industryinsights

By Lloyd A. Rosenberg, AIA

Architecture is a continually stimulating profession, especially for the firm’s owner who addresses complexities in various industries in delivering the service. Most people correctly associate architecture with creativity, as design is at the core of our profession, but the business of architecture incorporates numerous skills and processes beyond aesthetics. No where is this more true than DMR, which is larger and more diverse than most architectural firms, and integrates engineering, planning, environmental, bidding, construction supervision, legal and more into our service mix.

But it does always come back to design, because that is our deliverable. A subject of much discussion in every project, the challenges of design begin not with a blank canvas but with a set of constraints: space limitations, functionality, budgets and available materials are just four of the variables that are addressed by the architect. The real estate business positions the architect as the natural pivot point between the property owner and the contractor, so not only are we engaged for design, the architect is largely focused on managing the business issues of real estate development.

The architect’s role in development has never been greater than in the current environment, where regulatory standards have grown in complexity. For example, in New Jersey, various government agencies responding to Superstorm Sandy have adopted regulations on flood plains that can undermine the viability of projects already on the drawing board. And among other issues we have encountered this year, the unexpected presence of migratory birds prevented us from removing trees, postponing construction. Unknowns adds risk to development, and one of an architect¹s functions is to foresee potential issues and plan around them, eliminating the risk, but it is not always possible.

And finally, there is the variable represented by the market itself. Construction materials and labor costs can change after the planning for a project, but before it is commenced. The architect must monitor these issues so that there are no negative surprises after construction begins. And projects that seemed to be in demand when planned might not find a robust market when completed. All of these issues and many more must be factored not only into our service to our clients, but in the management of our architectural practice.

After 25 years in business, over which time DMR has become the 4th largest architectural firm in New Jersey, we’ve seen multiple cycles in the real estate industry. No economy is like any other, making it impossible to predict the length or impact of an expansion or a contraction. The correct management policy is to be ready to respond to changes in either direction always looking for the best position for future growth. Even when the business climate is in a downturn, there is a right way to contract that allows architects to take advantage of the inevitable opportunities to grow.

At DMR the main principle of stability is depth and diversity. We have structured the firm to weather downs and maximize ups by being able to shift into various practice areas depending on the demand cycle. In expansions, office and residential work is plentiful. In contractions, education and healthcare work may not be as plentiful but technology advancements often lead to redevelopment. By maintaining a staff that has expertise in a broad array of practice areas, we not only protect the stability of our own firm, we provide our clients with a depth of institutional knowledge that can only be developed through taking good ideas from one area and applying them to another.

A complicated business? Yes. But a rewarding one, especially when the day comes that a project is complete and we see it not only for its excellent design, but for all the elements that we blended into accomplishing its development.

By Lloyd A. Rosenberg, AIA

Delays in construction projects can be costly—but perhaps the most expensive delays are the ones that occur before construction even begins. Materials and labor costs continue to rise in the economic expansion, and the cost of projects can increase from 10-20% from the time they are approved to the time construction begins.

The political environment can be very cumbersome, and months or even years can pass between the time a project is originally conceived and budgeted until it actually breaks ground. We’ve worked with some townships on building plans as recently as two years ago that are now not in the budget anymore because they waited.

As we are currently working on more than 12 municipal building projects across New Jersey, we recommend that municipalities calendar a re-budgeting process every three months so that delays can be priced into the final budget; and that bidding for jobs take place as soon as possible after approval. Typically a consultant has been retained to assist in the bidding for the project during its design phase who can be tasked with regular estimate updates. All the costs associated with the project need to be affirmed at regular intervals if there are hang-ups in getting started.

Another important discipline is foresight into what happens with the project in the next generation. For example, if the municipality needs to house 50 office employees now, what happens if the number is 70 in 10 years? Or 30? With growth in government balanced by automation of some functions, requirements of today surely will evolve with time, and a conscious approach to how property assets can be repurposed will save challenges for the next generation.

And finally, the project managers on the municipal side need to be satisfied that they understand all the elements of the project and their ramifications before it commences and specifically articulate all of their expectations. Too often, both sides take it for granted that everything is understood by a review of the drawings. But the business issues are much deeper than the plans, and without a detailed examination of the architect’s buildings plans against the client’s plan for the building, disaster can strike in the form of surprises when the building is complete and it’s too late for alterations.

Challenge your architect to explain how the plans relate to regulatory and other requirements conditions, which will help reveal potential complications in timing, and budget impacts.

With so many elements going into the making of a new building, recognizing that there will be surprises during the construction phase that even your architect or contractor didn’t imagine, and accounting for that ahead of time can save municipalities both time and money. DMR, acting as the project manager for projects including the currently-in-construction Frank J. Gargiulo Campus in Secaucus, is using technologies that allow all contractors on the project to talk daily in real time about potential issues and practical solutions, keeping them on a tight budget and aggressive timeline.

There are risk-management processes that can deliver highly predictable and desirable project outcomes, but often timeframes and budget issues push even the most disciplined professionals off best practices. At every turn, people need to remind themselves to measure twice and cut once. Mistakes mean doing things over, and that is far more expensive than doing them right the first time.

This article also appeared on New Jersey Association of Counties Newsletter.