David Rintz, Regional Vice President – Multi-Family, discusses how relationships with our partners over the years have contributed to our success in multi-family construction.
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Hear from Tom Beres on the importance of McShane’s design-build approach on industrial construction projects. Our design-build approach has been key to our 40 years of industrial project success.
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Tom Beres
Regional Vice President – Industrial
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The McShane Companies ranks #79 on the Top Contractors listing published by Engineering News-Record. Additionally, we ranked #3 in Multi-Unit Residential, #40 in General Building and #46 in Domestic Building. First appearing on the Top General Contractors ranking in 1991, McShane has been consistently recognized as one of the top construction firms in the nation for 40 years. Offering multiple service options for a variety of market sectors all over the country, McShane has enjoyed steady growth throughout its years in business.
It is with great excitement that I share the opening of our Nashville Regional Office. Over the past 10 years, we have experienced substantial growth in the Southeast, and the addition of a Nashville office will help us better serve both new and existing clients in the region.
In my 21-year tenure at McShane, I have had the privilege of watching the company grow substantially, and it is an honor to be part of yet another significant moment in company history. I am thrilled to build upon McShane’s success in the Southeast and look forward to expanding in the region and creating new relationships.
Nashville is a robust and growing market that holds a lot of potential for our company and the construction industry as a whole. With a balance of healthcare, corporate operations, manufacturing and supply chain management, Nashville is one of the country’s most attractive growth centers. We see this as an excellent opportunity to focus our expertise on multi-family construction in the region.
We are currently underway with two multi-family projects in the Nashville area: Avenida Indian Lake, a 138-unit active senior living residence in Hendersonville and Novel Harpeth Heights, a 322-unit development in Nashville. Additionally, we recently completed the construction of Parc at Murfreesboro, a 359-unit complex in Murfreesboro.
I am grateful for the support I have received from our clients, partners and friends, and I look forward to the journey ahead.
As America’s suburbs grow, garden-style apartments have become increasingly popular. But what exactly is causing this shift, and what is so appealing about garden-style complexes?
What are Garden-Style Apartments?
A cluster of low-rise buildings, typically two or three stories high, in smaller cities and suburban areas characterizes garden-style apartment complexes. Open areas with lawns, landscaping and pathways connect the buildings, and most complexes are centered around a clubhouse with amenities such as a fitness center and pool.
Trends Affecting Garden-Style Apartments
Over the past few years, there has been an increase in migration from major cities into secondary and tertiary markets. The pandemic has accelerated this trend even further, as many people want to leave cities for lower-density living. Additionally, the pandemic has enabled many to work from home, with 29% of the adult workforce employed in remote-friendly occupations. These people no longer have to worry about living close to their office in favor of a shorter commute.
Why Garden-Style?
For those who want to live in more suburban areas but do not wish to own a house, garden-style apartments are a great solution. Their lower density allows for better social distancing, and they offer open-air amenities and more overall space at a lower cost.
Benefits to Developers
Garden-style apartments do not just provide advantages for their residents; they also benefit developers. Flexible site layouts can accommodate virtually any land site, and suburban areas have larger tracts of land for purchase. Most of these sites are greenfield, eliminating the need for environmental remediation, thereby lowering the cost of construction and shortening the schedule.
Expertise in Garden-Style Construction
We possess extensive experience building garden-style complexes at McShane and are currently underway with 12 developments across the country. Implementing a sequenced turnover of individual buildings enables the owner to begin leasing before the project is fully complete.
With 2021 underway, it’s time to narrow down the vision for 2022 – and beyond. Industrial development is very strong for one key reason: a lack of available space due to increased demand for distribution. Industrial vacancy rates across the country are at or near all-time lows, and the demand for warehouse options continues to increase. In this article, we’re going to discuss eight key drivers impacting this increased demand.
Increased need for temperature-controlled environments with a wide range of temperature capabilities. Pharma products require a wide range of temperatures, while produce typically requires 34 to 45 degrees, with some specialty items as low as 35 degrees below zero. You may be thinking, no one deals with such a wide temperature spread, but some food service companies have been doing this for years. The difference today is that both the requirement and technology available for tracking and maintaining these temperatures has increased, therefore holding companies responsible to maintain temperatures throughout the supply chain process.
Last mile. How long will we highlight the term “last mile?” The increased volume of immediate delivery continues to drive the demand for readily available products. Concurrently, the number of available land options for warehouse space near densely populated areas continues to diminish.
The use of autonomous cars and trucks is going to increase. Developers must consider this point when engaging the architect to ensure their building remains up-to-date. This applies to both large distribution centers as well smaller urban facilities. New construction should incorporate this in the design by positioning conduits in case there is an increased desire or requirement for electric car parking. Future warehouses will need to have the same offering for tractors.
Refrigerated trailers. These have long had the capability to operate at warehouses by utilizing “house” or electric current. The expectation for this option will increase as companies move from trailers powered by diesel to electric batteries.
Personnel shortages continue to be a major concern for operators of facilities. It has always been challenging to hire people willing to work the evening and night shifts for 24-hour operations. Now, a shortage of labor along with increased labor costs, including increasing minimum wage and benefits, is driving more companies to consider automation. New construction must be designed to handle automation from a structural and electrical standpoint.
Ongoing shortage of truck drivers. Drivers of the past were away from their families for weeks at a time as they drove cross-country. Today’s drivers focus on spending more time at home more and driving less miles. This trend has existed for years, but with the creation of box van deliveries, i.e. UPS and Amazon, there are many options for these once potential long-haul driver candidates to consider. Long-haul driver needs will diminish as the general population starts to accept driverless trucks and as companies purchase the unmanned tractors.
SKU reduction to focus on biggest movers has regained attention. Key drivers of this trend include limited warehouse space and greater attention to the inventory costs associated with having many slow-moving items in a warehouse.
Technology utilization. This will continue to increase for temperature monitoring within facilities, as well as during unloading, loading and transport. The same applies to warehouse and manufacturing production.
As one of the top-ranked distribution contractors in the nation, we’re well-versed in building attributes that are in high demand by both developers and end-users. We encourage developers to consider these aspects to ensure that their facilities will meet the needs of consumers for years to come.
Steel pricing has risen exponentially since early December and is now at a 12-year high. The US HRC Index has increased over 30% during this time, resulting in prices of over $1,000 per steel ton, a level not seen since 2008.
There are a few factors contributing to the spike in pricing. With several pandemic-related production shutdowns in 2020, steel producers cut supply. As steel end-users restarted operations later in the year, mills struggled to keep up with demand as it ticks back toward pre-pandemic levels. At the end of 2020, US raw steel utilization was 72%, a year-over-year decrease of almost 12%. Additional factors include rising raw material costs and the lack of import backstop to ease supply constraints.
This is creating implications for industrial construction, specifically for big box developments. The roof deck and joists utilize hot and cold roll steel, which comprise the majority of the steel needed to construct this facility type. The material cost alone can account for approximately 8% of the total cost to construct the building. Our projects in California and Arizona typically include a composite wood roof deck instead of steel, but with lumber commodity prices doubling since last summer, we aren’t experiencing much relief with the different construction material.
When will steel prices flatten? Experts believe that Q1 2021 will be the peak in terms of supply tightness. As mills continue to increase production to meet current demand, we should see pricing begin to fall in early summer, with levels back to normal in the second half of 2021.
At McShane, we are keeping a close eye on the situation and maintaining frequent contact with our steel suppliers to offer guidance to our clients and partners.
As our new President, Mathew Dougherty, P.E., takes the reins at McShane Construction, he sits down with recently retired president Jeff Raday for a “Screenside Chat” to talk about leadership, mentorship, significant projects and relationships forged over the years.
Commercial construction firm McShane Construction expects to soon break ground on the eighth apartment complex it would have underway in Phoenix, a striking illustration of the boom in multifamily development in the city.
Developer Crescent Communities has hired McShane to build Novel Val Vista, a 317-unit apartment complex at 1727 East Pecos Road in Gilbert, a southeastern suburb of Phoenix. It’s the latest project McShane is building in the region that were planned before the coronavirus pandemic and are moving forward as scheduled, Jim Kurtzman, senior vice president at McShane, told CoStar News in an interview.
“This is the busiest that I’ve been in this market since the early ‘90s,” Kurtzman said. “I don’t remember a time when the multifamily market was busier.”
Phoenix is increasingly an attractive relocation option for city dwellers who had been paying a high premium for amenities they couldn’t access for the majority of 2020 because of the coronavirus pandemic.
It is one of the nation’s strongest multifamily markets in part because of its lower costs of living and strong employment growth. By November 2020, the city had recovered around 80% of the 200,000 jobs it lost during the early months of the coronavirus pandemic, according to CoStar research. The city has long been a destination for workers in dense, pricier cities who see Phoenix as an affordable option with a strong quality of life.
“A rise in remote work will entice more people to move to Phoenix as an affordable option to California or East Coast markets,” Jessica Morin, director of market analytics at CoStar Group, wrote in a recent report on the city’s apartment market.
Most of McShane’s apartment projects in Phoenix are scattered in relatively wealthy, suburban areas just on the periphery of the city’s core. The company, based just outside Chicago, is currently building one apartment in Mesa, two apartments in north Phoenix, two in the northwest suburb of Scottsdale and three in Gilbert, Kurtzman said.
That move mirrors a national trend in the multifamily space, too, as more young professionals are foregoing the once-traditional route of buying a house in the suburbs and instead renting an apartment in neighborhoods closer to their city’s downtown core.
The company is working with a wide array of developers, too. Charlotte, North Carolina- based Crescent, for instance, is a national multifamily development firm that has so far built 59 apartment communities since it was founded in 1963, according to its website.
McShane is also building projects in Phoenix for Birmingham-based Liv Development, Dallas-based Leon Capital Group and Continental Properties, a multifamily development firm based in Menomonee Falls, Wisconsin.
The company is also building a wide array of multifamily properties, too. They include styles as varied as garden-style apartment properties and podium-style apartments, which is the construction style more commonly used in luxury or high-end developments.
“We’re pretty much doing everything,” Kurtzman said.
This article was originally published in CoStar News with contribution by McShane Construction Senior Vice President, Jim Kurtzman. Click here to view the original article.
