With Buildings On The Line, Owners Look To Contractors For Peace Of Mind

Watching a building rise up from its foundations can be a stressful process for the owner even in the best of times. In 2020, the construction process has become even more fraught as developers have had to reconfigure plans and make preparations to open in the midst or aftermath of a pandemic. 

To deal with uncertainty through the development process, particularly during the coronavirus pandemic, owners have been relying on their contractors to adjust to ever-changing requirements, make their projects more efficient and provide a degree of calm and consistency. Some of the nation’s largest and most established construction companies are seeing clients place value not just on their ability to deliver the project, but also on their ability to withstand and assist them throughout the current crisis.

“When a business is under stress, the need for certainty is heightened,” said Don Adair, executive vice president at Swinerton, a general contractor founded in 1888 that ranks among the 20 largest construction firms in the U.S. “Owners are now looking for a business partner with expertise, financial stability and one that’s going to see the obstacles and challenges from their perspective.”

Adair described how owners, especially those in hard-hit asset classes like hospitality, retail and aviation, are looking for contractors who have the flexibility and the capabilities to make rapid and sometimes radical changes to their ongoing building plans. But with the construction industry facing unprecedented levels of uncertainty over the coming years, they are also looking for companies that can weather the storm and be poised to help them down the line as their markets recover from the pandemic. 

Value engineering — choosing building techniques, materials and finishes that streamline the budget for new buildings — has been a commonplace practice for decades, but the pandemic has led owners to ask their contractors for even more drastic measures to drive value. On projects at hotels and airports, Adair said, Swinerton has completely re-phased entire projects to shrink construction timelines and gain both cost and schedule efficiencies by taking advantage of lower occupancy levels. 

At a residential tower project in Washington, the owner looked to Swinerton for advice on how to boost long-term net operating income. The team at Swinerton reworked the unit mix and layout to better align with the latest demographic expectations and was able to add a unit per floor to the building design, which Adair said will help drive up revenue for the project’s entire life span.

“It’s critical that we take a fresh approach that is aligned with an owner’s goals,” Adair said. “Nothing is set in stone. We can’t be hesitant to take a unique approach to our projects based on changing economic conditions. We have to be flexible.”

Some owners are electing to consolidate individual projects under a single company’s umbrella, reducing the logistical burden of construction coordination and minimizing the variables and corporate touchpoints. Consolidation can also increase buying power, cost efficiencies and certainty during the pandemic. 

For owners, part of the advantage behind choosing a larger general contracting firm is stability: Firms and their trade partners must be able to weather the storm and the economic stresses the coronavirus has generated. In previous recessions, Adair said, construction companies have tended to fail early in the recovery; they take on more work than they can effectively manage during the bottom of the market on razor-thin margins, then become overburdened and run out of cash, forcing them to close.

“We put a lot of effort into keeping our relationships with our trade partners current and strong,” Adair said. “We’re diligent in how we scope and package the work by aligning the trades for the best overall project success.”

The same philosophy applies to Swinerton’s relationships with materials suppliers. With supply chains interrupted around the globe, construction firms have struggled to procure materials in a time frame that supports their projects. But a dedicated procurement team with national agreements with global suppliers have kept Swinerton’s procurement chains largely intact, Adair said, which can keep clients’ projects on track and on budget.

Most of all, bringing peace of mind to owners is driven by an account mentality rather than a single project mentality, making the contractor an extension of the owner’s team. Having a full suite of services from design, pre-construction and in-house self-perform trade capabilities means that Adair and his team can take orders for a building nearly wholesale.

“Our national clients count on us to deliver our entire range of services across the country,” Adair said. “They know that whether it’s up and down the West Coast, across the Midwest or Southeast and soon in New York, they get the same service, the same technology, the same safety and quality protocols that they’ve come to trust for years.”

This feature was produced in collaboration between the Bisnow Branded Content Studio and Swinerton. Bisnow news staff was not involved in the production of this content.