. Of course, used equipment sales were strong but our same store rental revenues increased nicely.
What kind of year do you expect in 2024?
2024 should be another good year for us. We are projecting rental rate increases again but we do expect some of our used equipment sale margins to come down a little from the 2023 levels.
Any interesting new developments in 2023? New branches, product lines or segments, acquisitions, new software or telematics, new people, new emphasis?
We continued to purchase more companies in 2023. On the General Rental side, we purchased Aim High Equipment Rentals in Colorado and Black Mountain Rental in Wyoming, both excellent tuck-in acquisitions. On the Specialty Rental side we purchased Industrial Drying Solutions, which added some more product lines to our growing Specialty Rental group. We added several key people as well in our company in 2023 with the idea of bolstering our management depth for our planned growth in 2024 and beyond.
Any interesting changes planned in 2024? New branches, product lines or segments, acquisitions, new software or telematics, new people, new emphasis?
In 2024 we will continue to seek acquisitions to add to our geographic footprint and we will add several new locations for our Specialty Rental group to cover more of the entire US. We will also look to focus on industrial projects and non-residential/commercial projects, where we see good growth.
How are rental rates? Have they peaked?
We do see rental rates increasing in 2024 but not as much as in 2023. As long as demand is strong and our competitors stay disciplined, then we expect to see rates increase.
Is the marketplace more competitive now than a few years ago?
Yes, competition is always there. The majors are continuing to grow and the small rental companies are adding fleet to their stores. But as I said, there is always competition. So I guess competition is greater than it was a few years ago but the market demand is also much greater as well.
What were the strongest markets for you in 2023? Non-res construction (what segments?) /industrial/ manufacturing construction/ residential construction / highway work / small contractors / landscapers / homeowners/ Other?
Our strongest market in 2023 was non-residential construction.
What do you expect for 2024?
I believe 2024 will be another good year for REIC. Our Specialty Rental group is continuing to grow and we are really starting to see the different product lines develop across the country and in Canada where we have several locations. On the General Rental side we will see good same store growth and we will add more locations through strategic acquisitions.
Anything to add?
With the interest rates seemingly now stabilized, and with rates likely to come down a little, we expect to have a more stable financing environment, which is very important for our growth.