What’s really happening with mid-market senior living?

The Douglas Company has done a lot of work on developing Mid-market senior living prototypes that are cost-effective, functional and durable.  Though we have expertise in senior living construction, we are not experts in the operations of these communities.   So while we can attack the cost of the physical plan, which is really is only 10% of revenue, it's a small part of the solution.

At the NIC Conference, people talking about how to serve the mid-market, but only one had a prototype.  It was intriguing and thoughtful and we are studying it further, but there was limited other focus on this market from what I saw.  NIC had a session specifically devoted to this, and there were a number of statistics I wouldn’t normally consider impacting current and future demand for this product, such as the changing demographics related to marital status, location relative to children, changing health-related factors, and...

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The Forgotten Middle

A lot of solid data has come out in recent months from NIC regarding the senior middle-income population that will not be able to afford private-pay senior housing and care options, nor will they qualify for Medicaid.  It is concerning because that is such a large percentage of the country’s population.  Per the NIC report, the number of middle-income seniors will nearly double to 14.4 million by 2029.  It is predicted that over half of them will not have the financial resources for senior housing and healthcare as it is priced today.

There was a great session at the NIC conference in Chicago recently discussing this topic.  It is a private sector issue to tackle in regards to developing more affordable housing communities.  It is a public sector issue to tackle by developing tax incentives targeted to the middle market and possibly expanding Medicare coverage as well as subsidy programs to...

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High Performance

The key that is often overlooked as to why certain construction company’s projects succeed more frequently and sustain long term success, is the proper alignment of each project team on a daily basis.

To help with team alignment, at The Douglas Company internal daily huddles are conducted throughout all levels of the organization to help foster shared goals, a common purpose, facilitate clear communication, resolve conflicts, and align behaviors.

These daily huddles ultimately enhance performance, get everyone working together, and playing from the same playbook of contributing to each team’s success. It’s what keeps the business running and employees productive and empowered. Holding a daily huddle is perhaps the most important tactic a business can employ to help their company leaders and associates stay focused.  

Each morning at The Douglas Company our huddles confirm and give updates on daily projects and priorities. This meeting rhythm makes us accountable to each other, to...

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Robotics in Construction

With a continued labor shortage across the country and no signs of change in the near future, some firms are looking to/have implemented robots into their workforce to help combat this issue. Robots in their present capacity are being used to perform repetitive tasks like laying brick, tying rebar, hanging drywall, etc. They are also performing demolition, 3-D printing, and assisting with lifting activities. In 2018 the construction robotics industry was roughly a $23 million market, however, this market is being forecasted to grow to nearly $226 million by 2025 according to the article by Tractica. Some of the benefits being reported by those utilizing robots are increased speed and efficiency, higher levels of safety, and the ability to integrate with design software such as BIM. As one who has never had robotics performing labor on a construction project, I am looking forward to experiencing it and to what impact...

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The Productivity Problem

Construction is an industry obsessed with productivity - And for good reasons. The more productive our field operations, design teams, and management work is, the faster and less expensive the projects are. Unfortunately, construction has suffered from losses in productivity over the last decade, particularly at the field level. Major trades like framing, drywall, and concrete are slipping several percentage points.

This phenomenon is attributable to many factors, but several key ones include:

  • Changes in Scope and/or Project Expansion - No matter how well you plan a project, changes happen - And they slow things down. The Independent Project Analysis Group has estimated by a study that more than 35 percent of all construction projects will incur a major change. They've also concluded that any change puts the project at a 1 in 4 risk of schedule slippage by 20% and a 1 in 4 risk...

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Senior Living Renovation is an Investment, Not an Expense.

With the number of new senior living communities recently opened or currently under construction, there is a growing need to update and refresh existing facilities to help improve their viability in the marketplace. 

As new senior housing communities, with all of the latest amenities and design trends, are coming online, older facilities need to position themselves as the better local option. The appearance and freshness of a community can have a significant impact on many aspects of a business. Having an attractive, appealing, and comfortable community can improve resident’s happiness and well-being, increase staff morale, and create a more positive public opinion, all which lead to increased occupancy and better financial performance of the community.

Investing in a renovation project can be a challenging process that can seem overwhelming and complicated.  The Douglas Company team has experience in planning and executing renovation projects.  We know and understand the unique requirements that skilled...

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The Great Depression’s Impact on Senior Living Occupancy

All of us in the senior living industry understand that inventory growth has exceeded demand, causing vacancies to rise.  I was at a recent symposium and one of the speakers said that the decline in demand was caused by the great depression, an intriguing concept.  Research indicates that from 1927 to 1933 that birth rates decreased by more than 425,000, over 15%.  This would certainly impact demand, it seems.

The speaker then said that this reversed in the 4th quarter of 2017 and that demand was picking up.  A study of US census information shows that it started picking up in 1937, escalating significantly through the start of world war two.  1937 was 82 years ago.  The average age for entry to senior living communities is 84 according to most of our clients.  This would mean there may be a little more time to wait for a resurgence of demand, unfortunately.'

Peter...

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Success!

The key for every company to continue to be successful is to constantly raise your company standards. Truly great companies understand the difference in what should never change, and what should be open for change.

Every high achiever who wants to be successful wakes up early, works late nights, weekends, and even holidays, but hard work by itself will not provide sustainable success. Success can be defined in thirteen (13) words “do all the crap you do not feel like doing on a daily basis”. By doing this consistently, success will be much more attainable.

Customers love consistency. It provides the true foundation of trust and that comes from having the discipline to follow processes and to constantly work at improving those processes that are being followed.

Brian McCarthy
Executive Vice President, Midwest Construction Operations
The Douglas Company

...

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5 Trends to Look for in Commercial Construction in 2019

In what has been a historically slow adapting industry, we are beginning to see some evolving trends to traditional construction. Below is a list of trends to keep an eye out for in 2019 and beyond:

  1. Modular Construction: The modular construction market is projected to grow at a compound annual growth rate of 6.9% from $112.4 Billion today to $157 Billion in 2023. This large growth is being driven by the reduced skilled labor force.
  2. Technology assisting human workers: There are subcontractor’s that are beginning to utilize robotics in assisting and working alongside their human workforce, whether it be tying lifting items, increasing productivity, etc. Those utilizing robotics believe they are reducing the physical strain on workers allowing them to prolong their working careers, as well as, reducing the repetitiveness/redundancy allowing workers to do more meaningful work.
  3. Design-Build’s Growing Popularity: FMI is predicting spending on design-build to increase around 18% in the...

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Punch Lists and Technology

A lot has changed with the rise of Construction Technology (“Con-Tech”), but one thing is still the same: The end of any job is the hardest part. There’s a lot of details to manage and stakeholders to keep communication with, all while working towards a smooth transition from our construction phase to our client’s activation and lease-up phase. A huge component of this that will forever remain a part of our industry is the punch list process. Thanks to Con-Tech, we have experienced a significant increase in efficiencies in this area. Some of these include:
  • Use of cloud-based platforms that allow continual sharing and updating of information between team and contractors.
  • With the use of new features, punch items can be added on-the-fly from any smartphone or tablet, making punch lists a continuous process throughout the job, instead of one big list at the end.
  • Bar codes and phone scanners...

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Not Your Father’s Senior Living Community

As the baby boomer generation begins turning 70, senior living providers will have tremendous opportunities.  At the same time, they will face the challenge of reinventing their business and providing innovative solutions to meet the needs and demands of this new generation. Today’s seniors are looking for options that deliver the comforts and amenities of home.  This trend is changing the design and construction of senior living communities.  Designers are incorporating more residential design elements and finishes into new buildings, resulting in vibrant and comfortable spaces that are very inviting for residents.  The buildings being designed and constructed today are not your father’s senior living facility. By involving a general contractor very early in the planning process, working collaboratively with the design team, an owner can understand costs, lead times and constructability of various design components, and have the ability to make timely decisions.  The general contractor can also provide potential alternative options...

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Economic Cycles in the Development Business

We have been a developer’s contractor since we opened over 40 years ago.  As everyone knows, our economy goes through cycles, positive and negative.  And the development economy has significantly greater swings than the general business economy.   2008-2010 had dramatic negative swings, but we have been on an upswing now for almost 10 years.  When the economy trends down, construction costs decrease, as do interest rates.  But more importantly, the rank of developers thins.  Those with limited experience and capital can’t get deals done so exit the market, while the strong take advantage of lower prices and interest rates, but also a distressed inventory, and get stronger. The uptick in the economy creates the opportunity to be active for these people, but also the perception of opportunity for new entrants to the market.  Some are well capitalized, but with limited experience and expertise, and they can get deals done with the...

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Bidding Budgets

In the spirit of being a consultant I wanted to discuss a topic that we have seen create frustration and cost money for some developers.  Bidding Budgets; or “bidgeting” as we have heard it called.  It is when early drawings are put out to multiple General Contractors for the purpose of obtaining their budget estimate which will be utilized to select the contractor for the job.  In the beginning, the intent may have been to go with the best OVERALL choice, but in the end, the contractor with the lowest budget estimate is selected to work with going forward.  This is not working on a negotiated basis, this is bidding budgets. There are inherent risks to this process and at the end of the day, it doesn’t necessarily provide you with the best price solution (one of our brand promises by the way) that you were looking to move forward within...

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Managing Chaos

The management of construction projects has become more difficult in the last several years due to the following key factors:

  • Not having adequate, properly trained, manpower available
  • Subcontractors not managing their own work
  • Higher project finish levels
  • Quality and coordination of the design documents
  • Increased levels of local and state inspections
  • Construction material lead times
All of these factors can contribute to project delays if not addressed by the project team through proactive leadership. The only way proactive leadership can have a positive impact on a project is by the project team following processes on a daily basis to help prevent daily emergencies from impacting and delaying projects. The second most important aspect of proactive leadership is increased communication by the project leaders to help create accountability throughout the project team. Without a clear path to follow when it comes to managing projects, the task of achieving the desired objectives would prove...

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Green Building Trends

Recently I read an article by Dodge Data & Analytics regarding the expected rise in green construction globally. According to the article, over half of the 2,000 respondents in The World Green Building Trends 2018 report expect to see 60% of the projects across the globe to be green by 2021. In the US, it is expected to increase from 32% to 45% by 2021. Some of the reasons for the increase include increased client demands, improving environmental regulations, and healthier buildings for residents. With the expected increase in green construction, interestingly the percentages of projects that get certified are not expected to increase. Within The Douglas Company’s portfolio, we have built one LEED Silver Certified project, the Department of Veteran Affairs in Fayetteville, NC, and two other Department of Veteran Affairs in Toledo, OH, and Rochester, NY are LEED Silver Equivalent. Our experience with LEED projects allows The Douglas Company to implement the...

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The Douglas Company. We are a Developer’s Contractor.

But what does that mean?  It means quite simply that we exclusively work with developers.  We do not bid government projects or work with large corporations, retailers, etc.  We work with developers to assist them in making their vision become a reality. Being a developer’s contractor means we have the experience, knowledge, and personnel to get involved early in projects and work on a collaborative basis with the design team and owners.  Not everyone plays well with others but when you do it on a regular basis in the conceptual stages like we do, you get good at it and see the positive results it brings to a project and all involved. If you want a general contractor to sit on the sidelines while drawings are completed and then bid on that final set of drawings you are missing out on a very beneficial strategy to save time (which is, of course,...

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The Impact of Tariffs on Construction Costs

As everyone knows, there is a lot of controversy regarding trade and tariffs.  It is impacting the stock markets both domestically and internationally, and dramatically.  Recently I have been hearing of subcontractors qualifying their bids in our Florida market for the impact of tariffs, so I decided to do some research to find out what people, including the press, are saying about the impact.  In the past year or two, tariffs have been imposed on Canadian lumber, which did affect that pricing.  This past summer, tariffs were rendered on Chinese steel, which had a dramatic effect on those prices.  The steel increases are interesting, since less than 1% of our domestic steel comes from China, and in fact, we export more steel to China than we import. But that is in the past.  The question has to be, what can we anticipate coming up in the future, and should I be...

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Delivering “Peace of Mind”

As one of The Douglas Company’s core values, “Peace of Mind” is something that we take very seriously.   One of the key components to delivering “Peace of Mind” is timely and effective communication to ensure that clients are not surprised by unexpected events, delays or issues during their project. While we cannot prevent unexpected events, clients hire The Douglas Company for our ability to foresee potential challenges to their project, keep them informed, and offer a solution to deal with situations before they become a surprise.  Many times these are not easy conversations to have with clients, but they are crucial. Part of The Douglas Company’s on-going training and development program, all of our Project Managers, Assistant Project Managers, Superintendents, Estimating Staff, Business Development and Senior Management will be participating in a 3-hour seminar focused on “Building Better Customer Communication”.  Individually and collectively, all of us are committed to enhancing our communication...

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Important Concepts in Scheduling

The project schedule is a given for any construction project. For the project team, particularly the Project Manager, it is the most important tool in setting priorities for the team. For all other stakeholders in the project, it can be an incredibly useful tool as well. In order to take advantage of this however, there are a few important concepts to understand and to ask your contractor about regularly:

  • Progressive Elaboration - This is a concept that many schedules take advantage of, it involves bringing additional detail into the project schedule as it becomes available; typically as the team comes closer to performing the work. For instance, it is not reasonable to expect a project team to have a detailed breakdown and sequence assigned to the finishes portion of the schedule at ground break, but that portion of the schedule should look much different when you're wrapping up drywall work.
  • ...

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Virtual Reality in Construction

Recently I read an interesting article regarding the implementation of virtual reality into construction. It is fascinating to think about all the changes in technology our industry has experienced throughout the past few decades, and how it continues to evolve. One of the popular trends in our industry is utilizing 3D modeling software like BIM in the design phase. It provides that added visualization element in an effort to assist with identifying clashes, as well as, providing a glance at what the end product will be. Throughout the article, it mentioned how virtual reality will take 3D modeling one step further allowing Developers, Designers, and Contractors the ability to walk through the spaces and “feel” the spaces before they are even built. This will allow for Developers to get a better sense of what their spaces will look like beyond that of a design board, set of plans, etc., which would...

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