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Any long-time readers of Hard Hat Chat have probably picked up on the fact that I’m a big fan of the negotiated bid.  Our firm takes pride in being a true partner to our clients, and we believe a great way to elevate that client relationship is to work on a negotiated basis – a process where the client hires a general contractor early-on in the project after agreeing on general conditions and a contractor fee. The GC then works with the client to budget the job based on pricing from subcontractor partners.  

Of course, like any national commercial contractor we also do our share of work on a competitive bid basis where construction firms submit bids for a project based on a set of plans provided by the client, and the client subsequently awards the project based on those bids. While there are valid reasons a client might go the competitive bid route, there are many more scenarios where the negotiated delivery method is better for all parties. Here are just three:

The Project Is A Brand-New Concept

It’s always exciting to partner with a client on a new concept or prototype. Whether it’s a completely refreshed design for an existing restaurant brand or an entirely new business model, such as a unique idea for a family entertainment venue, we love working with clients to figure out how to make their design intent become a reality as efficiently as possible. But with a brand-new design, there are inevitably going to be unknowns that don’t come up until construction is underway, as well as design changes to make sure the finished project matches the client’s vision.

That makes the negotiated delivery method a smart choice for any “first time” project, especially if it’s a prototype that will eventually be rolled out in other locations. Working on a negotiated basis for the initial build-out puts the GC in the best position to work out any kinks in the prototype plans that become evident once construction starts, without it resulting in a costly change order.

Additionally, since the client is typically privy to subcontractor bids with a negotiated project, they get a clear understanding of the cost ranges for specific elements – much more so than a competitive bid, where bidding GCs might undercut pricing on certain trades in order to win the job. That pricing intel is extremely valuable when the client then goes on to build the same prototype in different markets armed with a reasonable expectation of costs.

It’s A Multi-Phase Project

Many large or complex construction jobs are budgeted and built out in phases. But rather than award these projects to GCs in phases via a competitive bid, clients should make the most of their general contractor relationship by working on a negotiated basis.

There are several benefits to doing so. First, the GC becomes a point of consistency for the project, helping ensure the client’s design intent and brand standards are maintained from start to finish. Also, a negotiated approach means the GC can identify efficiencies across all phases, whether it’s cost savings from having one trade bid and perform work for multiple phases at once, or scheduling considerations such as anticipating conflicts between work happening at different project stages. By not being locked into a competitive bid package, the GC has the flexibility to look at the big picture and make recommendations to the client taking into account the entire scope of the project.

Project Plans Are Not Fully Finalized

We get it – there are any number of things that can come up prohibiting the professional services team creating fully finalized plans. Maybe the lease deal is taking longer than expected, or maybe there are design changes requested during municipal approvals. We understand the client might still need to move forward with their GC as some details are ironed out, so as not to miss a projected completion or opening date. But by going out for a competitive bid with “design development” (DD) drawings, rather than final plans, clients can really get hurt by cost overruns. That’s because in a competitive bid, GCs are only planning and pricing for exactly what’s in the drawings – anything different or beyond those drawings will mean additional costs via change orders and likely delays.

An example of this was a restaurant/hotel project in downtown Chicago our team was asked to bid by a previous client. We told the developer/owner the plans weren’t complete enough for us to feel comfortable moving forward and declined to participate in their competitive bid, so the project eventually went to another contractor. Fast forward several months and we heard that not only was the project shut down for several long periods as details in the drawings were finalized, but that it also ended up seriously overbudget due to changes in the design from the documents that were originally used for the competitive bid.

A better solution in this case would have been for the client to work with a construction partner on a negotiated basis. With the GC’s fees and general conditions costs agreed on up front, the GC would have been in a position to budget and schedule the project concurrent to plans being finalized – and with full client input.   

While a negotiated bid isn’t always the route our clients go, I can’t say enough about the transparency, open communication and flexibility it affords. And all those things add up to a great client-contractor relationship, which is always key to a successful project.

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Most people think of commercial construction as a physical, “bricks and sticks” industry. But if you ask me, commercial construction is first and foremost about relationships. After all, the strongest foundation you can give any commercial construction project is a solid partnership between the client and the commercial contractor. That’s why at Englewood Construction, we work hard at building relationships at every phase of business – starting with our business development efforts and continuing across multiple touchpoints with current and prospective clients. Here are three examples of great customer relationship management practices:

Opening New Doors: 

Growing a business often entails thinking outside the box about where and how to mine opportunities, so having an extensive network of relationships to tap into is incredibly important in making new connections that lead to new business. To that end, we recently added to Englewood’s business development team with the hire of Casey Urlacher, who is the current mayor of Mettawa, Ill., a former Arena Football Player and the brother of NFL Hall of Famer Brian Urlacher.

At first glance, Casey’s resume is a bit unorthodox for a commercial construction company. But looking deeper, Casey’s experiences spanning business, professional sports, local government and even several restaurant and real estate development ventures have given him valuable assets that readily translate to commercial construction success: a robust personal network and skill at creating and maintaining great connections. Plus, there’s a lot of crossover between the world of professional athletics, where he already has strong in-roads, and the restaurant industry – a commercial construction sector where Englewood has a proven track record, especially with fine-dining and sports-based concepts such as the Chicago Sports Museum and Harry Caray’s 7th Inning Stretch.

Casey is a great example of why it’s important not to pass on a great hire just because their commercial construction experience isn’t typical. Think creatively about what employees bring to the table – particularly with the current tight hiring market in this industry.

Building Long-Term Partnerships:

Building good customer relationships is important not only in opening up new doors and opportunities, but also in establishing long-term connections that can be incredibly fruitful. When I was a young laborer, I was working a project at 900 N. Michigan Avenue on Chicago’s Magnificent Mile when one day I met the retailer’s construction manager and we hit it off immediately. We kept in touch as I moved to the project management side of the business and he moved around to positions with several national retailers. He’s remained a client for more than 28 years – spanning projects with at least six different brands he’s worked with in that time.

While my personal relationship with this client was one reason Englewood continued to be his contractor of choice across different brands, another factor was that Englewood repeatedly executed quality work time and again. The proof is in the pudding, and there’s nothing like a series of smooth and successful projects to serve as the basis for a long-term partnership. It’s also important to nurture those connections. Simple steps like reaching out to thank a client you’ve worked with for more than 10 years, or putting in a call to check in even when there isn’t a job on the table, can go a long way toward building goodwill and staying top of mind.

Expanding Existing Customer Relationships:

And sometimes a good relationship can become a better relationship. One way we have expanded existing client relationships is through Englewood’s Facility Management group, which we launched several years ago. We’ve found that one of the benefits clients appreciate most about using Englewood for facilities management is that they can turn this function over to a trusted partner – a contractor with which they already have a relationship and high comfort level. And for us, it’s yet another avenue for us to deepen a client relationship by serving them in a different way.

In fact, we were recently tapped for facilities maintenance work by a high-end day care provider who has been a client for more than 10 years. Our past work with this firm entailed building out new locations for them across the country, so when they decided to outsource facility maintenance they were happy to know we also offered those services. Now, we’re handling Facility Management and maintenance for a large percentage of this long-standing client’s Midwest fleet.

Ideally, a general commercial construction contractor isn’t just a vendor or service provider, but instead a true partner a client relies on to guide them through the construction process. No matter how it begins or where it takes us, it’s the relationship at the heart of it all that leads to success.

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One of the biggest challenges for commercial construction firms today is the tighter project timelines that have become the norm at every phase of a project – from shorter deadlines for submitting initial bids and budgets, to quicker resolution on addendums and change orders, to compressed schedules for construction and delivery. Today, we push to build out a restaurant in 22 weeks instead of the 30 that used to be typical, and our target turnaround for a hotel project has gone from 10 to 12 months to an 8- to 10-month timeframe.

This trend reflects the sense of immediacy that is pervasive across the modern business world.  But as our clients and their project partners look to construction firms to deliver information and completed commercial construction projects at a faster pace than ever before, they should know there are a number of things they can do on their own end to help maximize efficiency:

Involve your commercial contractor in the pre-construction planning process.

Rather than waiting until a set of plans is finalized and then asking a GC to bid and budget them, clients should bring a trusted construction firm to the table along with other project partners during initial planning. A GC’s perspective is extremely valuable at this early stage in identifying factors that could impact the construction timeline. This could be anything from a commercial construction site where access is limited – thereby necessitating precise scheduling for the delivery of equipment and materials – to specifications for special-order tile or millwork that require a significant lead time.   

Likewise, involving a GC early can help avoid issues that potentially cause delays later on. For example, the GC might review initial plans and spot a conflict in the layout of mechanical systems. It’s much better to catch something like this while the project is still ‘at the drawing board,’ rather than discover the issue in real time on the job site, and have construction halted while a work-around is found.

Invest in detailed project plans.

Most people would be surprised at the range in the quality of the plans a general contractor receives to start bidding and budgeting projects. Best case scenario, we get fully detailed drawings with separate overlays for each mechanical system and trade. But it’s not unusual to be asked to start putting costs together with a lot less to go on – sometimes just a rough sketch that raises a lot of questions.

While a skilled GC can call on their experience to make assumptions about missing information, it does require more time because we have to go back and confirm those details with the client. And if the client changes their mind after we’ve started work, or has something different in mind, it takes even more time to resolve. Bottom line – the more detailed and final the plans are from the get-go, the more comprehensive we can be during budgeting and planning. That means fewer questions, fewer surprises, and fewer of the changes that inevitably lead to delays.

Embrace your contractor’s project management technology.

Today, all sophisticated construction firms use some type of project management software to run their jobs. More than just a tool to keep the GC’s team organized internally, these platforms are a great way to streamline communication among the entire project team by providing a communal forum for input. If there’s a question, clarification or addendum to any project element, the project management portal allows all parties to access relevant information and plans and comment in real time.

Ultimately, a project management portal can result in fewer bottlenecks in the construction schedule due to waiting for feedback or resolution on questions. However, to maximize effectiveness, it’s imperative that everyone on the project team – including the client – is on board and using the platform as a shared communication channel.

Communicate and have realistic expectations.

Commercial general contractors understand the scheduling demands our clients are up against – whether they’re trying to hit a firm opening date for a new restaurant or retail location, or simply minimize the amount of time their business is closed or impacted during a renovation. We love when our clients communicate with us about these factors, as it helps us understand what’s driving their deadlines and do all we can to meet them.

At the same time, a conversation about schedules and timing should be a two-way dialogue. We can be a resource to help clients understand the outside factors that might impact their project’s turnaround time – such as the ongoing construction labor shortage, which means subcontractors are busier and more difficult to schedule. By communicating, we can work together to set a project timeline that is aggressive, realistic and ultimately successful.

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After nearly 10 years of publishing Hard Hat Chat (more to come on our blog’s 10th anniversary later this year), we know there’s never a shortage of fresh topics and trends to discuss in the commercial construction industry. At the same time, some subjects seem to come up again and again, whether on this blog, in the news media or in conversations with clients and colleagues.

Lately there are three topics in particular that we just can’t quit talking about – primarily because they are having such a big and long-lasting impact. Here they are: the commercial construction headlines that just won’t die – and why:

Labor Shortage Lingers On

We’ve highlighted the ongoing labor shortage in our year-end commercial construction trends blog posts for at least the last five years, and based on what we’re hearing, seeing and experiencing ourselves, there’s just no end in sight. It’s the result of a perfect storm stemming from the economic downturn, when not only did many construction firms and subcontractors go out business, but a number of workers left the industry permanently. Add to that the subsequent economic recovery when construction activity rebounded, and many construction firms just didn’t have the manpower to meet the upswing in demand.

The good news for subcontractors is the labor shortage means higher profitability, because they are working at-capacity and able to charge a premium for their services. But for general contractors and our clients, the result is higher project budgets and challenges in construction scheduling.

There’s no magic bullet that will resolve this issue, but I am certainly optimistic when I see the number of young workers entering the field at all levels – from laborers up to a new crop of building construction management graduates. And when construction activity levels even out, as they are sure to do, this industry’s labor pool will find a new equilibrium.

Let’s Talk About Commercial Construction Tech

In my nearly 28 years in this field, there’s never been as much conversation about the role of technology in commercial construction as in the last five years. This has always been a slow-to-evolve industry where the basics of putting brick over mortar, swinging a hammer and laying steel haven’t changed much in decades. But lately I’m reading more about high-tech construction solutions – from the usage of BIM and drones on job sites, to new software options that streamline project management, to wearable tech for construction workers.

As hard as it is for a veteran guy like me to admit, there’s a new generation of younger workers in this field who want and expect to use technology in their workplace. Technology is second nature for them, and they are increasingly taking on decision-making roles in evaluating which innovations to implement. As these workers move into leadership positions, and a new wave of high-tech solutions is developed, we’ll see exponential growth in technology use across construction firms of all sizes.

At the same time, it’s not always practical in business to be an early adopter. Sometimes, the latest software, drone or robot is simply too expensive for us to invest in or to justify passing the cost along to our clients. But it’s always important to stay abreast with what’s out there, particularly as new innovations become part of our industry’s best practices.

Reshaping the Retail Landscape

Ever since the economic downturn and subsequent recovery, the commercial real estate world has been alive with ongoing discussion around the future of the retail sector, particularly with e-commerce taking a bite out of the market share of traditional bricks-and-mortar brands. Most recently, the shuttering of Sears, Kmart and Toys R Us has led to seemingly endless speculation about what to do with the resulting vacant storefronts.

The shifting retail landscape continues to drive conversation in the CRE industry as developers and landlords discuss ways to fill shuttered retail space, such as this vacated grocery store Englewood converted for a big-box brand.

From a construction perspective, we love these conversations because of the opportunities they represent. Certainly, we’ve had less traditional retail construction work come across our desks as a result of changing dynamics in the retail sector, but on the flip side there are many creative ideas and new concepts being pitched to fill vacant retail and drive more foot traffic to existing shopping centers – all of which leads to new construction jobs and clients for us. As retail finds its way in this new landscape and as developers and landlords pinpoint the right strategy for filling available space, I’m confident those retail headlines will become increasingly positive.

Of course, these are just three of the many topics that are creating buzz in commercial real estate and construction. We look forward to continuing the conversation about these and other trends shaping our industry in the year ahead.

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A strong pipeline of senior living construction was a “high” of 2018.

After a busy and eventful year in commercial construction, we always find it valuable to reflect back on the last 12 months and review the positives and negatives that impacted our business – including those that are specific to our company as well as the commercial construction industry as a whole – as we prepare for the opportunities and challenges the New Year is likely to bring. So before we officially ring in 2019, here is our rundown of Englewood Construction’s commercial construction trends “highs” and “lows” from 2018:

High: A Sizable Senior Living Pipeline

We’re exceedingly proud of the growth our firm has experienced partnering with senior housing developers and operators, particularly when we look ahead to what should be a continuing wave of demand from the baby boomer generation. It’s especially exciting to see our scope of work with clients evolve to encompass not only refreshing and remodeling existing senior communities, but also collaborating on adaptive reuse projects. As senior housing developers and owners look to expand their portfolios, particularly in urban areas, we expect adaptive reuse will be an increasingly popular option as clients identify second-generation properties that lend themselves to senior housing operations and also offer highly desirable locations for future residents.

Low: Labor Shortage Shapes Schedules

We’re several years into the construction labor shortage, and it continues to impact nearly every aspect of the commercial construction industry. In 2018, as construction activity set a brisk pace in most markets where Englewood operated, high demand for subcontractors intersected with limited manpower availability. The result was the potential for scheduling complications and missed project deadlines.

Luckily, we were able to avoid most scheduling pitfalls by fully vetting our subcontractor partners to get assurances they had capacity to meet our required timeframe. And in a few necessary instances, we tapped into our extensive nationwide subcontractor network to bring in manpower from outside a geographic market when the local workforce couldn’t meet a project schedule. In the coming year, we’ll continue implementing these safeguards, and work closely with both our clients and our subcontractor partners on new strategies to bring projects in on time in the reality of the current labor landscape.      

High: Restaurant Relocation, Repositioning Feeds Construction Opportunities

Our Restaurant Construction Group was one of our busiest divisions in 2018. What really made this a positive for the year is that our restaurant construction activity spanned such a wide scope of work – from ground-up new construction to conversion and rebranding of existing locations to refresh and interior remodel projects – and such a wide range of clients, including fast-casual, fine-dining and well-known national chains. Spurred on by a strong economy, our clients are taking this opportunity to refresh their locations, introduce new concepts, expand to new markets and even relocate within markets.

Low: Mismatch Between Market Pricing and Client Expectations

In 2018 we saw a higher number than usual of competitive bid projects get killed by market pricing. These were jobs that simply didn’t move forward after the bidding process because, even with multiple GCs submitting their best pricing, construction costs were higher than what was estimated on the client’s pro forma – an analysis that projects a project’s financial return.

Any general contractor has its share of projects fall through due to costs coming in above the client’s budget, but in 2018 we’re chalking this increase up to a combination of factors:

  • Unrealistic developer expectations on their initial budgets and construction cost estimates
  • An overall rise in construction material costs
  • The construction labor shortage, which continues to allow subcontractors to charge a premium since they are operating at capacity

Moving into 2019, we will continue to work with our subcontractors on their numbers, value-engineer projects and do all we can to make deals work. However, it’s also important that we continue to talk with our clients and educate them on the realities of the current construction landscape to better align their budget expectation with today’s market.

High: Remixing Retail

It would be easy to be glum about the future of retail construction given news headlines about major national brands closing locations and mall vacancy rates rising. But despite these factors, we were energized by what we heard at several commercial construction industry events and from our clients about reinvigorating vacant retail spaces. From reconfiguring big-box stores to appeal to a different cross-section of tenants to introducing new retail and entertainment concepts to exploring ideas to use vacant mall anchor stores in entirely new ways, the current retail sector is actually buzzing with opportunity for those willing and able to get creative.

In 2018, opportunities to reconfigure vacant retail space drove the retail construction sector.

Retail construction has been – and will continue to be – a bit of a wild ride with a lot of “highs” and “lows” all its own, but after the past year we have a positive outlook and are pleased to still be active in this sector that has been a staple of our business from the very beginning.     

As we say goodbye to 2018, we’d like to thank all of our clients, subcontractors and suppliers that contributed to another successful year in this business. Happy holidays from all of us at Englewood Construction.

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It has been another successful year for Englewood Construction, and with the calendar flipping over to December we’re excited to see what 2019 will bring. Here are our predictions of the four commercial construction industry trends we expect will shape our work in different sectors – and the construction landscape overall – in the year ahead:

Senior Housing Communities Woo Workers with Facility Updates

I recently attended a senior housing conference in Chicago where a panelist discussed the challenge senior housing operators face in hiring and retaining caregivers and other staff given the high hourly wages offered by employers like Amazon. She noted that in such a competitive hiring market, having attractive and appealing staff areas can make a big difference – including work stations, break rooms and other areas that positively impact the employee experience.

This points to a potential new pipeline of senior housing construction work focused on retooling employee spaces at existing senior communities to be on par with those in new-construction developments. We see this as a natural next step to the work Englewood has already been executing  with senior housing operators to refresh and remodel resident amenity spaces and common areas at older properties. While they are often mostly cosmetic in nature, these projects pose unique challenges in that they involve working in and around an operating facility – making it smart to enlist a general contractor skilled at minimizing disruptions for senior residents and sensitive to their special considerations around scheduling, noise level, safety and communication.

The competitive hiring market for senior housing staff points to a pipeline of work refreshing and updating employee work stations and break areas at existing senior communities.

Developers Think Outside the Big Box to Fill Retail Vacancies

Retail news got pretty negative in 2018, with major brands such as Sears and Toys R Us shuttering and leaving behind vacant stores across the country. But looking ahead to 2019, I see a lot of positive creativity in the way developers and landlords are brainstorming on how to fill these spaces. After all, successful developers and owners aren’t going to sit on their hands and hope a retailer comes along looking to lease 160,000 square feet in their mall – they’re going to do everything they can to make their space attractive to a wide range of tenants.

We’re already in talks with several national developers as they actively reimagine spaces opened up by the wave of Sears and Toys R Us closures. Some are considering breaking up the square footage in new ways, creating opportunities for smaller-format stores in what are often high-profile, high-traffic centers. Others are thinking out of the box and considering bringing senior living or multifamily residences into these sites, capitalizing on the high demand in these sectors. There are a ton of ideas out there and it’s exciting to be part of the process. We anticipate our retail clients will keep us busy in the year ahead as we help realize new potential for these existing spaces.

National restaurant groups expanding in new markets will continue a strong pipeline of restaurant construction projects in 2019.

Restaurants Dish Up New-Construction Opportunities

Restaurant construction has consistently been a strong sector for us ever since the economic recovery, and we expect to see a robust pipeline of work continuing in 2019.  One factor driving this ongoing activity is that national restaurant brands are opting for ground-up new construction rather than retrofitting a second-generation space – even if they are redeveloping a site that includes a shuttered restaurant property. Among our national clients, new construction is preferred because their priority is replicating their concept consistently across the country, so they see more benefit in starting from scratch and building to their own exact specifications rather than attempting to update an older property to their brand standards.

Another trend driving restaurant construction activity is national brands moving within a market where they already have a presence. This is often the result of a more desirable location becoming available, or the brand revamping its concept and deciding to build new on a different site. In either case, the benefit is that the restaurant can continue operations at the original site – without the disruptions of a remodel project – until the new location is ready to open.

Subcontractors Say No Thanks to Off Hours

One side effect of the high level of construction activity across the country and the ongoing labor shortage is that most subcontractors are operating at maximum capacity and are in a position to pick and choose what jobs they take. In addition to driving up subcontractor pricing overall, this more limited availability of subcontractors is also making it more difficult – and more expensive – to engage them for off hours or overtime work because they have plenty of jobs during traditional hours to keep their crews busy.

For example, remodel and renovation projects for restaurant and food service groups is typically done at night or non-peak times, in order to minimize impact on operations. In leaner years for the construction industry, particularly during the recession, subcontractors were hungry for work and were happy to take those night-shift projects. Now, some subs will pass on these jobs altogether, or charge an even higher premium for off-hours work – which in turn can result in overall higher projects costs for our clients.

We know there are more good things to come for our industry in 2019. But before we officially close the books on 2018, we’ll take one more look back on the past 12 months. Be sure to check in with Hard Hat Chat later in December for our post on the highs and lows of commercial construction in 2018.

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Earlier this month, the Englewood Construction team was honored to be recognized as one of the Best Restaurant Contractors in Chicago by Chicago Architects. Given how much restaurant work we do and how important those clients – from national restaurant chains and food service groups to independent eateries – are to our business, it was rewarding to be called out for being among the best in our field.

This recognition also got me thinking about what sets a really great restaurant contractor apart from a general construction firm. I’ve made the comment before that I can plug an experienced restaurant construction team into a retail or hospitality project, and pretty much assume things will go smoothly. But on the flip side, I can’t necessarily drop a construction team that doesn’t have restaurant or food service experience into a restaurant project and automatically expect success.

Why not? Because there are complex details with restaurant projects that are very different from most commercial construction job sites. For restaurant owners/operators to have a successful project, they must find a construction partner with the right experience, know-how and mindset to handle them. Here are three examples of restaurant construction nuances:

Whether it’s a fast-casual, fine dining or specialty restaurant, such as this Harry Caray’s 7th Inning Stretch Englewood built out at Chicago’s Water Tower Place, restaurant construction projects come with a specific set of complex details and special considerations and challenges.

Restaurant Infrastructure Intricacies

Restaurants require a tremendous amount of mechanical infrastructure, specifically for their back-of-house space. A commercial kitchen, no matter the size, will have more water, waste and gas lines installed than many other construction projects. Plus, these mechanicals often are installed underground, before concrete goes in and walls are laid out – so the construction team is essentially laying the grid for the entire mechanical system without any landmarks to guide them.

That means the team has to be incredibly precise and pay more attention to the mechanical roughs than they would with other construction jobs. If they don’t ensure the “stub ups” and “stub outs” – points where mechanicals can be accessed through the floor and walls – are placed in exactly the right position for the planned commercial kitchen equipment and fixtures, then walls and flooring may have to be torn up when those items are eventually installed and hooked up.

Amped-Up Restaurant Construction Inspections

Because of the food service element, there are increased inspection steps for a restaurant project – and typically a higher level of municipality oversight. With any of the MEP (mechanical, electrical or plumbing) inspections, the whole process will be more involved from start to finish, no matter whether the restaurant project is a ground-up new build or an interior build-out. There will be an underground inspection, a pre-pour inspection, a water device back-flow inspection, a final inspection of all mechanical lines before walls are closed up, inspections after owner-vendors such as fountain soda providers install their equipment … the list goes on and on, and it all leads up to the final health department inspection.

A good restaurant general contractor will know what inspections are required when, plan for them in the overall construction timeline, manage the logistics of the inspections themselves, and be ready to quickly address any issues that arise. But what makes a good restaurant constructor great is the experience to anticipate items that could be a problem and take care of them before the inspector even arrives. And when there are questions at inspection, the best contractors will have the flexibility and creativity to resolve any concerns and make up any lost time in the construction schedule.

Projects Within A Restaurant Construction Project

The very different back-of-house and front-of-house aspects of a restaurant means there is usually a project within a project for any restaurant build-out. The back of house is dominated by the commercial kitchen, with all its complexities in the way of cook line layout, various stations and mechanicals, as well as a set of durable finishes for flooring and walls that is completely different than what’s typically used in the dining room and bar.

Meanwhile, the front of house usually includes construction of a bar area – complete with its own intricacies and requirements for beverage lines, power and water – as well as a décor-heavy build-out of the dining room. This can entail coordinating millwork, furnishings, and typically a theme package that could call for anything from installation of high-end artwork to building out shelves and hooks for walls full of sports memorabilia, as was the case with the Harry Caray’s 7th Inning Stretch at Water Tower Place Englewood built out on Chicago’s famed Magnificent Mile.

Those two different zones of a restaurant construction project require dealing with two different sets of subcontractors and vendors – which adds an entirely new level of complexity to the job. A great restaurant contractor will not only be able to handle the extra coordination this requires, but also take advantage of efficiencies and avoid any conflicts – scheduling or otherwise – between the two areas of the restaurant where work is taking place.

Like any commercial construction job, a restaurant or food service project comes with its own unique circumstances. But by partnering with a commercial general contractor well-versed in the sector and the specific considerations that can go along with it, restaurant clients will be in great hands knowing their construction partner is ready for any challenge the project might serve up.

-Chuck Taylor

Other Englewood articles related to Restaurant Construction

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For the most part, a commercial construction firm’s job is pretty straightforward. But because we have such a broad range of expertise and the know-how to weigh in or provide services for so many aspects of the construction process, there are times our clients don’t even realize they could and should be calling us for assistance. Here are three examples of when you should reach out to your commercial construction general contractor.

Before You Select A Site

Often a commercial general contractor isn’t tapped for a project until the specific site is already locked in. But by not calling in their construction partner earlier in the process, clients miss out on the opportunity to get valuable input from their GC on the pros and cons of different locations. Whether the client is looking at a vacant site for new-construction or a second- or third-generation space that will be repurposed, a GC is a great resource to bring along on site visits to examine existing conditions at locations under consideration.

In the case of an existing property, this exercise could include anything from identifying infrastructure that can be reused for cost savings, to spotting potential structural concerns or issues that might involve costly remediation – both of which could have big impact on a construction budget and schedule. For ground-up projects, a GC can visit the site to look beyond what is shown on the plat of survey – including surroundings that will need to be considered in construction logistics. For example, if the property has a zero-lot-line, or if it is part of a commercial strip next to a residential area, that will impact everything from deliveries to scheduling – all of which will factor into planning and overall cost.

A national commercial construction general contractor can provide clients rough market-specific cost estimates for building the same concept in different cities, as Englewood does for retailer Hobby Lobby.

If You Need Rough Budgeting Across Multiple Cities

A few years back, we had an initial meeting with a potential retail client that wanted rough budgeting for a new store concept they planned to roll out in multiple cities, including Chicago. Our first question to them was “which cities do you want pricing for?” They were surprised because they assumed we could only give them a budget for Chicago, our local market. We explained to the client that as a national contractor that manages projects across the country, we have a wealth of historical pricing data we can use to create market-specific order of magnitude budgets – top-level rough estimates of costs that are typically used to determine a project’s feasibility in the early planning stages. 

For this client, we were actually able to look at our data for their target cities and come up with a multiplier to help them estimate their approximate cost per square foot by location. This type of exercise – and the historical data a national contractor has access too – doesn’t get into nitty gritty details like exact pricing for a specific tile, but it is extremely helpful for any construction client that will be replicating the same concept in multiple markets and wants a rough idea of costs early-on. 

When Facility Maintenance Is Required

Many clients assume their relationship with their commercial constructor will end at the completion of the project. But we have found that a natural way to extend that relationship is through our Facilities Management group, which provides preventative, planned and emergency maintenance services. 

It’s not typical for a commercial contractor to also be a facility maintenance provider, so our clients don’t always think to call us for these needs. But the reality is it makes all the sense in the world for the company that originally built a space to be the one that maintains it. Not only do we have inside knowledge of the building or space in question and access to its most recent plans, but we also know all the subcontractors and manufacturers used for different building systems that require upkeep. 

Likewise, for those issues that seem like a maintenance concern at first glance but may actually be pointing to a larger problem, we bring a contractor’s problem-solving know-how and construction expertise to the situation. And finally, many of our construction-clients-turned-maintenance-clients simply appreciate the ease of having a single trusted company to call for any facility needs, whether it’s standard HVAC maintenance, an emergency repair stemming from severe weather, or a renovation of the space. 

The bottom line is a commercial construction firm can be a valuable resource and a wealth of knowledge before, during and after a project’s construction. So, if you’re ever wondering if your GC might be able to help or provide advice with any construction-related question or problem, just pick up the phone – it never hurts to ask. 

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Budget is always a major consideration for our commercial construction clients, and as a general contractor we devote significant time to the budgeting process. While we do our best to provide budget estimates that are as accurate as possible, there are inevitably times when projects bids come in higher than the client expected, or that unanticipated costs push the job over-budget. Here are a few signs that, in our experience, indicate your project budget is more likely to bust:

Skimping on Professional Services

In a best-case scenario, a general contractor budgets a job based on thorough architectural and engineered drawings that encompass not only the client’s design intent, but also careful planning for everything from mechanical systems to cosmetic finishes. We also always recommend our clients invest in a proper existing conditions survey, which will alert us to any site issues we’ll need to mitigate and plan for in the budget.

But in reality, the quality of plans we receive to work with at this stage varies widely. Clients may have not given their architect or engineer enough time to create a detailed set of documents; skimped on drawings assuming details will be decided along the way; or decided to skip an existing conditions survey altogether to save the cost. As an experienced general contractor, we do our best to ask questions and fill in gaps as we review plans and do a site walkthrough, but we may not anticipate every detail of the client’s exact design intent or plan for every site issue that can arise – both of which can lead to costly changes or additions down the road.

The best advice I can give our clients is to hire the best architect and engineer they can early in the planning stages, and give them time to do their job well. It’s well-worth the investment when it boils down to giving us the information we need to create an accurate budget.

Bringing the general contractor on board early, as American Girl did with Englewood for the retailer’s new flagship store in New York City, is key in creating an accurate construction budget

Getting Too Specific on Specifications

Mechanical equipment is a big line item for any construction project, but it’s always a budget watch-out when a client’s drawings include manufacturer-based specifications rather than performance-based requirements. There are certainly situations when it makes sense for the client to go with a particular brand, such as when they have a national account covering all their facilities across the country. But for the most part, giving the general contractor the flexibility of bidding the job against performance requirements allows us to negotiate with different manufacturers and find the absolute best costs.  

While this is most evident with big-ticket mechanical items such as vertical transportation, HVAC, fire alarm and life-safety systems and even plumbing and electrical, it really holds true for any product or material used on a project. General contractors are a great resource for suggesting substitutions that could add up to big savings and keep a project budget in check – from recommending an alternate, less-expensive finish material to create the same aesthetic as what is specified in the plans, to value-engineering nearly any project component. The key is to loop the general contractor in early and allow sufficient time in the initial planning stages to identify and realize these potential savings. 

Competitively Bidding the Project

To be clear, we manage plenty of competitively bid projects that we keep well-within the client’s budget expectations. But in general, competitively bid jobs are much more likely to end up over-budget than design-build or design-assist projects. That’s because in a competitive bid the commercial contractor is only responsible for bidding exactly what is in the plans, not the overall design intent. If the client ends up wanting something other than what is in the drawings, it results in a change order. There’s a misperception in this industry that general contractors love change orders. In reality, they almost always cost us time and money – just as they do the client – because they usually involve making something happen in a hurry, whether it’s expediting delivery of materials or paying a subcontractor overtime so we can make the change and still keep the overall project schedule on track. 

By contrast, in a design-build or design-assist project the general contractor is chosen at the project’s onset and creates a conceptual budget as architectural plans are developed. While changes and additional expenses do occur, there are fewer surprise costs because the contractor has been providing estimated pricing based on true, real-time market figures throughout the entire process. 

Estimating costs for a commercial construction project is a complicated process, but if clients work with a trusted commercial construction partner and provide as much communication and detail as possible, there’s no reason the budget can’t stay on track

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It’s already been a busy year for Englewood’s Restaurant Construction division, with a wide variety of projects ranging from ground-up new construction and interior renovations to commercial kitchen work. As such, here are four commercial construction trends our team has observed and anticipates we’ll see shaping more restaurant and food service construction projects in the near future:

Tapping Into The Craft Beer Boom
There is seemingly no end in sight to the current craft beer craze, and national restaurant groups are tapping into this trend by not only introducing more brewery-based concepts, but also by expanding the beer offerings at existing restaurants. As a result, we’re seeing a change in the footprint of restaurants and how our clients are allocating space – particularly with new-construction projects where clients are dedicating more square footage to back-of-house beverage cold storage. For example, a BJ’s Brewhouse we recently completed in Livonia, Mich., has an entire cold-storage room just for kegs and beer cases alone.

We’re also working with restaurant clients to make sure their mechanical infrastructure is set up to accommodate an extensive draft beer menu. As I recently discussed with Restaurant Development + Design for an article on bar design, beverage line technology has come a long way, and multi-beverage lines are smaller and more efficient than in the past. That said, beverage chases – the piping that routes beverage lines and CO2 from the source to the tappers – are typically installed underground. That means clients are smart to plan ahead and have us put in larger or even spare chases if they anticipate expanding their beer menu in the future. In a retrofit scenario for a restaurant or bar setup where the existing underground chases are maxed out, the easiest way to boost capacity is installing additional chases and beverage lines overhead. Because the line will be visible running from the ceiling to the bar, we typically also work with clients on a design element to camouflage the mechanicals.

Catering to Catering Business
Another big back-of-house shift we are seeing is among national restaurant brands offering catering as a supplement to their main business. Many of these clients want us to help them create a “second” kitchen dedicated to that function. Not only is it less disruptive to the restaurant’s day-to-day dining service to have catering food prep, cooking and packaging in a separate area, but it also allows the catering space to be set up specifically for working in bulk.

In some cases, existing restaurants have experienced an uptick in their catering business and worked with us to carve out a separate catering kitchen within their existing footprint. We’re able to do this by finding efficiencies in their day-to-day cook line and incorporating new equipment that is less bulky than what is already in place. Meanwhile, in new-construction restaurant projects, clients are adding back-of-house square footage to the design in order to include a separate catering kitchen – sometimes taking up as much as a third of the space of a traditional restaurant kitchen.

Test kitchens with a classroom-style setup, such as this one Englewood built for client US Foods, give companies a facility to experiment with trends as well as train team members and clients on products.

Taking The Kitchen Out Of The Restaurant
Some of the most interesting commercial kitchen construction projects we’ve been working on actually have nothing to do with a restaurant. One of our national food service clients – US Foods, a food product manufacturer and distributor – has tapped us to build out test kitchens at facilities across the country. These stand-alone kitchens, often built in a classroom-style setting, are a place for employees to test new ideas, experiment with culinary trends, and train team members and clients on the company’s products. Typically, the test kitchens have a condensed version of the standard cook line, with a ventilation hood over open flames, a fryer, skillet and griddle, so users can experience food products and preparation in an environment close to that of a commercial restaurant kitchen. What’s great about these spaces is that they are designed to promote the interaction and creativity that’s such an important part of food service.

WeWork Meets WeCook
On the note of creativity, we’ve been in talks with a relatively new business concept that offers commercial kitchen suites geared for small food service companies. I like to think of this company as the co-working space provider of the food service world – each of its locations houses 50 or more individual kitchens that are leased to tenants, who also have access to a number of shared amenities and spaces that address the specific needs of a food-service startup. Whether the spaces are used for preparing pre-packaged meals, creating individual products or even conducting food prep for a catering business, it’s interesting to see the co-working trend and its entrepreneurial spirit interpreted in this type of commercial real estate facility.

As we noted in our May blog post about ICSC RECon 2018, the restaurant sector continues to be hot for developers and brands alike. With new trends and concepts such as these emerging and driving additional facility and commercial construction needs, we share their optimism and look forward to sharing our food service and restaurant expertise with clients for their next project.

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