All of these sound great, but what does it actually mean for our industry?

Well, LEED actually stands for “Leadership in Energy and Environmental Design”.  

LEED standards were created to do several things:

To define “green building” by establishing a common standard of measurement
To promote integrated, whole-building design practices
To recognize environmental leadership in the building industry
To stimulate green competition
To raise consumer awareness of green building benefits
To transform the building market

LEED Certified Buildings are supposed to use resources more efficiently that buildings constructed simply using standard building codes.  A LEED building often creates a healthier working environment for the employees which has been linked to higher productivity among the workers in the building.

However, there are currently some “downsides” to building a LEED building.  When an owner wishes to pursue a LEED Certification, there are often additional design and construction costs that will be incurred.  Also, due to a lack of availability of manufactured construction products that meet LEED standards, there can be significant construction delays.  These negative aspects of “green construction” should diminish as more construction of this type takes place, so in the future things should only get better in this regard.

Additional articles will follow soon to provide additional information on LEED standards and construction practices.  So come back often to check on that.  If you have any comments or questions about LEED Certification or green construction practices, please leave a comment below or contact me.

As you might imagine, any piping that contains water and is exposed to freezing temps for a prolonged period of time is at risk. 

However, one item that many facility owners and managers rarely consider is their fire sprinkler system.

With the normal balmy temperatures in the southeast, the standard design parameters for fire sprinkler systems don’t require extra freeze preventative measures on “wet pipe” systems.  In most winters, this is perfectly fine and the systems operate without a hitch.

But in the past week, we received several calls from clients wondering why their system is having trouble.  They are wondering if something was installed incorrectly or should have been more heavily insulated.  The answer is most likely “no AND yes”.

No, the system wasn’t installed incorrectly.  The fire sprinkler subcontractor designed and installed the system according to accepted practice and code requirements for our region.

But at the same time, yes, there might could have been some additional insulating measures designed into the work to provide some insurance against the unlikely possibility that temperatures in Alabama start to resemble temperatures normally reserved for the Northeast!!

The best answer I can give to help with preventing this from happening on YOUR next project is to work closely with your architect and engineer.

When you are discussing the options related to insulating your facility and protecting mechanical systems like plumbing and fire protection, be sure to discuss what type of fire protection they are recommending and also what steps are designed into the project for freeze protection.

It could be that adding some heat tape or routing the pipe in a different manner could save some headaches down the road.  If you have any thoughts on this topic, please leave a comment below.  If we can help you in reviewing the design for your next facility, please contact us!!  We would be glad to assist you!

The Effect on the Labor Market

The labor sector of the industry is one area where there is a definite recessionary effect on price.

Most subcontractors, whether they are electricians or roofers or concrete finishers, are feeling the pinch and have taken steps to cut their prices to levels not seen in many years.  The construction boom of the late 1990’s and early 2000’s allowed most trades to “name their price” in regard to their services.

There was more work to be done than the skilled labor market could bear and prices increased as a result.  Now that the housing market has come to a halt and commercial construction prospects are not much better, the upward trend in subcontractor prices has reversed course and is headed downward quickly!

If you couple the lack of work with an abundance of subcontractors who have nothing to do, and it makes for an owner’s dream when it comes to discounted prices!!

The Effect on Building Materials

The material sector is a little harder to put a finger on.  There are some items that are selling for less than what they were 2 or 3 years ago.  But there are also just as many that cost as much or more than they did 2 or 3 years ago.

Part of the reason is simple supply and demand.  When lumber prices dip because there is a lack of demand, then the lumber mills start to close down which dramatically cuts supply.  This seesaw effect creates an equilibrium in the marketplace and slows the rapid price decline.

Other materials like roof shingles escalated with the increase of petroleum prices a couple of years ago and tend to mirror the price rates of the fuel market.  However, both of these material examples are also effected by seasonal and environmental factors.

When summer rolls around, bringing sunny days and milder weather, construction picks up and so do prices.  Also, with the summer conditions comes hurricane season.  Oddly enough, shingle prices increase at the potential for a hurricane (whether we have actually had one make landfall or not).

The Effect on Appraised Value

The unfortunate factor which indirectly affects each construction project is what the economy says the project is worth.

Yes, you may build your million dollar facility for $900,000 and save that 10%.  But when the appraiser runs the numbers and says your million dollar facility is worth only $910,000 (thus cutting your equity by $90,000), did you save 10% or just 1%?  That is for you to decide.

In Conclusion

As you can see, there are some significant effects of the economy on the direct and indirect costs of a construction project.  But in the end, it is still a great time to build a building if you have the working capital to get off the ground!!

If you know of other economic factors that would affect construction costs, please leave a comment or feel free to contact me.