With all the new products coming to market these days, it can be difficult to stay abreast of important changes that could affect your business—and the decisions you make about which products are best for your developments. Tracking trends in product performance and perceptions can help. By remaining current with independent product research, multifamily pros not only can put themselves in a better place to quantify overall project performance, but, in so doing, help improve product development, as well.
For the 2017 Multifamily Executive Concept Community, JPI and BGO Architects are using research from The Farnsworth Group and other sources to understand usage and perceptions regarding next-generation product efficiency performance. The research findings highlight current trends in next-gen products, such as where they're being installed and what efficiencies they offer. The findings also help the Concept Community team quantify process and performance improvements before, during, and after construction.
Below, several of the 2017 Concept Community's sponsors offer insight into how their products and services aim to realize better product and project efficiencies while also attempting to help solve some of the industry’s most pressing issues.
Superior Supply Stream
With the hundreds of products that are specified for a multifamily project, and the paths they must travel to arrive on the jobsite on time and unscathed, project managers have to find efficiencies and cost savings wherever they can, including from their suppliers.
Installing the products it offers gives Associated Materials the chance to better understand, and adapt to, its customers' needs. Additionally, being a vertically integrated company allows AMI to communicate directly with its manufacturing plants about macro-level issues, such as market conditions, and how they may influence modifications to the company's product offerings.
AMI also uses technology to try to optimize efficiencies of scale for developers. The company's Installed Sales Solutions (ISS) software provides developers instant access to all details of an order, says Chad Dietz, AMI vice president. “ISS represents the evolution of the relationship … fewer trade and supplier partners leads to ease of business, issue resolution, and production time for the general contractor and the owner.”
To have a development in which to use building products, of course, the developer much first be able to finance the project. And, as with products and technology, access to capital and favorable terms are constantly subject to market volatility, making it challenging for developers to identify and leverage promising financing opportunities.
The uncertain federal budget situation further complicates matters. With Fannie Mae and Freddie Mac operating in a capped lending environment, HUD under constant pressure of regulatory approval and changes, and banks facing increased regulations and limitations on real estate exposure, it's critical developers know what source of capital is the best value at the right time, says Brendan Coleman, managing director of real estate finance at Walker & Dunlop, another sponsor of the MFE Concept Community.
Walker & Dunlop focuses on providing speed and certainty of execution to lock in on target opportunities for its clients. If the financing process doesn’t move quickly enough, that often means the project needs gap capital. But finding gap capital can be expensive and time-consuming, which can, in turn, pose a number of risks. If the deal takes too long, for example, the funding source can run out of capacity, or rates can change dramatically. A slow execution can also lower the returns if more cash is required; reduce the equity stakes if more partners are needed; or even cause participants to miss out on a deal altogether.
Regardless of how the project's potential profitability is being assessed, the numbers can be very tight when making bids or conducting transactions. “An extra month in process or 0.50% in rate due to lender error will usually put any of these deals at risk,” says Coleman.
The last point is critical, because multifamily developers and owner–operators rank return on investment as the No. 1 factor in deciding whether to invest in next-generation products and processes, according to The Farnsworth Group's Concept Community research.
The Finished Product
After the financing is in place and the supply chain is working seamlessly, the development team still faces code issues, skilled-labor shortages, rising land costs, and the like. But, recently, a new challenge is starting to surface: The industry is transitioning from suburban stick-frame construction to more mid- and high-rise building.
Many construction professionals, from developers to installers, aren't prepared to make the jump to this more-complicated manner of construction, says Herman Lopez, national account manager at DuPont Tyvek, whose company, like some other building product manufacturers, is finding ways to help developers create efficiencies in the learning and adoption process.
“By engaging at the developer/designer level, we can work to ensure that all codes are met, design hurdles are overcome, installers are trained, and warranties are issued to meet the demands of the owners now and in the future,” Lopez says.
As the MFE Concept Community team has found, driving innovation takes a massive collaborative effort from all parties involved. Similarly, industrywide, developers are finding ways to work with suppliers to create more value from the products they select and use fewer middlemen in the process, adds Lopez. Technology and on-demand communication are helping fill gaps that existed in the past, to minimize inefficiencies, maximize use of time, and save money.
When everything in the construction process goes smoothly, the project time lines can be substantially reduced.
“We work very hard to become a trusted adviser and partner to our customers across the entire value chain,” Lopez says.
Supply efficiencies are only a small part of what Dupont Tyvek is offering this year's Concept Community: The project is being designed with a weather-resistant barrier and membrane, resulting in a building envelope that will prevent air and moisture from traveling between the membrane and the building substrate.
Discover more product and process innovations by following the Concept Community online at www.multifamilyexecutive.com/mfe-concept-community and by registering for the 2017 Multifamily Executive Conference (www.mfeconference.com), where the project will be revealed in Sept. 18–20.