The Lotus Project Named Industrial Project of the Year

The Lotus Project Named Industrial Project of the Year

The Lotus Project is the proud recipient of the 2020 AZRE Red Award in the Best Industrial Project Under 600,000 square feet category. Each year, Arizona Real Estate Magazine holds The Real Estate & Development Awards honoring the developers, contractors , architects and brokers of Arizona’s most notable commercial development projects.

Situated on 31 acres of land in Chandler, Arizona, the Lotus Project features four Class A industrial buildings designed for light industrial and advanced manufacturing. The buildings range from 102,000 to 135,000 square feet, for a total of 473,516 square feet, and are divisible to 20,000 square feet to accommodate tenants’ individual needs.

The Lotus Project reimagined the concept of a traditionally simple, bare bones building. From the lotus flower emblem on the truck dock gates, to the carefully stained concrete blocks, to the color of the furnishings, no detail was overlooked in the design. The project contains features and amenities to attract new companies to a place for innovation and creation. The property has a unified campus environment with common design features that link the buildings and open space areas with inspiring themes of innovation, creativity and vitality.

COVID-19 and the Building Market – Vol. 3

In comparison to the last several chaotic weeks, this past week has been relatively stable. Work continues on about 95% of our active construction sites across the country. Most municipalities have clarified that construction is an essential business, and we continue to enforce new health and safety procedures. Last week I mentioned potential delays due to reduced crew sizes and the sometimes-slower pace of inspections. Up until this point, we have not seen significant delays due to shortages in materials. However, we have recently been made aware of a handful of large suppliers that are shutting down their North American production lines, which could undoubtedly have significant ramifications in the coming weeks and months. Navigating these challenges effectively will prove critical.

The development industry includes a wide range of entity structures – from private developers to publicly-traded REITs. Unsurprisingly, many of these businesses are facing their own unique set of circumstances and economic pressures, including tenants’ inability or unwillingness to pay their full rent. Many tenants are asking for some form of rent relief. I have anecdotally heard of some creative negotiations that give current relief in exchange for movement on other points within the lease, such as term extensions or removal of termination options. Some development sites look to shake loose as a result of the shift in focus to maintaining existing cash flows. There continue to be opportunities for winners and losers on a deal by deal basis.

The top priority for many this week has been the application process for the Paycheck Protection Program element of the CARES act. Although, in many respects, this has been a moving target, the potential impact that this money could have on the economy should not be underestimated. Many are predicting that the current allocation of funds will be insufficient given the level of demand, and there may be more money approved later on. The scale of the demand for funds from the PPP, as well as the payment (or non-payment) of both rent and loans which were due this week, should provide further insight into our environment next week.

COVID-19 and the Building Market – Vol. 2

The current environment continues to affect our businesses in rapidly evolving ways. Most municipalities have deemed construction an essential activity and, as such, the majority of our jobsites are pushing forward. However, in some parts of the country, it is unclear if all construction projects qualify as essential activities, or in a couple cases there are conflicting directives from cities, counties and states. Another challenge we see on several jobs is reduced crew sizes, which causes decreased productivity and could result in schedule delays. As can be expected, many new safety practices are being implemented on jobsites, including controlled access zones to enforce mandatory distancing and no-contact thermometers to ensure that anyone with a fever is made aware and sent home. Additionally, to prevent delays while maintaining social distancing, a few municipalities have begun to implement virtual inspections. We have a unique opportunity in the construction industry to lead the way in finding safe ways to keep our economy alive and people working, so we will continue to advocate for safe working environments and continued progress for our clients.

As I said last week, developments are not all impacted in the same way. Some projects in earlier planning stages have been put on a temporary hold, as uncommitted construction debt will be difficult to access in the coming weeks—or even months. For capitalized projects that are seeking entitlement approvals or that are in mid-construction, schedule delays continue to be the most common short-term consequence. In the long term, the effects are likely to vary by product type. A few prominent examples of this are decreased demand for new hospitality developments and increased demand for more affordable housing. In the industrial landscape, leasing is still ongoing but expected to continue at a slow pace in the coming months. Additionally, we are seeing fewer developers take their stabilized or mature product out to market, preferring to let the peak of the crisis pass before exiting their investments. We are also expecting a smaller pool of buyers in the short to medium term. However, there will likely be a long-term increase in demand from e-commerce businesses, as well as warehousing as current inventory levels for many products have proven to be insufficient. We are also anticipating that more companies will focus on diversifying their supply chains, which could bode well for both domestic manufacturing as well as secondary ports.

COVID-19 and the Building Market – Vol. 1

The current market conditions are impacting construction and development in different ways. The construction industry’s environment is inherently different from the office environment in that it is frequently open air, or individuals are widely dispersed indoors. This setting makes it much easier to proceed with work under current social distancing & CDC guidelines, and we are pushing forward with work on all of our projects with intense focus. The impacts we anticipate on our jobsites will likely be driven by the municipalities in which we are working. Different cities and states are issuing new regulations every day which may impact our ability to continue work. One of the current issues on our active jobsites are challenges getting permits and inspections promptly due to shortages in manpower or remote working environments. In all of our regions, we are proactively preparing for the possibility of a jobsite shut down by ensuring we have a safe and secure project with protected perimeters and roofing in place where possible. Our most significant opportunity and priority right now is to continue to serve our clients as a reliable partner. Hand-in-hand with this is our focus on providing the much-needed income for all of the hourly employees on our jobsites.

In the development world, projects in their early phases are most impacted by the current environment. As referenced above, getting timely entitlement approvals, construction permits and prompt inspections is becoming a challenge. For built projects in lease-up mode, we anticipate things could start to take a bit longer as building tours become trickier and companies pause to understand the impacts on their businesses . That said, at the time I write this, we are still actively negotiating leases for tenants who need space to occupy as soon as possible. Stabilized properties have a bit more breathing room to wait out the storm. Given the uncertainty in capital markets, with the denominator effect likely to play a role, many are predicting short to medium term upward cap rate movement. As a merchant developer heavily weighted toward Class A industrial, this could impact us less severely, but sales that we initially anticipated happening later this calendar year may see a delay. An opportunity we are keeping an eye on is previously controlled sites becoming available again, as some groups may choose to unload. Additionally, we expect that the current surge in e-commerce will have some permanency in the elevated demand – and that bodes well for distribution buildings.

Fifth Avenue Apartments Groundbreaking

Interfaith Housing Development Corporation (IHDC), is pleased to announce the groundbreaking of its latest housing development, Fifth Avenue Apartments, providing 72 new affordable housing units in the Village of Maywood, a western suburb of Chicago. The development has been made possible thanks to four major financial partners along with an energy efficiency grant from ComEd. These financial partners include the Illinois Housing Development Authority (IHDA), the Cook County Department of Planning and Development, the Richman Group Affordable Housing Corporation, and Bank of America. The Chicago Community Loan Fund also provided pre-development lending prior to construction.

A vacant 33,000 square foot lot located at 800 South 5th Avenue, once owned by the Village of Maywood, is the site for the new development. The adjacent 5th Avenue corridor is a pedestrian-oriented commercial corridor in the Village, allowing future tenants easy access to transit, education, and retail. The building will be comprised of studio, one-, two- and three-bedroom residential units along with interior and exterior shared community spaces for resident use. It also includes approximately 5,500 square feet of retail space on the ground floor, currently slated for development into a grocery store, addressing the lack of this amenity in the area. Residential parking will be provided off the alley behind the new building, with commercial parking provided along 5th Avenue. New diagonal parking will also be added on surrounding streets to help accommodate additional residential guests and commercial users as well.

“This historically-underserved part of metro Chicago has proven a strong need for quality affordable housing, and we are thrilled to have this project ploughing ahead to meet that need,” said Perry Vietti, the President of Interfaith Housing. “This development has been specifically designed to serve working families and individuals and some special needs populations. Slated for opening in early 2021, we could not be more thrilled to now have this important community resource coming out of the ground.”

Maintaining its affordability status for a minimum of forty years, the five-story development will provide affordable housing for households at or below 60 percent of area median income (AMI). Sixteen of the units are designated for households at or below 30% AMI; twenty-eight units are for households at or below 50% AMI; and twenty-eight units will support households at or below 60% AMI. Nineteen of these units will be targeted to special needs populations, including 8 units set aside for homeless veterans and 11 units for tenants selected from the Illinois State Referral Network.

According to Toni Preckwinkle, the President of the Cook County Board, “Investment in affordable housing is critical to communities throughout Cook County.  Half of the residents of Cook County are rent burdened, which means they pay more than 30 percent of their income in rent.  With rental prices rising and gentrification moving in Chicago, it’s more important than ever to recognize that housing is a human right.”

The development has been designed by national integrated architecture and engineering firm, HED, and is being constructed by Chicago-based McShane Construction Company. The IHDC development team established early in the project a desire to achieve high levels of environmental sustainability, in an effort to best serve its resident population health as well as that of the surrounding neighborhood.

In 2018, Fifth Avenue Apartments was one of only a dozen projects nationwide, and the only one in Illinois, to be selected to participate in the International Living Future Institute’s (ILFI) third round of the Living Building Challenge Affordable Housing Pilot Project program.

“As a project selected for the Living Building Challenge’s affordable housing pilot program, we have enjoyed developing this design alongside this important sustainability advocacy platform, identifying the current challenges of pursuing this extreme green approach to design in the State of Illinois,” said Susan King, Principal in Charge with HED. “While the project could not feasibly achieve the current certification expectations, IHDC’s participation in this pilot effort will ultimately benefit countless affordable housing projects around the country in the future as the research continues to develop.”

Additional project team members supporting the design and development of the Fifth Avenue Apartments project include SITE Design for landscape architecture, and Ericksson Engineering for civil engineering. Property management will be provided by Interfaith Management Services, an affiliate of Interfaith Housing Development Corporation, that currently manages the 12 affordable developments that Interfaith owns.

New Affordable Senior Housing Community in Atlanta

National Church Residences and True Light Baptist Church are partnering to build a $24 million affordable housing community, which will serve the growing senior population in Atlanta’s Westside neighborhood. True Light Haven will be a high-quality; 124-unit community located at 295 Penelope Drive, and will offer independent senior living in one-and two-bedroom apartments.

By partnering with True Light Baptist Church, National Church Residences has forged a new relationship to extend its service footprint to specifically target the senior population in the Penelope neighborhood. The project is designed to provide the amenities and services that will allow senior residents to enjoy maximum independence, as they age in place in the area where they raised their children, attended church and have lived for many years.

City of Atlanta Councilmember Antonio Brown, Atlanta Chief Housing Officer Terri Lee, Fulton County Commissioner Natalie Hall, President and CEO of Invest Atlanta Dr. Eloisa Klementich, and Georgia Department of Community Affairs Division Director of Housing Finance and Development Jill Cromartie, will be among the speakers at the event, set for Tuesday, February 25, 2020, at 1 p.m. located at True Light Baptist Church, 47 Anderson Ave, SW in Atlanta.

“True Light has been a pillow and beacon of light in the Dixie Hills community for more than 60 years,” Pastor Rev. Dr. Darrell D. Elligan. “National Church Residences and True Light Baptist Church share the same vision for service, the same value of all persons, especially seniors, and the same voice for a better society in which people can live.”

The new campus will offer seniors a fitness room, business center with Wi-Fi, an on-site laundry facility, washer and dry hook-ups, and a generous community room with a kitchenette.

National Church Residences has nine communities in the Atlanta metro area, including: Baptist Gardens, Baptist Towers, Betmar Village, Big Bethel Village, Commons at Imperial Hotel, Lakewood Christian Manor, Panola Gardens, Princeton Court, and Trinity Towers. With the expected opening of True Light Haven in 2021, National Church Residences will have 1,471 units spread across 10 communities in the Atlanta metro area.

This new construction development was made possible with Low-Income Housing Tax Credits awarded by the Georgia Department of Community Affairs. National Equity Fund is providing the equity for the project. Invest Atlanta awarded the project a Housing Opportunity Bond Loan and is also the bond issuer for the project. Bank of America is providing the construction financing. Berkadia Capital Mortgage, in partnership with Freddie Mac, is providing the permanent financing for the project. The community was designed by architects at Foley Design in Atlanta and will be built by general contractor McShane Construction of Alabama.

This article was originally published in Patch. Click here to view the original article.

Jennifer Werneke Named 2020 Notable Leader in HR

Jennifer Werneke, Vice President of Human Resources at The McShane Companies, was named to the Crain’s Chicago Business 2020 Notable Leaders in HR list. The list recognizes human resources executives who have found innovative solutions to the challenges modern day companies face. Jennifer joined The McShane Companies in 2015 and has worked to strengthen the workforce, enhance company culture and recruit more female employees.

McShane Named Multi-Family Builder of the Year by NAHB

As the proud recipient of the 2019 Multi-Family Builder of the Year Pillars Award, McShane Construction Company was built on the values of honesty, integrity and partnership. Thirty-five years later, these values still guide the company as they transform their clients’ visions into reality.

The firm was awarded their first multi-family project in 1998 and has gone on to build over 20,000 units. They have expanded their portfolio to include luxury, market rate, affordable and mixed-income residences, supportive housing, independent, assisted-living and memory care senior living facilities and off-campus student housing residences.

Recently recognized as the fourth largest multi-family contractor in the nation by Multifamily Executive magazine, the McShane organization is known as a premier multi-family general contractor in the United States, serving clients in 33 states from their offices in Chicago, Phoenix, Irvine, Auburn and Madison.

McShane believes in exceeding the expectations of their clients by delivering high-quality projects and building relationships that last. This is exhibited by the fact that 75% of their projects are performed for repeat clients. The firm also strives to add value to the communities in which they build. This is done not only by delivering projects that enhance the community, but also by engaging the community and local businesses.

McShane takes advantage of every opportunity to employ residents of the local neighborhood by working with community groups to offer opportunities to residents to participate in the construction of their projects. Additionally, they are committed to involving minority business enterprises (MBE) and women business enterprises (WBE) and regularly exceed hiring goals. McShane’s culture extends beyond the walls of their office and into every jobsite and community they work in.

McShane Construction has enjoyed several achievements over the last three years, including profitable growth, new geographic markets and an evolution of our rich company culture. Since 2016, overall revenue has grown 69% while revenue from the multi-family sector has increased by 78%. During this same time period, our workforce has increased 42%. Many of these successes can be directly attributed to the long-standing relationships we build with our clients, communities and subcontractor base.

As McShane has experienced responsible growth over the last few years, the firm has maintained concentration on company culture that is rooted in the principles of honesty, integrity and ethical conduct. In order to achieve this, we’ve continued to improve our focus on our most important asset: our employees.

Employee growth and well-being have been paramount to the success of the organization. All McShane employees receive regular coaching, training, mentoring and project experience to develop the necessary skills and knowledge to advance their careers in construction.

Many of our company leaders joined McShane as interns or new grads and developed their entire careers with the company. We provide benefits that address the needs of all employees, including our student loan assistance program and 100% paid parental leave. McShane’s approach to professional development and well-being is evidenced by our voluntary turnover rate of 7.2%, considerably lower than the industry average of 26.4%

2019 National Multi-Family Builder of the Year

McShane Construction Company is the proud recipient of the 2019 Multi-Family Builder of the Year Award, recognized by the National Association of Home Builders (NAHB). NAHB’s Multi-Family Pillars of the Industry Award has honored developers, architects, interior designers, builders, marketers and property management firms since 1992. The Pillars Awards, sponsored by NAHB’s Multi-Family Council, are widely respected by top-level multifamily development companies, general contractors, management firms and experts in the field. This is in part because of the high-quality industry professionals who volunteer their time to carefully consider the entries and choose those that merit honor and recognition.

Top Down Success

For construction and concrete pumping professionals confronted with challenges, thinking outside of the box is part of the job description. Innovation must have seemed like the order of the day for McShane Construction on a project to construct a new distribution center in Thief River Falls, Minnesota. Dealing with a massive footprint and battling a winter that was harsh even by Minnesota standards, the company drew upon a range of solutions, including pre-warming ready mixed trucks, heated aggregate, hose pulling gear, geo piers, stacked precast panels and more. And helping make it all happen was a pair of concrete pumps that delivered mud through as much as 575 feet of system to keep the project on track. The fact that they pumped the above grade stories from the upper floors down to the lower should not come as a surprise at all.

KEY EXPANSION

With a footprint of more than 1 million square feet, the project in which McShane is involved is unarguably huge. Placing it in northwestern Minnesota, however, makes its size and significance all the more impressive. According to McKinley Geiger, project manager for Rosemont, Illinois-based McShane, because of the size, the job is being done in three separate phases, with each phase representing roughly one-third of the overall building.

“The layout of this structure is interesting, in that there are sections of each floor that do not extend the entire length of the building,” he said. “So, in the first section, there are really only two small mezzanines on the second and fourth floors—everything else is clear to the top to make way for automated racking systems which will be installed later. In the second part of the structure, the third floor exists only on the north half of the building, while the second and fourth floors are on the south half—they never overlap. And then there is a fifth floor which is also just a fraction of the full footprint. That made things interesting as we pumped each floor, doing each section from the top down.”

McShane’s decision to pour the project in that manner is being done to accommodate one very basic principle: gravity. Because each floor consists of metal pan decks, anything that they would pour on an upper floor would put the completed floor below it at risk from dripping from above.

“Instead, when you start top down, if anything falls to the deck below—as long as it is not a large amount of concrete which could mess with the structural integrity of the deck—we can just cover it up with the next pour,” said Geiger. “A bit unconventional, but effective nevertheless.”

DIFFERENT IS THE DIFFERENCE

As one might imagine, the pumping effort at the Thief River Falls site was herculean. To make it all happen, McShane subcontracted to Millennium Concrete (Coralville, Iowa), which supplied the Ductilcrete material and technology used for the slab on grade. For the massive day-to-day pumping effort, they, in turn, hired Parkers Prairie, Minnesota-based Bob’s Concrete Pumping. Facing some daunting lengths for the pours, innovation once again ruled the day, according to Geiger.

“Despite one side of the structure being nearly a quarter mile long, the pumper got the job done with a pair of Schwing pumps—an S 36 X and an S 38 SX—as well as some additional placement equipment,” he said. “We did so many different things on this project in order to deal with challenges, including everything from the structure’s size to the weather, which seemed unrelenting at times.”

GETTING FULL EXTENSION

The pumper made use of an area in the middle of sections two and three, which offered a ground-to-roof opening that allowed them to get the S 38 SX pump in and up. While doing so guaranteed access to each floor, that only solved part of the problem. According to Bob Swenson, owner of Bob’s Concrete Pumping, it was the unique design of that pump which really made the difference.

“This was a challenging project, in that we needed to get at five levels of mezzanine decks with really limited overhead space,” he said. “But that’s exactly why we bought the 38 SX and why it handled about 95 percent of the pumping for us out there. That particular boom offers a hyper extension feature at every section, which meant we were able to sit closer and get in further than any other pump in our fleet would have been able to do.”

He added that some of the farthest reaches were nearly 600 feet in, so even though a lot of system would still be necessary, they benefited from every inch of extra reach the 38 SX got them. “The design of that unit’s boom allowed us to get in much further than a standard roll and fold,” he said. “It proved so successful for us, in fact, that the customer is discussing another 70- to 80,000-yard project with us this coming winter. They were definitely pleased.”

As mentioned, even with the 38-meter boom fully extended, the farthest reaches of the decks made the addition of more than 450 feet of system necessary. To help deal with that, the pumper used a pair of radio-controlled Line Dragons to help get line to where it was needed.

“I have a background in concrete work and I’d never seen that before — it was very effective,” said Geiger. “But the fact that those boom pumps were able to efficiently get mud to areas as much as 575 feet away can’t be overstated.”

KEEP THE FIRES BURNING

Geiger said that they were initially looking for concrete production rates in the 30,000 square-feet-per-day range. However, after getting on site and finding the permafrost still several feet down, they quickly learned that Mother Nature had other plans.

“This past winter was not a great one for pouring concrete,” he said. “Even with our planning, we still missed a lot of days. To try to cope with the cold, if we knew we were going to pour the next day, we would have Davidson (the ready mixed contractor) bring some of his trucks over and park them inside a building that was heated. In that way, the steel in the trucks was kept warmer, so that when they loaded up the concrete, it was going into a better environment than a truck that had been sitting outside all night in 30 below zero weather.”

Obviously, McShane was not alone in dealing with the bitter cold of a northwest Minnesota winter. The local office of Davidson Ready Mix & Construction had prepared for the sub-zero temps by having a wood-fired system in place to keep the aggregate pile warm for the project throughout even the coldest months.

“They did a great job of keeping it usable all winter,” said Geiger. “Because all the gravel pits in the area were frozen solid, we couldn’t even get stone for the job site, so their efforts really helped out.”

SUPPORT SYSTEM

The massive, million-plus-square-foot slab-on-grade sits atop a series of spread foundation footings which, because of the heavy, fatty clay content of the area soil, needed better support than could be achieved with a grade beam. Geiger said a rammed aggregate pier system proved the solution for that challenge.

“We used an Iowa company called Foundation Service Corporation that came in and drilled what they call geo piers,” he said. “In areas where footings are designed to go, an excavator with an auger attachment at the end drills a hole—or series of holes—removing the material. (Because it is clay, it does not close in on itself.) Then, sand is placed in each hole and another excavator equipped with a ram attachment hammers downward, compressing the material. This is repeated in roughly one-foot lifts until each hole is completely filled, resulting in a solid pier. Some footers have five geo piers supporting them, some have 20. The bottom line was we now had soil stability where there was none before.”

GAINING SOME PERSPECTIVE

To put the size of the project into better perspective from a concrete pumping point of view, consider this: Bob’s Concrete Pumping pumped concrete to five partial floors of pan decks—no slab, no footers or piers—and still pumped more than 25,000 cubic yards on the job. And in many cases, they ran as much as 450 feet of additional system and still kept production rates up.

“There’s no doubt the pumps have been an integral part of this project,” said Geiger. “Any time you are on a tight schedule, dealing with days lost to weather, and having to innovate to make sure reach is never an issue, it gets challenging. But the pumper came armed with equipment that rose to the occasion, ensuring that each of those issues was addressed. This has been an impressive project so far and everyone involved in it has really risen to the challenge.”

The new distribution facility is slated for a 2020 opening.

This article was originally published in Concrete Pumping magazine with contribution by McShane Construction Project Manager, McKinley Geiger. Click here to view the original article.

2019 Top Distribution/Warehouse Contractors

McShane ranks #9 in the nation in distribution/warehouse construction by Engineering News-Record. The firm has been providing construction services within the industrial sector since its inception in 1984. Since then, the organization has completed over 250 industrial assignments totaling in excess of 80 million square feet.