Construction and Development

5 MIN. READ Across the United States, businesses' supply chains are stretched thin and are experiencing isolated disruptions. The worry is that these disruptions are becoming more frequent and widespread. This is especially true with HVAC commercial technicians, who need to build contingencies into their plans in order to create a sustainable supply chain to protect their business and customer base. COVID-19 spawned a three-headed monster Labor shortages The United States lost approximately 10% of its workforce in 2020, and while the employment rate was recovering as of September 2021, it still was below the pre-COVID levels. Increasing levels of technology in manufacturing caused a labor shortage before COVID, but the pandemic made it worse. In particular, the production of microchips, crucial to HVAC controls, declined drastically. Globally, employment shrank by the equivalent of over 255 million jobs. The impact was felt heavily in China, a key producer of equipment and supplies used in the HVAC business. Overall, industrial production still lags behind demand. Commodity price inflation A surprisingly rapid economic recovery coupled with shortages due to decreased production caused copper, steel and plastics to surge by 100-300% depending on the commodity. Since the materials are heavily used in HVAC equipment like compressors, air handlers, copper tubing, and other parts and supplies, the surges translated into higher prices and shortages for those items. The shortages are expected to continue in the mid-to-long term. Transportation breakdowns The shipping industry, which moves the vast majority of the world's goods, contracted in the aggregate......

We dive deep into the Top 5 exterior value add projects in multifamily real estate that have the greatest return on investment. You don’t have to do interior renovations, except make the units really clean, if you’ve done great exterior upgrades. You’ll never have a shot at leasing to that tenant if they don’t love the outside while driving by. We brought in the creative value add master himself, Jason Schaller, to give us his Top 5 value add ROI projects in multifamily real estate. If you’re an investor in the central and north Florida markets and you don’t know Jason, you sure as heck should. Jason Schaller is the Founder and Principal of The Schaller Group, a design, construction, and creative agency. He is also a partner with Peacock Capital, a multifamily investment company that has purchased and operates 33 apartment communities totaling 1,300 apartments in just the last 5 years with 500+ additional apartments under contract and 5 development sites in the early stages of development. I’ve had the pleasure of brokering a number of those deals with Jason and his partners. Prior to forming The Schaller Group, Jason was Vice President and Managing Director at McKinley, Inc., a $4.6 Billion Dollar real estate company based in Ann Arbor, Michigan where he worked for over 18 years. He was responsible for leading property management operations, sales, marketing, branding, due diligence, acquisitions, design, construction, and redevelopment throughout McKinley's National Real Estate Platform. He was directly responsible for the operations of a 12,000+ Uni......

I have some very strong predictions about whether there will be a multifamily real estate housing crash in 2022.

Will there be a multifamily real estate housing crash in 2022? Hell no! Here are the reasons:

• We need to build 325,000 new apartment homes each year on average, which we haven't done since 1989. We only did 289k in 2020, which was an extremely active year by any standards.
• We need to build over 4 million apartment homes by 2030. And another 10-12 million apartments need renovation during that time. We aren't even close to being on track.
• Immigration is predicted to account for half of all new U.S. population growth through 2030 and immigrants mostly rent.
• For millennials 22-37 most common form of living is renting.
• Seniors are choosing the convenience of apartment living over ownership.
• Renters in the U.S. are near 39 million people, which is about 1 in 8!
• Even if home prices flatten or go down in 2022, which is highly doubtful, they still won’t go down anywhere near enough to then shift renters to buyers.

Hear more in the video: 

 

 

 

People hear me say it all the time: Culture is the single-most important element in the success of a company.  The blueprint to cultivate that culture, however, can vary widely as no one-size-fits-all solution exists. Today we’ll examine the differences between creating culture at a new company as opposed to an established one. While they are separate challenges, each presents a unique opportunity. Organizational leaders might have to go about their culture-building initiatives differently in each case, but the prospective benefits can propel the company to its true potential and perhaps beyond. In either case, it begins with a strong foundation. I liken building the culture of an organization to developing the foundation of a large building. Components such as concrete, metal, gravel, wood and weather-proofing materials each serve a singular function, but when you combine these critical pieces, it enables the foundation to become strong enough to support the weight of the building. The strength of the cultural foundation is critical to supporting the structural edifice of the entire organization—not just in the early stages of the company’s growth, but for the years and decades to come. Here’s a look at some of the nuances of creating effective cultures at new and established companies:  A new company Naturally, the primary advantage of creating a culture at a new company is that you can start from the ground up. No inherent flaws or biases exist within the workplace and you’re operating with a clean slate. You can create the culture based upon any ......

Workforce housing is not to be confused with affordable housing. The best definition for workforce housing is “housing that is affordable to households earning 60 to 120 percent of the area median income.” However, that median may vary by state. Unfortunately, major metros still struggle with filling the gaps with workforce housing programs. Recently, housing prices have outpaced income in many major metros around the U.S., causing a housing shortage for those trying to find affordable housing close to their work. The housing crisis has been discussed extensively by politicians and economists alike. From connecting investors with developers to partnerships between building owners and tenants, creative programs can help combat the workforce housing shortage in major metros. Let's look at some of the solutions that experts feel can help keep the workforce housing shortage under control. 1. Leverage technology that helps developers build faster for less New construction technologies and structural frames may be the answer to building better and faster. Innovative materials may also prove to be more affordable without sacrificing durability and quality. 2. Remove administrative and regulatory barriers that make it challenging to build more homes and apartments cost-effectively A good place to start would be automating the local, state, and federal systems that analyze the planning and zoning codes and reducing processing time. If the processing of legal analysis could be shortened from months to weeks or days, less time and money would be wasted waiting on whether housing can be built on a particular property. 3. Pro......

    Pre-leasing can make or break the success of a new apartment community, especially in today’s competitive multi-family market. Adding assets like 3D modeling, virtual tours, and interior renderings allow developers, property managers, and real estate marketing leaders to create more interest in their properties before the construction process is complete.   By using these tools in your marketing plans and content you are able to connect with future renters and give them the visual information they need to make a decision on whether or not your property is the right fit for them at an extremely pivotal time in their buying journey.    1) Why Would I Want a Virtual Tour or Interior Rendering? The obvious answer here is that it is literally impossible to showcase what your spaces will look like without these assets while your property is being built.  3D floor plans, virtual tours, and interior renderings give you access to digital assets that can accurately and effectively present your property's key features when it is physically impossible to show them.   2) What Makes a Good Virtual Tour or Interior Rendering? Accuracy. The purpose behind creating these assets while your property is still in the construction or developmental phase is to accurately present what the interiors and exteriors of your spaces and units will look like. The idea here is to be as close to a real photo or video as possible. Having photo-realistic visuals ensures that what future renters are seeing matches what they wil......

Why Designing Modern Properties Requires Thoughtful Access Control   Until recently, access control into and around rental properties was considered a basic necessity, a line item that didn’t need any in-depth thought or design work. As long as locks took keys, intercoms buzzed people in, and keypads worked with codes or fobs, access control remained an integral — if not unremarkable — property design element.   But technology is changing all that with connected solutions that enable modern necessities like keyless curb-to-couch entry, secure package delivery, and unattended showings. These indicate that rental property management staff and owners should expect access control to be both a necessity and an amenity. The good news is that it’s relatively simple and cost-effective to implement new connected access systems into new construction and existing buildings.   How to Think About Access as Part of a Property’s Natural, Unique Layout   Below are some of the most common use cases we saw in 2020 that we think will continue to grow in 2021, along with insights around feasibility and ROI.   1. Resident doors: Keyless locks at resident doors not only enable a smart property experience for residents, but also provide major conveniences for both residents and property staff. For one, connected keyless entry makes easy-to-lose physical keys unnecessary. This eliminates the costs for key management systems and the time and money spent managing keys — which can take upward of 20 minutes per work order. It also removes the liability, safety, and cost issues that come up whe......

If you were to ask my take on vertical integration in an apartment company, in a nutshell my response would be something like this: "If done correctly, the benefits are enormous. But you have to do it for the right reasons. Otherwise, it's easy to mess it up." Over the years, I've seen too many apartment owners create their own property management and construction divisions for the wrong reasons. Maybe they simply want to be able to tout their vertical integration to help them raise big money. Or perhaps they're just focused on maximizing the revenue streams these entities may create.  If you're an owner with these motivations, I'd strongly recommend against launching an in-house property management and/or construction company. The chances are, things will go wrong before they go right.  But if your focus is on building in-house divisions with the proper expertise and experience in place to optimize the performance of your own portfolio, then you and your investors can reap significant benefits from vertical integration.  For starters, when you have your own property management team running your apartment communities, they're bound to be extra motivated to do all they can to boost property performance and the bottom line. Plenty of third-party managers out there do great work – I'm not saying they don’t – but a fee manager's compensation structure might not necessarily result in them doing everything they can to maximize a property's revenue and performance. Stated another way, you're (hopefully) going to look after your own child......

The demand for low-cost, moisture resistant and waterproof flooring continues to grow at a rapid pace, and for good reason—with the right approach, the results are durable, low maintenance and long-lasting. Although the focus tends to be on cost per square foot and the flooring material itself, following strategic steps before the flooring goes in will save you from expensive repairs down the road. While the right system may cost a little more initially for many multi-family projects such as hotels, college dorms and apartments, it will provide significant savings when it comes time to replace flooring. Over the course of my career, I have seen more than my fair share of moisture-related flooring disasters in both commercial and multi-family spaces. My hope is that the information I cover below will help protect your investment and your sanity.  Map Out Your Priorities  Your focus may be on installing flooring that is affordable and moisture resistant or waterproof. You may also have your sights set on choosing environmentally friendly materials with low-VOC finishes and sealants. I recommend thinking in terms of the total cost of ownership and return on investment. With all of this in mind, we must look underneath the flooring surface. What Makes a Flooring Material Waterproof?  Before we jump into waterproofing specifics, it’s important to note that while waterproof flooring material is non-permeable by definition, it takes more than the right material to ensure overall waterproofing success. Even when the flooring itself includes some form of plasticizer or PVC, it ......