How much will construction prices go down in the current COVID-19 recession?

The current slowdown is unfortunate in its cause, with all of the people suffering from the virus.  It is hugely disruptive to all of us both professionally and personally, but it is the reality.  Though this arose fairly quickly, our clients are intelligent, optimistic, and focused and are already asking how much prices are going to come down and when.

The best predictor of the future is usually the past, so I did some research.  RS Means, a widely respected resource for pricing in our industry, reports that the 2008-2010  recession had stable pricing, not decreasing.  I think we all know this isn’t right, so I checked the Turner Construction Company historical index.  It seems more realistic, reporting an 8.4% decrease in construction costs in 2009 and a 4.0% decrease in 2010 for a total of 12.4%  This seems more accurate.  All recessions are different.  There was a milder recession in...

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The Douglas Company announces that construction has begun on The Grove at Trelago

The Douglas Company, an award-winning Orlando, Florida based general contractor, announces that construction has begun on Vestcor Communities' newest $21 million assisted living and memory care senior housing community. The Grove at Trelago will be located along Maitland Boulevard east of I-4, with the elegant backdrop of Lake Charity.

This luxurious 113,989 square-foot assisted living and memory care community designed by PQH Group Design Inc. will be comprised of 96 assisted living units, 20 memory care studios. The Grove at Trelago will boast spacious, well-appointed studio, one and two-bedroom assisted living apartments as well as private memory care residences. The expansive resort-style community will include a fitness and wellness center, movie theatre, multiple dining options, a beauty salon, a grand atrium staircase, and areas for social and educational programming. Outdoor amenities include a resort-style pool, plantation-style porches, luxuriously landscaped courtyards, a putting green, outdoor fireplace, numerous water...

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Turning the Corner

Turning the Corner in design for senior living

Who is ready to turn the corner on everything that has been in front of us in the last couple of months?  I know I am.  While The Douglas Company has been fortunate and grateful to continue operations as an essential business during this pandemic, it has, of course, prevented me from getting out and seeing clients, prospects, and my networking partners, unfortunately.  As I’m sure many can relate, Zoom is just not the same!

That being said, and while it could have spawned from better circumstances, there will be some interesting and exciting times ahead for the design and construction of multi-family spaces in particular senior living communities. 

We have been busy in our estimating and pre-construction departments assisting clients with conceptual budget estimates and value engineering as usual and look forward to seeing more and more creative ideas on how to address health crisis type issues that can...

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BIM

What is BIM? BIM stands for Building Information Modeling; essentially, it is a software that allows the entire project team to integrate their respective components into a 3-D model. When appropriately used it can help streamline not only the design stage of a project but also the build of a project. Some of the advantages of BIM include better visualization of spaces before they are constructed reducing the amount of changes during construction, increased coordination and clash detection which can save time and avoid costly rework, increased productivity through the utilization of prefabrication, safer projects, and ultimately a higher level of quality throughout the building. Some of the disadvantages to BIM are it can be costly and lead to additional time in the design stage of the project, as well as, finding subcontractor’s/firms that are experienced in the software can also be challenging. As our world continues to evolve through...

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Third Party Plan Reviews & Inspections

One of the biggest challenges the construction industry has faced over the past few years is the ever-increasing difficulty to have project plans reviewed in a timely manner, with a fair and reasonable critique of the documents for code compliance, and at a reasonable cost.  Further frustrations have been experienced in dealing with building departments having a shortage of qualified building inspectors to conduct timely onsite building inspections when the contractor schedules them.  This all led Florida to pass legislation allowing for developers to use private, third-party plan review and building inspection services.   Florida Statute 553.791 passed in 2019, allowing developers to hire a qualified independent provider to review their plans in place of the traditional route of submitting them into the local building department.  It also permits the developers to hire independent providers for building inspections instead of relying on the often overburdened local building department officials. 

In addition to...

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COVID-19 Impacts on The Construction Industry

The COVID-19 pandemic has the spotlight of construction industry news across the county right now. Rightfully so, as it has been extremely disruptive to developers, contractors, and suppliers alike. While there is great debate on how to address the spread of the disease, all of us in the AEC industry are trying to determine what we should be paying attention to. For those involved in a large construction project presently, no matter what role, it is suggested to think about a few things:

Safety Measures - By now, most of us are familiar with the term "Social Distancing" and the importance of handwashing, but there is more than that. OSHA has devoted a separate webpage for the standards from 29 CFR that apply to this outbreak and reminded us that this is a recordable event. Do not count on anyone to provide these measurements for you or your associates;...

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The Douglas Company Coronavirus Response

A Message from Our President, Pete Douglas

Our number one priority at The Douglas Company is to support the safety and well-being of our clients, associates, families, and communities while maintaining the highest level of service. As COVID-19 impacts us all nationwide, we’d like to take the time to inform you of the steps that we are taking to ensure continuity of service as we protect our clients and associates. Our goal is to do our part in the global community to prevent the spread of the virus, while still providing our clients with the highest level of service we can under the circumstances. Each one of us must do our part.

To ensure an appropriate and timely response to a quickly evolving situation, The Douglas Company team will continue to monitor COVID-19 coverage closely, adapting as needed to the evolving situation and keeping clients and associates informed of our company’s response....

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Active Adult Senior Communities

As I talk with both senior living and multi-family developers, there is a big focus and many questions relating to “active adult” or “age-restricted’ apartments.  It makes sense for many reasons, but the average age of entry stands out the most.  Today the average age at which a person moves into traditional senior housing is 85, with an average length of stay just over six years.

The move-in age for active adult communities is in the low to mid-70's.  The oldest members of the baby boomer generation, those born in 1946, are just now turning 74.  This creates a true opportunity to capture a younger senior demographic ten years earlier than traditional senior living facilities.

Boomers considering active adult communities prefer renting over owning to provide them with economic and logistical flexibility.  They are attracted by a sense of community and are healthy enough to not need traditional care-based senior housing.  At...

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A Developer’s Contractor

Last week I was sitting in a presentation with an experienced developer for a project we will be starting soon.  This same developer is currently building a facility in Columbus, Ohio, with an institutional contractor, which is not going well.

Over and over, he said, "how much of a pleasure it is to be working with a developer's contractor." We are one, but sometimes I forget what it means.  In this case, the client's architects and engineers completed the drawings and added all kinds of things that were nice, but didn't add value to the project or its future residents.  With our experience in senior living, we are able to control cost by weeding out what was not required, and we have the technical expertise to communicate effectively with the design professionals with minimal involvement from the client.  But there are other things we do, such as keeping up a...

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What Should Senior Living Construction Really Cost?

After years of attending the NIC and ASHA conferences, I feel a need to shout out about the construction costs that one of our competitors supply to them for senior living.  Frankly, I don’t know how anyone could make the numbers work for a project with the costs that they promote.  First of all, construction costs per square foot are probably the wrong numbers to be considering when developing proformas.  Cost per unit or cost per bed is what matters because revenue is based on cost per unit and cost per bed.  Cost per square foot can be an extreme variable depending on space usage.  As you can imagine, as an individual room increases in size, the cost per added square foot isn’t much.  So larger units cost less than smaller units on a cost per square foot basis, but the incremental cost per unit is not that much different. ...

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Construction Begins on Maumee Pointe Assisted Living and Memory

The Douglas Company will be serving as the general contractor for a new $11.7 million assisted living and memory care project that recently began construction. Maumee Pointe assisted living and memory care will be located at 1050 Medical Center Pkwy, Maumee, Ohio. 

Maumee Pointe will be a 69,310 square-foot assisted living and memory care community, developed by Sage Real Estate Development of Rochester, New York. The new senior living community will consist of a single-story building, including 22 memory care units for individuals with dementia-related conditions, and a two-story assisted living building offering 58 one-bedroom suites for those needing assisted living services.

Amenities at Maumee Pointe will include an arts and crafts area, spa, chapel, bistro and dining area, wellness center, sunroom, and lounges. The exterior layout consists of two courtyards, a fire pit, and a greenhouse. The new senior living community was designed by Davison Smith Certo Architects, Inc. to...

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Rising Development Costs

There was a recent article in Senior Housing News that discussed the rising development costs in senior housing being to the tune of a 6.4% increase last year according to a report created by CBRE.  During the same period, which was 2019, the average number of units per project decreased to 106 from 128. 

As you can imagine, two primary drivers of this were a robust construction market and the increasing labor expenses.  This isn’t necessarily new as the article also confirmed that overall U.S. construction activity has mostly increased over the last ten years, which thanks to the laws of supply and demand drive up material costs regularly. 

It was interesting to note that site acquisition expenses represented 10.1% of development costs and that the average site area decreased 15% as demand for good sites increased significantly in metropolitan areas. 

So this trend is not just about senior housing exclusively as the...

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The Douglas Company Promotes Leadership Within – Jeremy Bartolovitch Named Vice President of the Southeast Region

Vice President of the Southeast Region

The Douglas Company, General Contractor, is pleased to announce the promotion of Jeremy Bartolovitch Vice President of the Southeast Division located in our Orlando, Florida office.

Mr. Bartolovitch began his career with The Douglas Company in 2008 as a Project Coordinator progressing to Project Estimator, then Senior Estimator was later promoted to Chief Estimator, and has since earned the position of Vice President of the Southeast Region. In his role as Vice President, Mr. Bartolovitch is directly responsible for the construction and successful completion of all projects and operations in the Southeast Region.

"Jeremy has excelled during his time with The Douglas Company, and is a proven leader who has been dedicated to the success of our company and our clients since he joined our team," said Peter Douglas, President of The Douglas Company. "He has earned this promotion through his focus on growing our business, his expertise...

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Mid-Market Musing

I learned early in my career how little I know.  Though we have built more senior living than anyone I know and have been exposed to very successful senior living developers and operators, they all operate differently.  Someone recently said to me, “An expert is someone who knows more and more about less and less until eventually, he knows everything about nothing.” But I don’t think that is the case in my situation.  It’s just that there are a lot of ways to be successful if you know what your Hedgehog Concept is, as Jim Collins would say.

Mid-market became a newer thing a couple of years ago.  They often say what is old is new, and this might be one of those situations.  We, in conjunction with a number of clients, are working on several mid-market concepts.  They hearken back to the eighties when this industry was starting, and people’s...

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The Stepping Stone for Baby Boomers

The “Silver Tsunami” of Baby Boomers is not knocking on the door of assisted living communities just yet and still has several years to go before they are.  So how are senior living developers going to entice these folks to leave their homes?

A recent article in Senior Housing News noted that in a survey of 120 senior housing professionals, 87% of them responded that they are currently pursuing active adult apartment projects.  They see the need for a stepping stone so to speak; getting seniors to leave their homes that are nowhere near ready to move into an Independent Living community much less an Assisted Living community.  Seniors in this segment are still looking for active, vibrant lives and are not ready to see what the future looks like by living in communities where they would see just that. 

If seniors can stay in place longer in these communities with the...

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Exoskeletons in Construction

When you hear the word exoskeleton you probably start thinking of something out of a sci-fi movie like Alien or Avatar, but they are starting to make a presence in construction. Exoskeletons or exosuits are a wearable technology typically made from metal and other fabrics that attach to the body. They are aimed to help lessen the strain on workers' body allowing them to work quickly and safely while reducing injuries. With the potential to reduce required muscle force by as much as 60%, it’s easy to see what kind of an impact this technology could have on workers by easing the physical demands that come with the job. Currently, there are two (2) main types powered and mechanical (passive), and over five (5) main categories for these power suits: power gloves, arm/shoulder support, back support, standing/crouching support. As this technology continues to evolve it will be interesting to see...

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The Douglas Company celebrates the completion of construction on All American at Kingston

The Douglas Company, General Contractor, celebrates the completion of construction on its seventh project with owner, Kaplan Development Group, LLC. The $13.4 million, All American at Kingston, is a 58,000 square-foot, 112 bed assisted living and memory care community located in Kingston, New Hampshire.

All American at Kingston was designed by EGA Architects and boasts several in-house amenities including a full-service kitchen, country kitchen, salon, bistro, media room, parlor, library, arts & crafts room, and an interior courtyard. The building is metal-framed and constructed on a slab on grade over a standard spread footer/stem wall.  The exterior is finished with two types of Hardie siding including lap boards and “cedar” shakes, with a mix of EPDM and asphalt shingle roofing. 

“The Douglas Company team displayed a high level of professionalism, experience, and dedication, along with a commitment to quality throughout construction. They cultivate a teamwork environment working with our project team to...

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