Similar to the financial markets, the construction market is unfortunately not immune to the impacts of COVID. Companies are having to quickly adapt their site safety protocols, estimating practices and contingency planning. Our development and construction managers are in the midst of navigating the challenges presented by COVID on developments across the country, from Chicago to Phoenix to San Diego. It is difficult to project what the lingering effects of COVID will actually be, but over the course of the last several months we have put our heads together with some of the best teams around the country to create plans that will hopefully allow construction to proceed smoothly in both good and bad COVID environments
Screening and Safety Protocols
In terms of projects under construction, our partners and teams have been diligent and proactive in implementing and following CDC guidelines and safe distancing requirements. We are working with our design-build partners to implement and fund on-site personnel temperature checks, questionnaires, and, on some sites, contact tracing mechanisms. We and our design-build partners are focused on creating and maintaining safe and healthy work environments in order to maintain necessary levels of productivity across all construction trades.
Keeping Our Eye on an On-Time Delivery
Given the uncertainty of the supply chain, we have proactively secured warehouse space on some of our 2021 project deliveries to allow for early buy-out and storage of long lead or at-risk materials to mitigate and protect against procurement and shipping interruptions caused by COVID. While the project has to absorb the added costs for storage, the incremental costs proved beneficial when weighed against the potential costs associated with completion delays. With materials stored and available to the project, the risk of potentially not having those materials and equipment when needed should there be any shipping delays caused by COVID are entirely mitigated.
Forecasting a Beneficial 2021 Construction Pricing Environment
As far as future pipeline, some projects have inevitably been delayed due to COVID-applied pressures on municipality permitting processes and the financial market. After speaking with contractor relationships across the country we are somewhat bullish about stabilization of construction pricing, if not potential de-escalation in some markets, in the coming months to year. We are already experiencing some subcontractors and contractors more aggressively pursuing future pipeline via more aggressive pricing. We are optimistic that late-2020 to early-2021 will be a more ideal opportunity to secure beneficial construction pricing, albeit with a cautious eye toward the financial stability of those that are being most aggressive.
Planning for Projects in 2021 and Beyond
No one knows the trajectory of the pandemic and as a result what, if any, of the on-site COVID safety measures will persist as the pandemic runs its course, whatever that course may be. Will construction practices return to the pre-COVID standards or will some of the new practices continue having either positive or negative impacts on project costs and/or schedules going forward? Given this uncertainty, some contractors are building in additional time into future project schedules and budgets to account for any lingering COVID delays and/or operating procedures on site.
While COVID is certainly uncharted territory for everyone, we are finding that our market and partners are taking a proactive and comprehensive approach across the country to overcome the evolving challenges. With this diligence we have been able to ensure our projects meet schedule and budget goals while also maintaining a safe and healthy work environment. We are pleased to share that, to date, all of our projects are either on or ahead of schedule which is a testament to the thoughtfulness of our teams, the dedication to accomplishing goals and most importantly, the strong collaboration and partnership between our team members and university partners allowing us to successfully overcome each challenge presented by the unique environment we currently find ourselves navigating.