CREJ - Office Properties Quarterly

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Page 24 — Office Properties Quarterly — April 2015
Design-Build
W hile the design-build
approach is often associated
with small, fast-track proj-
ects or large, complex gov-
ernment projects, it is just
as beneficial to office building projects
where speed to market is critical to
developers. Nowhere is this truer than
with Colorado’s white-hot office mar-
ket with its extreme competition for
top-tier tenants.
In a design-build project, teams are
responsible for the entire office under-
taking, from design to estimating to
construction.This approach produces
efficiencies that result in higher-quality
buildings that are free of cost overruns
and schedule delays. Moreover, the
design-build approach eliminates the
inefficiencies of the traditional design-
bid-build approach and gives develop-
ers a competitive advantage by bring-
ing projects to market faster.
A good design-build team views the
project from a developer’s perspec-
tive, knowing that a successful project
requires a responsible design solution.
In the design-build delivery model,
architects and engineers collaborate
with the preconstruction and con-
struction team, from the concept stage
of the project onward in order to meet
the developer’s pro forma objectives.
In the conventional delivery model
of design-bid-build, project team
members assume they will have
access to developer contingencies to
cover change orders as the project
progresses.These unforeseen prob-
lems increase the developer’s cost
and competitive risk and put them in
the middle of the conflict resolution,
between the architect and the contrac-
tor. Conversely, design-build teams
focus on target-value design and strive
to complete the
project without dip-
ping into contingen-
cies through early
and ongoing collabo-
ration.
The overarch-
ing benefit of
the design-build
approach is centered
on the concept of
maximizing value
through a collab-
orative model. It’s a
developer-oriented
approach that maxi-
mizes project pro forma opportunities
to produce a high return on invest-
ment and to make it easier to obtain
financing and early tenant commit-
ments.
The approach to building office
complexes provides clear benefits for
developers.These include reduced
schedules, higher building quality,
greater tenant flexibility and results
in few (if any) project-delaying change
orders.
Building Better Quality
on Tight Schedules
Now, more than ever, it’s critical to
secure tenants and quickly develop
rent roll.With the stakes high, sched-
ule slippage can dissuade potential
tenants and kill a project. Developers
who choose a design-build approach
will build their rent roll earlier and
avoid the schedule-crippling churn of
design, estimate and redesign that can
cause serious delays that result in los-
ing tenants and financing.
The approach is especially beneficial
to the success of fast-tracked office
projects because project estimating
happens in tandemwith the design.
Generating and locking in the guaran-
teed maximum price early in the proj-
ect produces trustworthy estimates
with lower contingencies for projects
that are buildable as designed.
Contrast this to the design-bid-
build approach where the architect
designs the building and hands the
design to the estimator, who produces
a price estimate that includes a size-
able contingency to cover unknowns.
If the estimator determines that the
building cannot be built within bud-
get as designed, it triggers a redesign,
followed by another estimate.This
design-estimating cycle can take
substantial time, effort and money to
resolve and it can completely derail
the schedule.
Instead of designing in a vacuum
and requiring the contractor to figure
out if the design is buildable within
the developer’s budget and schedule
constraints, architects and engineers
in design-build teams design the build-
ing with quality and construction
top of mind, using the target-value
approach. Using 3-D modeling and
other advanced building information
modeling tools, they can quickly evalu-
ate design alternatives and material
options for the budget.This collabora-
tive process also ensures that it can be
designed and built on a compressed
schedule.
Tenant Flexibility
When developers are building to
attract high-value tenants, the tenants
often request changes to the design.
The design-build approach accommo-
dates tenant design changes more eas-
ily than the design-bid-build process,
because making these changes likely
involves a cumbersome communica-
tions loop that includes the tenant,
broker, architect and contractor.The
design team evaluates whether the
change can be achieved.Then it goes
to the contractor, who may push back
or request a change order, either of
which will delay the schedule.
With design-build, design and con-
struction teammembers address the
requested changes together to find
a workable solution to the tenant’s
request. Because there is no back and
forth between the architect and con-
tractor, the changes usually can be
absorbed within the original schedule
and with minimal cost impacts.The
results are happy tenants and signed
leases.
No Surprises
Change orders can have a major
negative impact on a project sched-
ule and budget, especially when the
changes are a result of problems dis-
covered during construction, which
are more expensive and take longer to
rectify. Because the design-build team
collaborates in the constructability of
the design from the beginning, the
architecture and engineering team can
analyze and alter the design to elimi-
nate the types of conflicts that often
crop up in the field, alleviating most
change orders.
Developers who use these teams
find great success meeting pro forma
requirements and achieving a higher
return on investment with increased
speed to market.The office buildings
are arguably the highest quality for the
budget and win desirable tenants with
the promise of design flexibility and
on-time occupancy.s
Doug Spuler,
AIA, LEED AP
Principal, The Beck
Group, Denver