The Return of Construction

In North Fort Worth we are seeing signs of life in the construction business.  In the last several months, projects of all types have been evident within a small radius from the Blue Leaf Realty office on FM 1709.  After completing the MSRE program at University of Texas at Arlington, I view this work with a tuned and educated eye, knowing the months of planning and effort that has gone into these projects even before they break ground. From site selection, financing, cash flow analysis, design, bidding, material procurement, and actual construction, each project has hours and hours of people's time and effort supporting it.

RESIDENTIAL:  From single family to apartment buildings, construction  is going strong in the Heritage/Alliance area.  It has been exciting to see new subdivisions started and watch homes being built on infill lots.  The construction of multi-family is a more arduous process, but the scope of the project in the N Fort Worth region is a reminder of how many people are interested in living in this vibrant area.

BUILDING: Commercial, retail, and office construction has continued over the last couple of years.  The opening of Alliance Town Center has sparked numerous projects from a multi-screen movie theater to the construction of several large grocery stores.  As is most often the case, this has encouraged smaller businesses - both local or national- to choose to open business here.  The construction of a new hospital, Texas Health Alliance, is scheduled for completion this fall and has increased the demand for office space in the area.

ENGINEERING:  While to many it seems late in coming, with the construction going on in this area the new roads are better late than never.  It is virtually impossible to drive around north Tarrant County without encountering major road construction projects.  From the expansion of Golden Triangle in front of the BLR office to the huge overpasses connecting Loop 820 and I-35W, the ability to move from place to place in this area will soon go from a virtual nightmare to a dream.

INDUSTRIAL:  The Alliance industrial area just north of our office has continued to attract businesses, but many have moved into vacated space limiting the new construction in this area.  Further north in Denton, a Target distribution center is planned and just west of the Texas Speedway on Hwy 114, General Electric is completing a huge locomotive manufacturing plant.

While it feels like real estate and construction have spent the last few years traversing the desert, North Texas is clearly the place to be today and hopefully long into the future.  The last two years Scott and I invested in the UTA MSRE program have helped us see the world of real estate with a broader understanding and through more enlightened eyes.  That, in addition to getting to know some super nice people, has made it time well spent.

Building Material

Where to build? What to build? Who to have build it?  All of these are important and traditional question regarding a project. While what to build WITH has long been a decision point, it has most often had to do with cost or aesthetics or some combination of both.  As sustainability becomes an increasing concern in all aspects of present life, what you choose to build with takes on new meaning and significance. Green building means many things to many different people, but making choices with the earth's resources, our carbon footprint, and future generations in mind is not only a good thing, it is an essential thing.  Organizations such as the USGBC (U.S. Green Building Council)  have created LEED (Leadership in Energy and Environmental Design) certifications for people and buildings to help communicate the level of sustainability represented in the project.  

WOOD: People will continue to use wood as a primary construction material, but choosing the type of wood can make a significant difference.  Wood that is local will limit the transportation needed to get it on site.  Woods, such as bamboo, grow quickly and selecting them reduces deforestation.  Minimizing of changing the glues used in the construction of plywood and particle board can reduce VOCs improving the air quality of the interior.  Using recycled wood, from old buildings or reclaimed wood can not only result in interesting material, but an earth friendly choice as well.  The TreeHouse in Austin is a hardware store that specialized in sustainable building material with a company bi line of "smart building - better living".  They also specialize in education, helping people make decisions based on personal goals and straight forward information in the areas of savings, health and ecology.

MASONRY: Masonry products such as brick and stone are more naturally sustainable because they are made from earth made material that is not a limited resource like wood.  Concrete, while it falls in to the masonry group, looses some of its sustainable "points" due to the manufacturing process.  In addition to the issue of transportation, concrete production emits VOCs into the environment.  It does remain as a good alternative, however, because it is very durable and more energy efficient that porous building materials. While it is not officially masonry, I must include in this section the use of dirt "bricks".  Made with local dirt and formed by Advanced Earthed Construction Technologies, Lawrence Jetter has created the opportunity to make building material on site, with local resources - it doesn't get any more sustainable than that!

The other materials that go into construction such as steel, glass, finish out material all have green or sustainable options.  By asking questions and making environmentally wise choices we can have a big impact on the greening of construction.

Extreme Construction

Weather conditions impact construct through the materials and the workers, but what about then the weather is extreme?  The importance of creating a timeline to try to prevent avoidable timing issues is essential.  Understanding the best time to start or way to pace a project can save not only money, but also injury and inferior workmanship.

COLD: Extremely low temperature can effect how materials perform from metals to concrete. Often the only solution is to "create" warmer temperatures in hopes of achieving typical performance.  Transportation on material can also become a challenge if the cold temperatures come with ice and snow.  Another possible issue is the use of asphalt shingles, which can crack if they become brittle.  A final challenge is the removal of snow which may not only make it hard for workers to arrive at the job site, but can also cover materials making it difficult to locate and move them.

HEAT:  Workers in Abilene continued to work on the construction of the McMurray University stadium despite the triple digit heat.  While heat has a huge impact on workers, it also impacts building material as well.  If humidity is added to the heat, the danger of moisture becoming trapped in the building material also becomes an issue.  The temperatures in Dubai can exceed 110 degrees, but add the wind and sand so common in this area and you challenge even the heartiest construction workers. (add the construction project of the tallest building in the world to that mix and you have extreme working conditions!)

While you can't always know what to expect when it comes to construction and the weather, there are some places on earth where you have to plan for the worst!

The Work of Labor

The intricacies of labor laws are complex, but some level of understanding is essential to a smooth construction project. The employment of labor forces in the United States operates under both federal and state statutes that come out of a long history of labor-management relations.From the 1932 Sherman Anti-Trust Act originally designed to prevent business monopolies came the beginnings of our current day unions.  Other acts such as Norris-LaGuardia Act and the Wagner Act have created a complex system of balance and relational structure that is evident in many fields including the construction business.  Since construction workers are often thought of as skilled workers with no permanent position due to the limited duration of a project, the formation of trade groups such as the Building and Construction Trades Department of the AFL-CIO  are important.  One of the roles of these groups is to help coordinate with both management and government entities.  While it is not essential for every general contractor or construction manager to understand all the elements and expectations of each group, it is essential that the subcontractors they hire remain current on expectations such as wages, hours, and site conditions.

Building Blocks

Most people remember building with blocks, wooden or plastic shapes that allowed us to take our ideas into 3D reality.  While it is obviously much more complex, the increasingly sophisticated modular building process is making that process work on a grand scale.  Building the components of a project - commercial or residential - off site allows not only multiple phases of construction to be completed simultaneously, it also protects the construction from the elements.  Weather is one of the number one causes of construction delay.  Rain, cold, and extreme heat can not only stop actual construction, but can also damage materials resulting in the need to re-order supplies.  Modular buildings, because they are typically built indoors, remove that element of unknown and allow progress even in poor weather conditions.  Also, because they can significantly reduce the amount of time to complete a project they are typically more cost effective.  Despite their uncertain reputation, many modular components are built to exceed building standards and often include more advanced energy efficiency systems as well.

There is also a rise in green modular homes that are often smaller than traditional homes and incorporate energy practices such as solar and wind power.  Because transportation of materials and equipment is one element of consideration when building green, many proponents of modular homes believe this is the ultimate reduction of a home's carbon foot print.  What ever you choose to believe, you must admit that today's modular home is a look into the future of cost-effective, time efficient, and in many cases beautiful, construction.

green modular building

Building 101

Many things go into the building of a project - foundation, plumbing, electrical, cladding, earthwork, and many more.  While it is obvious that you can't pour the foundation until you complete the earthwork, many other elements may not be so obvious.  Understanding the parts is important, but knowing the order they must be performed or completed is essential.  This is certainly an area where experience and planning can save time and money.  In addition to the actual work or installation, it is important to also include a timeline for the procurement of materials and equipment.  Some equipment may cost thousands of dollars a day to have on site, so careful scheduling can greatly reduce costs.

Whether building a home or a skyscraper, it is basic building 101 to think through the steps and elements of the project and create a progressive timeline to be sure they are done in timely and effective sequence. 

Time & Money

Talk to any investor and you will enter into a conversation about the time-value of money.  While this refers to the interest earned of paid in a financial relationship, there are elements that apply to the construction process as well.  Most projects are funded wither by a third party lender or investors seeking a profit.  For this reason, time and money are inexorably tied in every construction project.  If a project takes longer than expected there will not only be the increased interest change, there is also the danger of lost revenue.  If the project has a specific projected opening date, such as a first day of school for student housing, delays can end up derailing and otherwise profitable venture. 

While balancing the expenditure of time and money is important, the construction company adds the additional challenge of meeting a required level of quality.  Fast and cheap are not the only standards of expectations of an owner and therefore the project must be well planned to meet all of the developer’s goals. The use systems and models, part of basic control theory, can help manage these elements of a project.  There are many things that can impact a project such as weather, vandalism, and delay in material - sometimes referred to as "lightning bolts" due to their unexpected nature.  Despite those events, every project must start with a standard and plan for the design, budget, and schedule.  Maintaining ongoing evaluation of this schedule allows the different parties to identify changes in timing or expenditure in a timely manner, allowing for adjustments if necessary or possible.  The primary way to do this is through regular communication between parties and a comparison of actual numbers to the base plan. Turnaround documents (TAD) and regular meetings are one way to help keep everyone on the same page and, hopefully, maximizing the spending of both time and money.

Ridgemont Construction

Ridgemont Commercial Construction is a general construction management company in Irving, Texas. Seth Williams, Director of Business Development, was kind enough to take part of his Saturday to talk to us about his company and projects.

Ridgemont is 36 year old company and does not self-perform, subcontracting all the work on their projects.  They maintained production strong numbers even during the national recession and were even able to grow their company.  Seth shared his belief that this is the result of the high standard by which the company does business - evidenced not only in production numbers, but also in the high percentage of repeat business.

Ridgemont started doing interior finish-out for hospitals and continues to have clients in the medical related fields.  Their work is primarily commercial including Public-Private Partnerships, County Jails, and park & recreation facilities in addition to more traditional retail.  While it is unusual, they did complete a $4 million residential project in Highland Park that was really run more like a commercial application.  They were also part of a LEED construction project of a private school, St. Alcuin School in Dallas.

Seth spoke openly about the high degree of competitiveness in the construction industry pointing our that there are virtually no barriers to entry.  The result is that there are a significant number of contractors all vying for the same, limited business.  It is here, again, that Ridgemont's high company standard has allowed them to succeed.  Seth pointed out that they were looking for "base hits, not home runs" and therefore gave the necessary attention to all sized projects, not just the more high profile ones.  He also talked about the importance of transparency, saying they will even invite an owner in to participate in the bidding process if they feel it would be helpful.

The company has 3 owners and clearly is a relational based company.  The office was very inviting with the design reflecting the construction nature of the company's work.  The layout of the office space clearly encourages collaboration with open space and accessible offices of the leadership. From the work-out area to the game room to the open space where the team works together to meet bid deadlines it is evident that this is unique work environment.

One one the regular clients that Ridgemont works with is the group Roundtree Automotive and we were able to visit a site in Dallas that is scheduled for completion in Sept.  The Chrysler, Jeep, Dodge dealership is located directly opposite the entrance to Love Field Airport.  The land, formerly home to a warehouse, is a great example of brownfield development.   We were met at the site by Reese Goewert, Project Superintendent.  He spoke candidly about the challenges of the project including coordinating the building inspector's visits to sign off on work.  Despite the heat and the fact that is was a Saturday afternoon, Reese was hard at work, just a real life example of the dedication and integrity of Ridgemont Construction.

The Unseen & Unexpected

Surety bonds and construction insurance are an important considerations when starting a project and selecting a construction manager or general contractor.  Surety bonds are the structure by which a party will assume liability for the debt, default, or failure in duty of another.  It is not a loan and not insurance. The main purpose of holding a surety bond is to protect yourself as the owner/developer from default of your contractor or manager.  There are also different types on bonds such as contract, performance, and payment bonds each focusing on a specific aspect of the construction process.   While the Miller Act requires many public projects to have surety bonds, many private companies are more concerned with the bond ability of a company because it is a good sign of financial health - one of the major reasons for business failure. There is also the option of co-sureties which allow a division of contract obligations.  The important thing to remember when it comes to bonding is that it is negotiated within the contract and the cost should be considered and weighed against the benefit as is each aspect of the process.

The goal of insurance is to minimize risk and exposure.  There are many different types of insurance that are applicable to a construction project such as liability insurance.  Some of the more unlikely insurances might include vehicle insurance for construction equipment, insurance of materials en route, and replacement of materials stored on site.

From A to B

The scheduling process in a construction project is not only complex, it is unique to the building, the site, the location, and the people involved.  There are several approaches to creating a project timeline, but in all cases it is essential to have checkpoints, monitoring, and flexibility.  If the challenges of constructing the project were not enough, you must also add the stress of the credo "time is money" as the need to finish quickly must balance with quality.

One of the most essential elements of creating an effective timeline is to identify critical path items - key work items that must happen before other items may occur.  These items become the focus when crashing or accelerating a project, so they must be clearly identified early in the process.

The bar chart allows the developer to see the project length and overlap the duration of each important element of the process.  One of the major shortcomings of this process is that it does not easily show how one activity might be dependent on the completion of another.  It does allow visualization of different elements occurring simultaneously and gives an overall sense of time, but is not usually used to calculate hard dates.

The matrix approach is most often used for repetitive elements and gives a timeline with basic start, stop, and duration times that are helpful in planning.  It provides a framework of the project and its major parts without focusing on overly specific details and as a result is a good launching point for more complex planning.

The network schedule is also known as precedence notation and looks at critical path elements.  It assigns each major task both early and late start dates as well as duration time.  As a result it is helpful in determining where time can be given or made up in the event of a delay.  It is also helpful in the ordering materials because if provides and ongoing check of the time frame to allow for just in time procurement and reduces the need for additional storage.

These timelines, what ever format, are usually displayed on site as well as used in ongoing meetings with the owner, contractors and superintendent of the project to help keep everyone accountable and aware of the importance of timely progress. The timeline also helps everyone see the fuller scope of work and hopefully creates some buy in to the finished project.

The visual timeline of this old warehouse being transformed into a trampoline park demonstrates the many different construction aspects of getting from point A to point B. (Be sure to watch for the dry erase board timeline at about 1:30)

So You Want to Be an Architect...

Most people's vision of an architect has the person sitting around a drafting table drawing pictures of buildings.  While this is a pat of the profession, there is increasing more to it.  The first myth is that all architects do is design projects.  Much of an architect's work involves meeting with clients, working with construction teams, and generally managing their business.  The second myth is that you must be able to draw to be an architect.  Doug Patt, in the video below, explains that while you do not have to be an artist, you must be able to sketch or have some medium to convey visual ideas.  The third and final myth is that architects still draw with design plans by hand.  While concepts and ideas are usually sketched, the majority of the drawing and designs  are now completed using architectural software such as CADD (Computer Assisted Design & Drafting) software.

MasterFormat

The MasterFormat system was designed by the Commercial Specification Institute in an attempts to organize construction documents in a uniformed manner.  The format uses a system similar to that used in a library to separate the different drawings by general and increasingly specific features.  Construction documents can be hundreds of pages long, typically on huge blueprint paper, making thumbing through them difficult if not impossible.  MasterFormat allows construction professional and tradespeople an easy index to find what they are looking for, this saving both time and money.

The Future is Now

One Bryant Park is an amazing example of modern day construction.  The 54 story building is located in central Manhattan and is the second tallest building in the city, second only to the Empire State Building.  While its aesthetic value is enjoyed my virtually everyone, its greatest value add might not even be visible to a passerby.  One Bryant Park is one of the greenest buildings in the world!

 Richard Cook, the project architect, notes that small changes on a big scale make a huge difference and that was exactly the goal of this sustainable construction.  The green features start with the very design of the building.  The upper floors and open space create a ventilation system that actually pulls air through the building.  The building acts as a giant air filter, processing the air as it enters the building not only improving the indoor quality of the air, but also returning it to the city actually cleaner than when it came in.  The building boasts a green roof to help counterbalance the heat island effect, and extensive water reclamation system, and windows whose glass actually helps keep heat out thereby reducing the need to cool the building.  The buildings was also constructed of materials manufactured within 800 km of the site with 60% of the steel coming from recycled metal.  The developer also added slag from the manufacturing of steel to the concrete, not only making it more sustainable, but also stronger.

While many people feel that green or sustainable construction is too expensive, Cook reiterates that we cannot afford not to make these changes.  He estimated the additional cost at about 5% of the project cost with a return not only in energy savings, but in choosing to make a difference that impacts tomorrow today.

"Break" the Code

Building codes actually cover a variety of construction codes including the building, plumbing, electrical, and mechanical codes.  The goal of the building code is to help uphold a standard that sets a minimum requirement necessary in construction to allow for the health, safety, and general welfare of the public.  The building code is sometimes referred to as "the worst a building can be built" and the hope is that many developers will go well beyond those minimum requirements.

One of the greatest challenges when it comes to building codes is that they vary from state to state.  This is understandable, on the one hand, because conditions and uses may be specific to an area based on things such as weather and available materials.   The only construction that must adhere to a national building code is manufactured homes, because they are constructed and transported around the country.  The adoption of parts of model codes such as the International Building Codes saves not only time and money, but creates some consistency in building expectations.

The final challenge in building codes is in the area of enforcement.  This is done through different processes such as  drawing a permit (an application for inspection) and the inspections necessary for a Certificate of Occupancy.  These inspections may take place at different times during the construction process, but are essential to the ultimate use of the building by controlling the timing it can be occupied.

Management & Delivery

The clarification of "management" vs. "delivery" is the subject of the article written by Michael Kenig of Holder Construction.  While the title Construction Manager is tossed around in the construction business, Kenig says there is reason for concern that it does not communicate the important potential differences.  The difference has to do with the level of risk the Construction Manager carries and therefore the liability and expectations they must operate under during a specific project.

Construction Manager "Not-At-Risk" is a management role in which the CM oversees the design and construction.  It is also know as CM Agency and may be held by the owner or a third party.  The duties of the CM Agencies "Not-At-RISK" might include such tasks as hiring the architect and CM or GC "At Risk", overseeing the bidding process, and managing the delivery process of the hiring of an "At-Risk" CM.

Kenig points out that this is NOT an either/or question, but the question had to do with two different elements of the project: 1) Management and 2) Delivery.  His suggestion is to first determine the method of management of the project and once that decision is made then ask which delivery approach is most suitable.

Project Delivery focuses on the structure and responsibility of the different parties and is therefore "At Risk". The delivery process looks at the design, construction, operations and maintenance of a project and may be structure in several ways including Design-Bid-Build (DBB), Build-Operate-Transfer (BOT), and Integrated Project Delivery.

Perhaps the most important thing to confirm when you are discussing a Construction Management position is to clarify the intent of the owner so there is understanding regarding the responsibilities of the parties involved.

Reach for the Sky

Building a skyscraper is an amplified view of the many people and processes involved in a construction project.  This video gives a glimpse of the many steps involved in starting a project and building the bones or skeleton.  While this seven story building may not be a skyscraper by most people's standards, it does show the process and people involved in building a multi-story commercial building.  From the bidding process to "going vertical", it is evident that the need for focus and coordination is essential to the success of a building project.  The technology that is currently available brings both benefits and challenges.  One of the most interesting  elements of the bidding process was the construction of a 3-D model.  While this used to be done with glue and an X-acto knife, the development of the 3D printer makes construction of the model easier and more accurate.  This is AMAZING technology...

Another fascinating person on a construction sit is the field paleontologist.  It is this person's job to check for fossils during the extensive excavation of preparing a construction site.  This earth work is tremendously costly and the discovery of a burial ground of other significant artifacts can add both time and money to a project.  Nonetheless, virtually every site has at least one paleontologist on site to sift through the rock and dirt as it is moved to make way for the new building.

Steel construction transformed the ability to go tall, forever changing the skylines of cities around the world.  The transition of riveting the girders to bolting them has allowed modern day construction to save both time and money.  Also, the addition of rebar to the concrete foundation allows for a balance of the vertical or gravity load caused by the weight of the building and the horizontal load created by wind and earthquakes.  Engineers also account for the strategic break of the steel structure by adding "dog bones" or weak point so buildings can have beams repaired or replaced without unnecessary demolition.

The construction documents for a building such as the one in this video can be upwards of 300-500 pages.The construction manager is often coordinating thousands of task and jobs to be sure they are done in a timely and accurate manner. All of this is just reminder of the work and coordination needed to successfully build a skyscaper.

Outside of the Box

The Spa Castle in Carrollton, Texas is a grand example of a construction project that is well outside of a typical project.  The 140,000 square foot spa opened in May 2012 after overcoming a number of challenges.  One of the most significant obstacles was the fact that it is a four story building and had to obtain a variance from the City of Carrollton.  The developers vision for the project was a spa "community" that created a relaxing atmosphere and promoted the health and well-being of its clients.  The spa incorporates many different amenities, many of which are included in the $35 daily fee.  Spa Castle is home to many different pools - both indoor and outdoor - each with different hydrotherapy benefits.  The spa also has a number of saunas (10 to be exact) each with its own special design and focus. In addition to the saunas and pools there are different relaxing areas (even a sleeping room) and a comprehensive beauty and massage spa with services available for an additional charge.  When complete, the spa will also include a hotel, bar/lounge, banquet hall and restaurant.

While the services are impressive, the construction materials are amazing.  The Hinoki bath, modeled after the Japaneses tub,  is built from 300 year old pine wood imported from Asia and filled with warm mineral water.  The flooring around the outdoor pool is volcanic rock shipped from Korea and much of the marble is from China.  The attention to detail is visible everywhere - from the beautiful vases displayed by the snack bar to the oxygen dispensers located throughout the facility.

A project like this represent a great deal of risk.  It is a unique use and only the second spa castle in the United States (the other one is in New York).  While this might pose challenges with financing, the developer was able to privately fund the project through investors.  The main benefit from this private funding is that it allowed him tremendous control over the project.  The design and construction was done almost entirely in-house.  While the spa has only been opened about 2 months, based on the traffic we saw on this Saturday in June, it promises to be a great success.

The Project & The Players

Human beings love to build things and as a result we have a long history of construction.  Unlike the old-fashioned barn raising, most construction projects today require an extensive plan and the coordination of a number of people to complete the project.  Construction management is the process of overseeing the project and coordinating the goals of the owner with the physical and financial process of actual construction.

There are three basic stages of a construction project.   1) Planning  2) Design  and 3) Procurements (of materials) and Construction.   Each stage requires a number of professionals and tradesmen working together and the construction manager is responsible for coordinating their efforts.

While every project is unique, there are four major types of construction.
        Residential Construction - includes all buildings used as residences such as single-family, condominiums, and apartments
        Building Construction - refers to buildings used for other than housing including commercial retail and office, schools, churches, meeting halls, and government buildings
        Engineering Construction - focuses more on use than looks and includes such projects as highway, airfields, and flood control
        Industrial Construction - deals with the construction of buildings used to manufacture products and require a high level of specialization including refineries, chemical plants, power generators.

The 4 main players in a construction projects are 1) The Owner, 2) The Architect-Engineer, 3) The Prime Contractor, and 4) The Subcontractor.  Each person or firm has a special role and responsibility.  The structure of accountability and responsibility can vary, but in most cases the Architect-Engineer and Prime Contractor answer directly to the Owner.  The subcontractors are most often directly accountable to the Prime of general contractor and do not even have a contract with the owner for the work they will perform on his/her project.  There is a growing trend of integrating the Architect-Engineer and General Contractor in a team approach in hopes of benefiting from the insights of each party early enough in the process to minimize timely and costly mistakes.

Add in the financing and contractual structure of a project and you can see the high level of complexity present in every construction management project and the importance of having the right people in the right place as early as possible.