As a Commercial General Contractor, we’re often asked why we steer away from the process of Hard Bidding and opt for a more negotiated process to serve our clients. At the surface, hard bidding seems like a great idea and could create healthy competition. However, at The Douglas Company, we firmly believe that hard bidding is actually detrimental to our clients, causes inflated project costs, and can create a reactive environment to project management.
What is ‘Hard Bidding’?
Before we get to why, first let’s discuss what ‘hard bidding’ entails. Hard Bidding is a process that includes sending out a complete set of construction documents to a list of anywhere from two to five General Contractors. The companies will then go to the subcontractor market for pricing and put together a proposal, which will be compared side-by-side by the ownership group. These companies know that these situations are extremely competitive and the... Read More >
When you think ‘Senior Living’, what do you picture? Personally, my mind immediately goes to the assisted living facility my parents lived in for five years. In reality, senior living is an umbrella term that is broadly applied to a wide range of housing communities that are designed to make life easier, safer, and more convenient as the resident ages. It’s not just one size fits all. As they age, many people begin to recognize the benefits of living in a community with people similar in age and activity level. Because the umbrella term of ‘Senior Living’ is so often tossed around, many don’t realize the number and variety of options available to seniors according to their needs. Let’s talk about the four main options for senior living – starting with the newly popular Active-Adult-style communities.
Active Adult is the latest entry into the Senior Housing realm and is the... Read More >
For developers in the ever-evolving senior living industry, deciding which amenities to include in their projects can be quite a process. These decisions are essential to ensure that their community not only meets the functional and health needs of their senior residents, but also provides a sense of security, belonging, comfort, and even purpose. Looking to emerging, industry-wide trends can help these developers to keep on top of standards and also introduce amenities that will help them stand-out to prospective residents.
As a senior living general contractor with nearly 50 years of experience, we’ve seen our fair share of trends and we’ve compiled a list of the top senior living design trends to watch in 2024. Let’s dive in:
1. Enhanced Dining Options --
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Dining programs have long been considered a crucial element of senior living, designed to not only meet the nutritional needs...
As an industry leading, Senior Living and Multifamily General Contractor, we know that one of the primary concerns for most developers continues to be staying within budget. A crucial part of meeting these financial objectives is controlling costs from the start and maintaining that control throughout the life of the project. At The Douglas Company, we take this seriously and make a commitment to our clients to come up with the best price solution possible. Here’s six ways that we control costs as a General Contractor:
1. Development Planning & Leadership:
From the very moment we receive information about a new project, we begin to invest our time and resources into comprehensive planning and design. The work that’s done at this phase, looking into absolutely every detail of the project, lays the groundwork for keeping within budget and reducing surprises along the way.
Our leadership team works closely with architects, engineers, and the... Read More >
For every project they build, developers need to secure multiple resources. Not the least significant of these is a General Contractor, who will set the tone for the entirety of construction. A General Contractor that excels at working on a collaborative basis during the design phase is the best choice.
Some contractors do a lot of hard-bidding for projects, where the lowest price wins. Being the lowest bidder doesn’t necessarily mean that’s the best company for the job. Further, where does this process leave the projects that need help before they get to construction documents? It’s a good idea to ask a potential contractor what percentage of their work they bid versus getting involved early and helping during the design phase.
While many contractors say they like to get involved in those early stages, the reality is that some of those contractors aren’t diving deep and putting in the effort required to... Read More >
When the average person hears the word ‘construction’, their mind probably goes to images of buildings or roads. Maybe they even think about all the materials, labor, and time that go into those structures and infrastructure. They probably don’t immediately think about all of the technology associated with the construction industry. However, those in the industry know we’ve seen some incredible advancements over recent years that could fundamentally change the industry – from AI and Building Information Modeling all the way down to robots and exoskeletons that help with the handling of materials. For example, we’ve seen the use of virtual reality to conduct tours of facilities during the design phase which helps to lower the need for changes during construction. Despite these huge technological advances, many are being underutilized in most construction sites. But we expect that as the workforce demographic shifts towards younger generations, we will... Read More >
I was listening to a podcast the other day called “Chasing Excellence” by Ben Bergeron and Patrick Cummings. While this podcast is generally centered around Crossfit and athletics, it also tackles being better at life in general. In this particular episode they talked about how they could tell if an individual would make it or not. This was just based on observing how they behaved. They noted the difference between two rookies coming in after a break in competition. The first rookie, scrambled around, found a snack machine got whatever he could and then sat down and ate. This individual was visibly anxious and hurried and obviously didn’t do well in the next event. The second rookie on the other hand finished the event, sat down and reached in his cooler where he had pre-packed exactly what he wanted to eat to ensure that he was properly fueled and ready... Read More >
During the last week of October, The Douglas Company team attended the annual National Investment Center (NIC) for Senior Housing & Care Fall Conference in Chicago. The conference is attended by a range of people from fields across the industry -- general contractors, developers, operators, lenders, architects, and many more are represented. This year, the event was well attended, and while there was very little evidence of new senior living development projects, we noticed that the overall mood was upbeat and positive.
There is good reason for the upbeat, positive mood, however. Occupancy rates have been on the upswing for eight consecutive quarters, contributing to increased revenues. The occupancy rate for the NIC MAP Primary Markets was up 60 basis points from the first quarter and well above the lows reached during the pandemic. The increase in occupancy is accompanied by a stabilization of expenses and a decline in COVID related... Read More >
The year 2023 has introduced a unique set of challenges within the commercial lending environment, particularly when it comes to financing multifamily projects. Multifamily housing plays a vital role in addressing housing needs and urban development, yet it continues to face obstacles when seeking bank financing. Specifically, developers are seeing an increase in challenges when it comes to these five things: evolving risk perception, market volatility, regulatory complexity, increased credit scrutiny, and intense competition for financing.
Evolving Risk Perception
In 2023, multifamily projects still contend with a cautious risk perception by lenders. Unlike single-family homes, multifamily properties come with a range of operational complexities. Lenders remain concerned about tenant turnover, rent collection, speculation around rent rate increases and decreases, property maintenance, and overall management quality. These factors contribute to a perceived higher level of risk, which makes securing bank financing for multifamily projects more challenging.
Market Volatility in 2023
Real... Read More >
To many, the day-to-day activities of a construction project can seem overwhelming. General Contractors and Sub-contractors alike have many different responsibilities overlapping on a daily basis. But despite all of this hustle and bustle, the quality of the project must stay consistent and is of the utmost importance. As an industry-leading general contractor, The Douglas Company values its commitments to building state-of-the-art communities, and therefore we have created our Quality Assurance Program to ensure the quality our clients have come to expect.
Our Quality Assurance Program begins when the project is designed and budgeted and continues through the lifespan of the project. Systems within the program, such as inspections, are essential to the long-term quality of the project and go hand-in-hand with our commitment to proactive attention-to-detail and execution.
In an effort to be as proactive as possible, quality inspections are completed with each task in order to catch small issues before... Read More >
In the Pre-Construction Department, we often get asked about when’s the best time to price a new project. I’ve recently returned to the department with my latest promotion and have already been asked this question several times. While I often joke about looking to my Magic 8 Ball for answers, we can also look to market conditions for hints of what the future holds.
RISING COSTS CONTINUE
We need to look no further than our pocketbooks to know that the costs of everything are still going up. However, the increases we are seeing today in 2023 are nowhere near as extreme as the price escalations we saw in 2021 and 2022. While we are still receiving notifications from manufacturers and distributors about potential price increases, it’s with less regularity than in the recent past. History tells us two things: the first is that not... Read More >
With three kids in tow, I’m not nearly as productive as I’d like to be when working around the house. There’s only so many hours in a day and while slowing down to involve them is 100% necessary, it can also be very challenging. For the past few weeks, we have been trying to install a fence to prepare for the goats we’ll be getting -- at the kid's request, of course. Kade, Kinsley, and Kam like helping, and swinging the hammer when we get a new post set is what they enjoy most. They’ve all watched me pound nails in a hundred times and love to get their own opportunity to do the same. This particular story starts with Kam’s turn -- he’s three, for those keeping track.
Imitating me, he held the horse shoe nail up on the post to fasten the fence; he swung the hammer and... Read More >
A common sentiment we seem to keep hearing is, "We're holding on any new development until construction costs come down." And while we know it will be fantastic when that day comes, the question of when that will be hangs heavy. Recent data tells us… something, right?
Unfortunately, we’re not seeing much relief anywhere right now. Things don’t seem to be getting worse, but they’re not getting better either. It seems that we are all still waiting for that “bottom falls out” moment, which hasn’t happened yet and some construction economists are backing off on predicting when it will. Predictions have shifted a possibility of the “Soft Landing”, which doesn’t really help prices. Recently The Douglas Company attended National Construction Financial Management Association (CFMA) Conference where their spoke, with the sentiment "It's going to get worse before it gets better," and "Recessionary conditions will prevail at some point over the next... Read More >
This year kicked off with promising developments and displays of artificial intelligence (AI) – namely programs such as ChatGPT and Remini. From software developers to photo editors to writers, there has been a question of what role this technology will play throughout their respective industries. And while the construction industry is historically slow on the uptake when it comes to technology, it’s clear that artificial intelligence is here to stay and is already making waves.
As a whole, AI is a technology that uses large amounts of data to solve problems, but where does that fit into the future of preconstruction?
Well, in reality, a form of AI has been involved in pre-construction since the mid-2000s: Building Information Modeling (BIM). The technique of clash detection is a model that combines the MEP’s structural, and architectural plans into one digital model allowing the design team to address conflicts between the various... Read More >
The call from my superintendent came in at about 7:00 am. This was a little earlier then our normal daily call, so I knew something was wrong. Upon answering the phone, I was immediately informed we had a plumbing leak. I asked where the leak was and my superintendent answered “In the model unit.”
The model unit was fully furnished and it was where the sales staff gave daily tours to prospective residents. To make matters worse, the facility had their grand opening scheduled in just a few days. Multiple members from the owner’s company would be at the grand opening and would be touring the model unit.
We quickly reviewed the damage and discussed what trades we would need to get scheduled to make repairs.
We would need the plumber to fix the leak, the drywaller to replace the damaged drywall, the insulator to replace the insulation that had gotten wet, the... Read More >
Over the past few years, there have been frequent discussions with our clients related to what we are seeing in the market when it comes to material and subcontractor pricing.
Since the pandemic, material pricing has been an extremely volatile part of our industry. These changing conditions have required everyone to adopt various strategies to get deals done. These strategies range from forms of procurement to combating escalation and much more.
As you can see in the table below from US Bureau of Labor Statistics, pricing is up substantially from where it was pre-pandemic. Overall project costs are up over 34% depending on type of construction. The table also indicates that continuous inflation has had a heavy impact on construction costs. According to the US Bureau of Labor Statistics, the dollar had an average inflation rate of about 5.53% per year between 2020 and today. The result has been a... Read More >
I heard a quote recently that stuck with me: “We cannot change the direction of the wind, but we can adjust our sails.”
Whether it’s the sea breezes off the Atlantic Ocean or Gulf of Mexico, storms coming out of the Caribbean, or fronts dropping in from the north, the winds in Florida are continuously changing. Adjusting for changes in the construction industry can be a lot like adjusting your sails for the wind.
For example, on June 1, 2023, a significant number of people boycotted work, travel, shopping, school, etc. in protest of Florida Senate Bill 1718. I spoke with several contractors who work around the state and all confirmed what we were seeing on our projects as a result – manpower was down 50-75% in a single day. Situations like this affect our projects, changing rapidly without notice – just like the Florida winds.
So, the question is: What do... Read More >
When I googled Whac-A-Mole to see if there was a “definition” beyond the arcade game most of us are familiar with (and to confirm the game did not have the letter K in its spelling), the internet did not disappoint...
Here it is:
A situation in which repeated efforts to resolve a problem are frustrated by the problem reappearing in a different form
If that doesn’t illustrate the overall theme of new construction development projects over the last couple years, I challenge you to find a better analogy.
I’m sure you’re probably thinking, “when exactly HASN’T it been a game of Whac-A-Mole when developing new projects?” There has always typically been one hurdle or another that is slowing down or preventing projects from proceeding or at least making us (Owners, Architects, and Contractors) think a bit harder on how to get it done. Instead... Read More >
To be honest, until recently I hadn’t given much thought to long term health care… That changed when my mom was admitted to the ICU and told she wouldn’t be able to live alone in her house anymore.
Now, I think about it a lot.
I’ve always had this picture in my head that when my parents got older, they could just move in with me and it would be no big deal. After all, it’s just another adult in the house right?
Turns out, it’s a bit different than that.
First, my mom doesn’t function like she did before she was admitted. Before, she could cook on her own, do her own chores, and take care of herself. Now, she has lost a lot of strength, has difficulty walking anywhere on her own, and she should be supervised while she’s moving about.
Second, I never imagined the amount of knowledge I’d need regarding medications.... Read More >
When it comes to anchoring building components in wood-framed structures, there are two primary options to consider: conventional hold-down hardware and new tie-down offerings from either QuickTie or CLP. While both methods have their advantages and disadvantages, the trend in the framing world seems to be pushing more toward the new tie-down systems.
Conventional hold-down hardware typically involves using screws, bolts, straps, and lots of nails to secure the hardware to the framing components. This can be an effective method, but it can also be labor-intensive and time-consuming, especially when dealing with larger or more complex wood-framed structures. In addition, the use of traditional hardware can sometimes lead to damage or deformation of the material being held down, especially if excessive force or nails are applied or installation is sloppy. Also, traditional hardware has little flexibility on tolerances and does nothing to address wood shrinkage and building settlement.
Quick tie... Read More >