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Planning for an expansion project, renovation or new build is exciting, but it also comes with anxiety and stress. When undergoing a construction project, you may face any number of construction and development pressures. Here are several to consider.

Budget Risk

Cost escalation is always a risk. Over the last five years, costs have increased on average 2.95% each year for our senior living projects. This number includes materials, labor, fees and the subcontractor market.

You also need to consider program and design changes along with poor budgeting performance. We find the vast percent of budget changes relate to a change in program. This is good if money becomes available, for instance if you gain additional funding or free up money from your proforma contingency. However, if budgeting was off in the beginning, you will fight an insufficient budget throughout the entire process.

Unreliability

Market conditions may change during the time it takes to plan and budget for your construction project. By the time you’re ready to start your project, you may be looking at cost escalations. This is especially true for not-for-profit communities, because they move more slowly than for-profits. Depending on when we join the project team, we can be involved for several years before construction actually starts. In fact, after 3.5 years of planning and budgeting, we recently broke ground on a $30-million-dollar project. A lot can happen over 3.5 years to impact the financing or cost of your project.

Surprises

There are always surprises. Common ones include difficulty getting town approvals, non-responsive utility companies and subsurface conditions, such as contaminated soil or hidden conditions in the walls or ceilings.

Lack of Trust

Not trusting your team can have major negative impacts on your project. Team selection is so important because, depending on when you hire your team, you’re most likely going to be working together for years. Make sure you choose someone you like and get along with.

Partnering is also important. Everyone’s interests need to be aligned, which means you need to communicate what really matters to you and your community. You may not be able to meet your whole program due to cost and/or time limitations, so it’s important for the project team to understand your program needs and priorities.

Stress

All the pressures we’ve discussed above can cause real stress and distract the team from effective collaboration. As your general contractor, our role is to act as a risk manager to support your interests. We want to be a part of and manage a high performing team and avoid the silos that plague some projects.

If you want a high performing team, some things to think about include:

• What stage do you build your team?
• Do you need support managing the process?
• Do you need budget checks?
• What does your Board support?

We get it, there’s a lot of pressure on you throughout the planning, design and construction phases. Here’s some advice from one of our trusted partners, who’s overseen several major projects on his active senior living campus.

• Stay calm. The process is long from start to finish and your residents and team are counting on you for leadership.
• Be willing to change and adapt.
• The process is worth it; you must continue to reposition your community.
• Celebrate the small wins along the way, and definitely celebrate when the project is complete.
• Have a glass of wine at the end of the week!

We’d love to partner with you to make your next construction project a success. Contact us to find out how we can help you.