By Jordan Ross, Senior Preconstruction Manager
From record-high costs of lumber to historically long lead times for steel, our industry has experienced more volatility in the last four years than I can remember ever seeing before. The good news is that we’re seeing some positive trends like costs decreasing or plateauing in most areas. But it’s important to note that while they’re leveling out, they’re leveling out at rates still significantly higher than pre-pandemic. With that, rent rates have increased and deals are still viable, so our industry has remained active and resilient. But with lending rates higher than before, and some materials and equipment still experiencing rising costs and expanding lead times, a thorough, holistic preconstruction approach should be a non-negotiable.
When I say holistic, I mean a general contractor needs to be involved and working from the very first design phase discussion until well after construction is complete and the building is turned over. Your schedule and budget are only as good as your weakest link. So, unless your project team has considered and vetted every single facet of the drawings to ensure the pricing is accurate there could be a surprise lurking to throw up a roadblock on your road to success. Here are a few tactics from our own preconstruction process that I believe are essential to deliver a project on time, and within budget in current market conditions.
Get in the Weeds with Data
We are constantly tracking, monitoring, and analyzing construction and industry data. While we write thousands of subcontracts per year, we also monitor more than 100 specific material costs. Two-thirds of the Top 20 are showing a decrease in production costs. However, electrical wiring and equipment along with concrete, aggregate, and some insulation products still fluctuate frequently. We also track trade partner wage data, construction spending, designer workload reports, and more at the regional and national levels. This information allows us to make more informed decisions and recommendations about material selection and constructability based on data projections.
Be in the Room Where it Happens
This data shows us that things are still in flux and subject to change. If we price a project for a client and then show up months later to break ground — I can guarantee those numbers are no longer accurate based on where the subcontractor market is. While we’ve moved past the days of working in silos, I advocate for getting your design team and project team in the room together throughout the design phase so they can collaborate and work together to drive the design to budget based on accurate construction feedback loops informed by current cost data. This is also the time when we can offer insights into lead times, offer constructability reviews, and help identify alternate selections for any materials or equipment that aren’t readily available within our timeframe or budget.
Precon Isn’t One Size Fits All
There are so many factors that we have to consider and incorporate into our preconstruction process based on a project’s market sector, location, proximity to the public, accessibility, and more. Preconstruction is not just about crunching numbers and delivering a budget. For example, we recently built a 12-story luxury residential tower in Sarasota, Florida. Because the project sits along the Gulf Coast, our team knew to study the city and county codes first, and then study and consider the drawings to ensure that every requirement was incorporated into the drawings, and thus incorporated into the client’s budget. HVAC equipment being installed in a coastal zone has a special coating so it’s less prone to corrosion. All glass must be large missile impact rated. And all those specialized material selections come at a premium but provide the resiliency necessary for coastal living. But if your preconstruction team comes to the table informed and experienced, they can provide design feedback to ensure all those measures are incorporated into the budget and schedule from the beginning.
For me, preconstruction is our best opportunity to bring predictable outcomes, set expectations, and then deliver on those. In this industry, there’s really no such thing as a good surprise and that’s why we’re so passionate about our preconstruction processes. We can track data, collaborate with our design partners, and apply our knowledge and experience to ensure when the final design documents are complete, we’ve done our best to set the project up for success with the most predictable outcomes possible.
