Wolgast Blog - Construction Trends, Tips and Information

As we hear more and more about STEM education and how important it is to expose your students to Science, Technology, Engineering and Math as fields of study, Wolgast offers programs to introduce construction practices to your students during our construction projects at your school.  We call it Educational Enhancement and it has the flexibility to be tailored to your students in many different scenarios.

Other than taking time to prepare a plan when the weather is poor for construction (so you can be ready when the weather is conducive for construction) there are additional benefits to contact your design/builder or general contractor in the winter.  Let me clarify that the following explanation works best when applied in Michigan and other cold winter states.  

The basic difference of D-B over general construction is the relationship between the architect and builder.  In this project delivery, they are on the same team. A doctor only needs to work with one entity to design and then build his or her office.  Also in this scenario, the doctor is protected from any discrepancies from the architect’s drawings to contractor’s construction application.  With D-B, the contractor and architect are consulting on budget, application, and material quality throughout design, so when construction starts there are very little interruptions or change orders. Should there be a discrepancy, the Design-Builder will work it out without involving the owner unnecessarily. This protection is valued by doctors who oftentimes aren’t as familiar with construction, nor have the time to deal with these issues on site. All of these reasons are exactly why D-B was created as an alternative to general construction.

As an update to this blog originally posted a few years ago, we have new information to add  from the June 2018 Design-Build Utilization Report funded by Design-Build Institute of America. Findings in this report determined that popularity continues to grow for this delivery method. The results showed, "Design-Build Construction spending in the assessed segments is anticipated to increase 18% from 2018 - 2021", and will likely represent 44% of construction spending by 2021. Researchers determined that the education of building owners on Design-Build benefits is gaining traction, and more owners are experiencing enjoying the benefits first hand.  Additionally, FMI Corporation, a management consulting and investment company, had released a report in March 2019 titled 2019 AGC/FMI Risk Management Survey, whereby they found that "38% of contractors were <planning> to increase their in-house design capabilities last year and 43% this year".  So there will be more collaboration, less risk, and more competition among design and construction moving forward.

Original blog article:

According to the May 2013, “Design-Build Project Delivery Market Share and Market Size Report” by Reed Construction Data and RS Means Intelligence, Design-Build construction delivery method has taken an additional 9% of the construction market since 2005 and General Construction has lost 10% of the market share in that same time.

I caught a rerun of Family Feud on GSN recently and the question was posed, “What profession has no room for errors?”  They featured seven possible answers.  I automatically thought of physicians, which was the top answer.  After that, it became a little tougher.  Police officer was up there, but neither pilot nor bus driver were.  So what else could it be that 100 American people thought?  I was on the edge of my seat to find out.  Then they said it, "Construction"!  Of course, being in the industry I know this, but I didn’t know that the majority of people on Family Feud would have thought of it.

Commercial Property Financing

As I found out recently by talking to Steve Canole, Vice President and Business Loan Officer  at 1^st State Bank, there aren’t as explicit criteria for securing a commercial construction loan as there are  for residential mortgage financing.  According to Steve, there are many more variables that lenders need to consider when reviewing a commercial property mortgage compared to a residential loan which is more stream lined.  Primarily, these variables include whether it’s an investment property versus owner-occupied, the size of the project, the varied ways commercial real estate can be purchased and held, the various types of operating entities and how the owner chooses to operate and file taxes, and finally the loan/cost ratio of the project.

Currently, many Michigan auto dealers are feeling varying degrees of pressure from auto manufacturers to modernize their stores, some of which have never been renovated since they were originally built 50 years ago.  While remodeling can be an expensive investment in your business, there are several benefits that go along with the improvements.