Insights | 13th Jul 2022
An Inside Look at the Construction Market
As the market rebounded from the pandemic this past year, we’ve seen a boom in projects, particularly the healthcare and private developer-led projects. The healthcare market has grown rapidly and is expected to continue its growth. Colorado has four major hospital systems in the state, and all are working on expansion projects. With our rapid population growth, hospitals have exceeded their master plans faster than anticipated. Not only is healthcare expanding, but medical research has also seen strong growth. Boulder, Longmont, and Louisville are poised to become hubs for bioscience companies in the Midwest in the next few years and will be needing space to grow.
In the development sector, low interest rates created great building conditions with most projects being fully leased prior to construction start. While we anticipate a slow-down in this growth over the next 12 months, the severity of the dip will depend on interest rates and overall market optimism. Inflation, rising construction costs and supply chain issues will also continue to play a role in both development and construction growth. We anticipate the market will eventually stabilize, but we are not likely to return to pre-pandemic rates anytime soon.
Partnership will be more important than ever when navigating this new construction landscape. Best value is no longer the cheapest price. It will be advantageous to bring contractors on quickly to lock in materials and costs. With material prices and lead times fluctuating monthly, transparency and trust are key to keeping your project on schedule and in budget. Often the cheapest price will struggle to hold through to completion without a skilled and engaged team monitoring the market helping the owner decide when to buy volatile materials. The right contractor will focus on being competitive on price, but more than that will seek creative and intelligent solutions for challenges that arise throughout construction and preconstruction. The contractor is your advocate and expert in the market.
In our experience, the key to successful partnerships has always been mutual respect and trust. Not only is it important for us to foster an environment where our clients trust us to construct their building with safety and quality, it is important for us to return that trust to our clients. In every construction project, challenges arise, and rather than hide issues, we bring them to the owner and architect as soon as possible. We trust that our clients are the experts on their building. By involving the entire project team when a problem arises, it results in the best outcome for each member in less time.
Eric Blanke, Vice President of Business Development