Tag: construction

• Studio Gang in Amsterdam

  Slate Asset Management, RAD Marketing, and the top producing brokers for One Delisle were fortunate enough to be able to tour a Studio Gang-designed project in Amsterdam today called the Q Residences. A huge thanks to the developers — Kroonenberg Groep and Neoo — for their time and hospitality this afternoon.

  Here are two photos of the exterior:

  

  

  The building, which is a mixed-income rental apartment, is still under construction, and occupancy is expected sometime this fall. The structure is poured-in-place concrete, but the balconies were all pre-fabricated and installed on site. You can tell this by looking near the top of the above photo.

  Here are a few other interesting takeaways from the tour:

  – 40% of the complex is social housing (which is housed in an entirely separate but similarly impressive building); this is a mandatory requirement

  – The land is owned by the city and is being leased to the developers; the lease rate was discounted to account for the social housing requirement

  – The entire building uses in-floor heating and cooling, so there are no ducts or bulkheads in any of the suites (slabs are all about 300mm to accommodate this)

  – The balconies all have a rainwater collection system, which is mounted and concealed on the exterior of the building (it rarely goes below freezing here I am told)

  – The parking ratio for cars is very roughly about 0.5 per unit and the bicycle parking ratio is very roughly 3 per unit (remember this is the bicycle capital of the world)

  – Structural system is mostly shear walls; they also have some post-tensioning in the slabs

  – Less reliance on metal wall studs; instead they use a more expensive block-like system that offers more rigidity and better sound attenuation (I will look for the exact specification)

  – There is also this odd/interesting requirement that all of the suites have an operable window that can provide both natural ventilation and sound attenuation; in other words, it needs to let air in and block sound at the same time

  Here’s what that looks like at Q Residences:

  

  

  We don’t have a requirement like this in Toronto and so that’s why I used the word odd. We have ventilation and sound requirements, but they don’t need to be solved simultaneously in this same way.

  Why I also think this is interesting is because I think it speaks to a greater reliance on natural ventilation over active mechanical systems. In Toronto, the underlying thinking is that if it’s too hot and noisy, it’s just a matter of shutting your windows and turning on the AC.

  Of course, we obviously we have to manage around a very different climate, so I don’t mean this as a criticism of Toronto codes. It’s just an observation.

  If you aren’t familiar with the Q Residences, or the work of Neoo and Kroonenberg, I would encourage you to search around online. The project is gorgeous and so is the rest of their work.

  2022.05.05

• Construction update: Junction House

  

  This is a photo of Junction House that I took this morning after our weekly construction meeting. The team is currently preparing for the first concrete pour of level 4 (each floor has been split up into three pours). We’re now flying our forms, which means that we’re able to move a lot faster. This is the exciting part of a new build mid-rise like Junction House. The underground garage part is like watching paint dry.

  We’re scheduled to be topped out by this summer, so expect some gratuitous view photos on the socials.

  2022.03.10

• Lobby / co-working space at Junction House

  

  

  

  It has been cold and snowy in Toronto lately, which is great if you’re looking to shred pow on a snowboard, but suboptimal if you’re trying to construct buildings. It pains me deep inside my bone marrow when we lose productive days to weather. But what can you do?

  I was, however, thrilled to see this first glimpse (pictured above) of the lobby / co-working space at Junction House this morning. The slightly elevated section (which is the point of view of the above rendering) is the co-working area.

  The reason it’s elevated is that we needed the clearance below for our parking ramp. We thought about trying to make it retail, but a place for residents to hang out and work seemed like a pretty good idea.

  A lot of us on the team are big fans of a great hotel lobby bar, but that’s kind of challenging to do in a residential condominium. This is maybe the next best thing. It’s been very popular with purchasers so far, but I’m looking forward to seeing how it performs in real life.

  2022.01.27

• The elbow suites

  Last night as I was walking home, I came across the recently completed Yonge + Rich condominiums at Richmond and Victoria (I think they won awards for this name back in the day). I stopped to look up because I was curious about one particular detail — the elbows.

  This tower is, in effect, two towers that are attached in middle. And the differing facade treatments are meant to reinforce this: two towers, not one.

  But because they are in fact connected, there are some unavoidable 90 degree angles in the floor plates. These spaces can be extremely tricky when it comes to laying out residential suites because they skew your ratio of square footage to vision glass. Usually you get too much of the former relative to the latter. You can also get awkward facing / privacy conditions.

  And so these spaces are often referred to in the industry as the “elbow” suites or sometimes the “armpit” suites. Though I think elbows are a lot nicer than armpits.

  Here’s the Yonge + Rich example to illustrate what I’m talking about:

  

  

  In this case, the entire stack is comprised of frosted translucent glass. So it is pretty clear that these spaces are not residential suites. Here’s the floor plate:

  

  What was done here was to make it circulation/corridor space. This solves the elbow suite problem and adds a nice feature to each floor. These days, very few corridors have natural light. Vision glass is too precious of a commodity. You could argue that it should have been clear glass, but presumably frosted glass was used to avoid privacy concerns.

  The other trade-off that needs to be considered is that of efficiency. What is the ratio of saleable/rentable area to gross construction area? Adding circulation space lowers this number. So it can come down to whether it is better to have a higher efficiency with some elbows, or a lower efficiency with no elbows.

  Every building is a prototype, isn’t it?

  2021.12.22

• Why construction productivity sucks and how it might be fixed

  

  We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.

  One of the challenges with construction — and this is will documented — is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it’s been mostly negative in recent history.

  The obvious thought is why not just apply what we’ve been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.

  Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.

  From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical “pre-fab” approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.

  The second option has to do with better software and hardware. What if we had significantly better “digital twins” for our buildings such that we could see and experience it in 3D before it is physically built? I’m thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.

  In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn’t seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.

  Photo by Di on Unsplash

  2021.11.27

• Zillow pauses algorithmic homebuying business

  Zillow just announced that it has paused its (algorithmic) US homebuying business for the remainder of this year. The company acquired some 3,800 homes in Q2 of this year and, apparently, it now has a backlog of repairs and sales to work through. As a reminder, this business model, which is sometimes referred to as iBuying, is based on using algorithms to quickly value and buy homes (mostly online). The homes are then renovated and flipped for a profit. The problem, as most of you know, is that this pandemic has, among other things, disrupted construction supply chains and made it difficult to hire people. That has hurt the renovation component of this model.

  Today’s news was bad for Zillow’s stock, but good for Opendoor’s stock, which is their main competitor. Opendoor subsequently came out and announced that they remain open for business. (Disclosure: I am long $OPEN). But this announcement is perhaps a good reminder that buying and selling real estate remains a different animal than, say, buying and selling stocks. And so there are some perfectly understandable reasons for why real estate hasn’t been disrupted by the internet in the same way that other industries have. Matt Levine does a great job explaining this in his recent column, “Sorry, Zillow’s Computer Can’t Buy Your House Right Now.”

  Here’s an excerpt:

  “I’ll pay you $350,000 for your house as long as a human can go out there, look around, and make sure that price isn’t wildly off” is an interesting model but it’s not quite the same as “push this button to sell your house for $350,000.” And “I’ll pay $350,000 for a house and then send out a crew to replace the carpets” is not quite the same as “I’ll pay $350,000 for a house and flip it 20 minutes later for $355,000, collecting a small spread for providing liquidity.” Computerization has come into the housing market, but it hasn’t taken it over yet.

  One of the challenges is that the supply of homes is heterogeneous, even in a suburban community or in a multi-family building where you might have the same set of floor plans that repeat. Because maybe the home has been renovated and fit out entirely in gold. Or maybe it’s the opposite and it has been poorly maintained. There are variables to contend with that have historically necessitated more rather than less human involvement. Homes are also something that don’t trade all that frequently, which is less than optimal when it comes to online marketplaces.

  But what if buying and selling a home was dramatically cheaper and easier to do? How often would people actually do it? Presumably more often. I agree with Matt that “computerization” hasn’t taken over the real estate industry just yet. But algorithmic homebuying still appears to be one of the more promising approaches.

  2021.10.18

• Urban China’s empty homes

  

  China Evergrande Group has been in the news lately for being one of the most indebted property companies in the world. The company is now looking to raise some $5 billion by selling a stake in one of its business lines. That seems like a lot of money, but apparently it has upwards of $300 billion in liabilities. As I was reading about the company (in this WSJ article) I was surprised by some other stats about China’s housing market. According to some sources, nearly a third of the country’s GDP can now be tied back to real estate-related activities (see above chart). On top of this, about 21% of homes in urban China were thought to be vacant as of 2017. This equated to about 65 million empty homes. I don’t know what the exact numbers look like today, but these are staggering figures that speak to overbuilding.

  Chart: WSJ

  2021.10.04

• Construction is right-skewed and fat tailed

  My friend Christopher Bibby sent me this article over the weekend. It’s by Brian Potter — who writes an excellent newsletter on Substack about construction things — and it’s about why it’s so hard to innovate in construction.

  To explain this, he starts by showing that the distribution of cost outcomes in construction projects tend to be both skewed toward the right and “fat tailed.”

  What does this mean? It means that construction projects have a tendency to run over a budget. And that they are much more likely to be over budget than under budget (right-skewed distribution). According to some data from the US Navy, the difference in likelihood is 10x.

  At the same time, there are also instances where projects don’t just run over budget, they run really over budget (fat tail). All of this is different from your normal distribution where you have a symmetrical curve and thin tails. I guess construction isn’t normal.

  One of the reasons for this abnormal distribution is the fact that construction suffers from what Brian calls “cascading failures.” This is kind of intuitive, but it is everything in construction: In order to complete Y, you need to complete X. If X is delayed, then everything is delayed.

  Because of these dynamics, changes to the construction process are perceived as incredibly risky. This has created a bias toward incremental rather than fundamental innovations.

  For the full article, click here. It’s worth a read.

  2021.08.03

• Construction is messy

  The typical way to build buildings is through a design-bid-build approach. The way this works is that you first design stuff and create drawings. You then ask people to price the stuff that you have drawn. And then you proceed to build what is on the drawings and what has been priced.

  There are a number of possible risks with this approach. For one, the design/drawing phase is sometimes/often done in isolation without a lot of feedback from the contractor and/or subcontractors. So you might be designing and drawing things that aren’t all that feasible or constructible. Pre-construction involvement helps address this.

  Another risk is that you’re buying what is on the drawings. So if the drawings suck or aren’t properly coordinated, then you are likely opening yourself up to a barrage of change orders and lots of additional costs.

  In theory, it all sounds fine. Here are my drawings and specifications. Give me a price. And then let’s build. But as many or most of you will know, it’s generally never that simple or easy. Though it will, of course, depend on the type and complexity of the project.

  Another consideration is the kind of contract you enter with your constructor. Is it a cost-plus contract, where the constructor simply charges a percentage on top of whatever the costs end up being, or is it some kind of lump sum or guaranteed maximum price (GMP) contract?

  While I was in architecture school I decided to take a class on construction delivery methods. The instructor was, in my mind, your quintessential construction person. He was built like a brick shithouse and he never minced words. He also had a voice that sounded like a subwoofer.

  I wouldn’t say I’m an expert, but I do remember him hammering home two points. One, GMP actually stands for guaranteed minimum price. This is forever imprinted in my mind. You’re never going to pay less and you’re almost certainly not going to pay the “maximum” number. You will end up getting change ordered and paying more.

  Two, lump sum and at-risk contracts create a very different relationship between owner/developer and constructor. In his words, it is adversarial.

  Because if I’m a constructor and I’ve promised a specific number, I’m likely going to do a few things. I am going to inflate the numbers to make sure my profit margin is protected throughout the project. And if my profit margin gets squeezed, which it likely will, I’m going to look for other ways to make money.

  Personally, I side towards cost-plus and construction management arrangements. I don’t want an adversarial relationship. I want a partnership where there’s as much alignment as possible around a common set of project goals. Let’s ride or die together.

  Similarly, when it comes to the actual procurement and delivery methods, I find that we are often using more integrated approaches as opposed to cut and dry design-bid-build approaches. You want the competitive pricing that comes with bidding, but you also want collaboration. It’s about striking that right balance.

  The construction process is a messy one. These are just some of my thoughts this morning. If any of you have any insights, I would, of course, welcome them in the comment section below.

  2021.07.24

• New 3D-printed bridge erected in Amsterdam

  

  

  This 12-meter 3D-printed stainless steel bridge was recently erected in Amsterdam. As is par for the course, some people hate it and some people love it. I’m in the latter camp.

  Designed by Joris Laarman Lab in collaboration with MX3D and Arup (engineering), the bridge was printed off-site over a 6 month period and then craned into place.

  3D printing stuff isn’t new; but it is interesting to see the technology being used for this real world application. Supposedly it’s the first 3D-printed stainless steel bridge. There are claims out there for other materials.

  What is also interesting is that the entire bridge has been outfitted with sensors so that things like pedestrian usage, corrosion, and load changes can be measured going forward.

  Construction is generally a messy process. And it’s kind of amazing how little it has changed over the years. I don’t think that there’s any question that this represents the future of building.

  Images: Thea van den Heuvel via Dezeen

  2021.07.22