Make the Numbers Work!

A little while back, I came across some extra marketing collateral of ours that was previously in circulation with the motto of “Make the Numbers Work.”  Some of the collateral may or may not have had an expletive gesture mixed in of “!!@!%#!!@!!”.  You get the point.

It was all good fun, and I thought it was great! 

That’s the foundation of getting a new project out of the starting blocks.  Make the Numbers Work!  Of course, a project has to pencil for it to make sense for the developer and investors. An easy way to do that is to start cutting finishes and amenities, but that will not help you compete in the market or get the rents you need.  Sometimes, it is needed to get you there, but it often doesn’t even get you a good bang for your buck. 

You should first try to attack what’s “behind the walls” to...

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COVID After-Shock

It has been a little over a year since the COVID 19 pandemic began and we are still feeling the after-effects of its impacts over the past year. With more of the population getting vaccinated and some states loosening restrictions, it feels as though we are getting back to normal but there are still many challenges upon us in the construction industry.

Material supply chain and volatile pricing continue to impact new starts with our Clients as many are eager to get shovels in the ground but we are challenged to hold pricing for extended periods of time like we could pre-pandemic. Then, if we are able to get the project going there are extended lead times that we are dealing with to hold our schedules, timely purchasing to mitigate further price increases and expedited submittal procurement are extremely important in our current...

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The Douglas Company celebrates with TLC Management, Inc. the completion of Blue Heron Health and Rehabilitation Community

The Douglas Company, an award-winning general contractor, celebrates with TLC Management, Inc. the completion of their new $34.0 million Blue Heron Health and Rehabilitation Community in Wesley Chapel, Florida.

Blue Heron Health and Rehabilitation Community features 201 residences, including 106 skilled nursing, 22 memory care, and 73 assisted living suites. Eloquently designed by Cuhaci & Peterson, the community encompasses approximately 158,971 square feet of living and communal space.  Upscale amenities include a salon, theater, game room, wellness gym, activity center, resident art gallery, library, putting green, and indoor and outdoor bistros– all conveniently located on-site.

“It was a privilege to be involved with TLC Management to build this beautiful new community that will have a significant impact on the Wesley Chapel and offers a place for seniors to call home,” said Kevin Green, Senior Project Manager at The Douglas Company. “We are particularly proud of the great work...

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Construction Costs and Operations Costs: What’s Really the Problem?

I am hearing different stories from clients in my discussions.  There is no doubt that occupancies in Senior Living are down.  There is no doubt that projects are requiring more equity, and equity demands a higher return.  There is no doubt that staffing is more difficult to find and more expensive.  There is also no doubt that construction prices have risen dramatically in the past six to eight months due to supply issues caused by a myriad of factors. 

A client said to Bob Ritter, our Director of Business Development, the other day that he couldn’t look at new construction projects because construction costs were too high.  I wonder if that is accurate.  My experience in owning Senior Living projects is that capital costs are a minor part of the total operating budget.  Operating costs are the vast majority.  So if construction costs go up 10%, as an example, it...

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The Douglas Company Announces Key Associates Promotions

The Douglas Company, General Contractor, is pleased to announce four key promotions within our Holland, Ohio office, a move that advances both our associates' professional development and the organization's growth.

"Internal succession and promotions build upon our foundation while allowing the company to evolve and grow. In their new roles, these team members will strengthen the organizational structure and effectively allow our team to focus on client satisfaction while executing our long-term growth strategy. We expect each of the key associates' leadership, experience, and vision to enhance our organization," said Peter Douglas, President of The Douglas Company.

Justin VanAtta
Project Manager

Justin VanAtta joined The Douglas Company in 2017 as an Assistant Project Manager and has since earned the position of Project Manager.  In Justin's new role, his responsibilities include managing the complete life cycle of a variety of projects and working closely with clients...

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A Brief History on Lumber Prices

Lumber - It has been the word in construction this year that we simultaneously hate talking about and can't stop talking about. At this point, anyone who has speculated on what's going to happen with pricing has been wrong at least once. While no one can predict what's going to happen, there may be some answers to find by looking at how we ended up here.

First, let's assess the current state of lumber. This information is taken from pricing and supply from several large providers we work with across multiple states:

  • The commodity index has been posting new record highs nearly every day so far this month (NASDAQ: LBS), until mid-week this week. The pace is the most startling thing here - On April 8th it passed 1100 for the first time in history then, only 7 market days later on April 19th it passed an astonishing 1300.
  • Futures are very...

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Active Adult – Leading the Way Post-COVID

Active Adult – Leading the Way Post-COVID

A somewhat new segment of rental active adult housing is showing signs of leading the way for senior living development post COVID.  Our estimating department is currently budgeting and pricing several active adult projects for multiple clients.  The product targets baby boomers in early retirement, looking to downsize, but who are years away from needing independent living or assisted living services.

Many seniors no longer want the maintenance and overhead of a large house, like the idea of increased socialization, but don’t require assistance with activities of daily living.  Active adult communities tend to command a premium over standard multi-family products, and because the residents are primarily retired, their incomes are somewhat insulated to swings in the job market and economy.  Another plus for developers, residents of active adult communities typically stay for five years or longer.

While the pandemic has impacted occupancy in all senior living sectors, several owners and operators...

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PVC Supply Chain Disruptions in 2021

While many of us in the construction industry have been focused on dealing with the steep rise in lumber costs over the past year, a new threat is upon us: PVC.  In February, Texas-based petrochemical plants were forced to shut down unexpectedly due to a winter storm that caused vast power outages. S&P Global reports that 75% of the 40 million metric tons of ethylene production were taken offline during the height of the deep freeze.  Bloomberg reports that 60% of the U.S. PVC capacity remains offline still.  According to the Wall Street Journal, prices for polyethylene and polypropylene have reached the highest prices in years.  The problem affects far more than the construction industry; reports of supply chain disruptions are coming out from industries like automotive, food and consumer packaging, medical device and supply production, and more.  Honda and Toyota have recently announced they will halt production...

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The Douglas Company is serving as the general contractor for the new $11.7 million Maumee Pointe assisted living and memory care

The Douglas Company is 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. 

Designed by Davison Smith Certo Architects, Inc., 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. Davison Smith Certo Architects, Inc....

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The Goose and The Golden Egg of Business

This past weekend I was listening to a presentation on a book many of you have heard and read, The 7 Habits of Highly Effective People by Stephen Covey; I was drawn towards a reference to an old fable by Aesop, The Goose & The Golden Egg.

The story goes like this for those who aren't familiar: A poor farmer discovers that his prized goose has begun to lay golden eggs each day. Excitedly, the farmer takes the eggs to the market and begins to get rich. With his newfound success, the farmer starts growing impatient by only receiving one egg a day from his goose and isn't getting rich fast enough. One day after counting his money, he realizes that he could get all the golden eggs at once if he kills the goose and cuts...

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Construction is underway on The Sagefield multi-family residential development in Jacksonville, Florida

The Douglas Company, an industry-leading general contractor, announces that construction is underway on The Sagefield, a new multi-family residential development in Jacksonville, Florida.

The Developer, Chance Partners, LLC, selected architectural firm Dynamik Design Partners, an Atlanta, Georgia-based company, to design the 274,590 square-foot multi-family community. The Sagefield will include 234 one-bedroom, two-bedroom, and three-bedroom units in two 4-story apartment buildings and two 2-story carriage homes with tuck-under garages.  The architecture will feature a contemporary farmhouse design, with gabled rooflines, vertical siding, and a dark red, charcoal, and white color scheme. Apartments will feature stainless steel appliances, granite countertops, smart home technology, sleek wood-like flooring, 10-foot ceilings, and upscale finishes.                         

Generous community amenities will include a clubhouse, co-working space, a 24-hour fitness center, e-scooter and bike share, a resort-style pool, an outdoor kitchen and fire pit, a pet spa, and a Starbucks® coffee bar. The landscaping surrounding the community will complete the...

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The Big Three in Building Costs

We always advocate for getting a contractor involved early in your project to help with constructability input, provide conceptual budget estimates and other milestone pricing feedback, and control costs as the design develops.  There are also three key areas that your development team needs to make decisions that significantly impact project costs. 

One of the big three is structure type.  Multiple factors will go into your decision to go with a wood structure, block, plank, block structure with wood floor trusses, steel framing, or a hybrid.  Some of these factors are building code for your particular project, your project's location, which will affect wind load requirements, maintenance of the building in the future, long or short-term hold strategy, etc. 

The second of the big three is the mechanical system you choose.  There are many factors to consider, such as cost, future maintenance costs, what your target client may prefer, the system's life...

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Virtual Inspections

COVID-19 has brought forth many challenges in the last year, and it has pushed our slowly evolving industry into adopting many new ways of conducting business, one of which being virtual inspections from our local inspecting authorities. Many of the counties that we work with have put in place some stringent requirements as it relates to social distancing and minimizing exposure to their staff on the job site. With the advancements in technology, many counties have moved to conducting virtual inspections through Facetime or a similar video call in an effort to keep the workflow moving while accommodating their new standards for employee safety. We have found that our inspections have been rather unimpeded going through this new process while it has required some additional record keeping from ourselves and our subcontractors, it has provided some efficiencies for our inspector’s where they are able...

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Generational Differences

Eleven of us (with me being by far the oldest) are taking Darren Hardy’s new leadership course, which will take all year.  The first session talked about the differences between generations.  None of it was disparaging.  We were all raised with different circumstances, so we are different.   I remember coming into the industry over 40 years ago (!!!) and hearing the older men talking about how the younger generation had changed and wasn’t worth much.  And I have heard similar things from my peers about the next generation.

But as I look at our company, I can reflect on how we have changed generationally.  My peers in the company are mostly gone for various reasons.  Burnout, death, or just losing the will to fight for our clients every day.  And the next generation has mostly taken over, with amazing results.  We had our second-best year last year.  And I’m...

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Expect Material Price Increases to Continue in Early 2021

Last week we authored a blog post looking back on pricing in 2020 and why the reduced pricing many of us were anticipating to come just never did. The question lingering for everyone in the industry now is:  What's going to happen in 2021 for pricing? Many developments were put on hold last year in hopes of better pricing this year, but will that happen? To forecast this, we're looking at the state of 3 current events: The COVID-19 Vaccine, Material Supply and Demand, and Government Intervention.

COVID-19 Vaccine

While we cannot be a source of information on the status and timing of individuals being vaccinated, we know that at some point this year, all those who want to receive immunity from the vaccine will have that opportunity. Market information sources like NIC and Senior Care Investor all agree the outlook for senior housing is positive, and the decreases in censuses...

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What Happened to the COVID Discount?

“Earlier this year, our President, Peter Douglas, posted a Blog pondering the question of how much construction prices would go down as a result of the impacts of COVID on our industry.  At the time of the Blog (May 27, 2020), we were beginning to witness the relaxation of construction material prices, particularly lumber and subcontractors cutting their prices to book work for the unknown times that lie ahead.  It was thought that this trend would continue during the pandemic and that overall construction prices could retreat 3-5%, a welcomed projection for many developers.  Unfortunately, prices have not gone down the 3-5% as originally speculated.  So what happened?

In the months following the posting of that blog, prices for construction materials and manufactured commercial building products increased due to the impact COVID had on production and transportation, compounded by demand, which remained relatively high throughout the pandemic.  An unexpected rise in...

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Getting the Right Team in Place

Due to the ongoing impacts of COVID-19, some new projects struggle to secure the necessary capital stack to move forward.  This has been more of an issue in the senior living segment than the multi-family segment; the multi-family space has remained resilient during this challenging year in regards to financial backing for new construction.  In speaking with our friends in the debt and equity circles, the money to fund new ground-up senior living projects is getting much more selective, but I am still being told “the good deals/projects find a way to get done,” that is positive to hear.

In this environment, now more than ever, developers need to have the best teams possible in place to support a successful project.  This of course, includes their general contractor, architect, and operator.  Debt and equity sources need to feel confident that the project has the best possible chance of success. The whole...

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Material Procurement Challenges

As we continue to navigate through the daily challenges surrounding us with the COVID-19 virus, it is important to understand the impacts it is having on our industry. Most notably there has been volatility with pricing, most well-known with the lumber markets, labor shortages, and extended material procurement. The material procurement issue much like the labor shortages is not a new issue upon us in the construction industry, but lead times have certainly changed from previously known and reliable durations during this pandemic. Some examples of extended material procurement issues that we are experiencing across our projects include:

  • Lumber
  • Siding
  • Windows
  • Doors
  • Shingles
  • PVC pipe and pre-molded showers

This is something that will most likely continue until a vaccination is developed, as manufacturers work through social distancing, sanitizing efforts, and infected personnel which all have an impact on productivity and their ability to fill orders timely. It’s important to stay in close contact with Subcontractors and Suppliers...

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What’s Actually Going On with Construction Prices?

It is the question everyone is asking in the construction industry right now, “What’s happening with prices, and when will it come back down?” The short answer is, no one can say for certain.

What we do know are a few key principles that can help all of us be more discerning consumers of current information:

  1. Commodity Prices do not Equal Actual Costs - Many people have taken to following publicly-traded commodity indexes to understand where things are going. While this can give us some insight; many things affect the commodity indexes besides just the actual cost of the materials. For material markets that have been hit extremely hard, turning to trusted suppliers is the only way to know where prices are and what is to come. 
  2. Supply Trumps Demand - In certain markets, such as lumber and PVC, an extreme shortage in supply is driving the price and...

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