Technology Helping Developers Take On More Work Amid Sustained Building Boom
A push for more productivity and crushing construction costs have developers pursuing technology solutions at every point along the way to project delivery.
“The big push is to have one single-source solution for your real estate that’s web-based so your whole portfolio can be managed,” said Cannistraro President John Cannistraro, a speaker at Bisnow’s Boston CRE Tech Summit May 9. “There’s tech out there that does a little piece here and there, but once it’s all tied in, then we’ll see the synergy of it.”
From virtual reality headsets showing pre-construction glimpses of a property to web-based fire and security system controls, commercial real estate is beginning to take on tech in a big way. Expect an even stronger marriage between real estate and tech in coming years, as it will enable more productivity and allow for even bigger portfolio management, something Cannistraro is already witnessing.
“Thirty years ago, your firm used to be busy if you had three projects going on at once,” he said. “Now, it’s closer to 30.”
One area where Cannistraro already sees the synergy is through 3D laser scanning of an existing building that captures nearly 1 million data points about the surroundings per second. With that data set, a construction firm can make a model, do a design, calculate pricing and then do fabrication, build and eventually operate the property.
While new technology's upfront costs have been a big part of what has kept CRE companies away for so long, the industry is beginning to see firsthand the efficiencies tech can unlock.
“I often wonder if it really saves us money or, if instead of doing one project at a time, we can now do 20,” Cannistraro said.
CRE was slow to utilize technology, and the industry often questioned if it would bring much benefit. But developers and construction teams have realized technology not only improves safety and productivity, it can also bring down costs in expensive places to build like Boston.
Boston routinely ranks as one of the most expensive places to build in the U.S., with construction premiums running about 12% above the national average. Washington, D.C.-based Edens completed similar cinema projects in Boston and Northern Virginia in 2012, with the Boston one costing $400/SF to build compared to $225/SF in Virginia.
Boston-based Suffolk is focused on improving technology’s role in the construction process by connecting it to both the people and the various processes on a job site. The firm launched Smart Labs at several of its North American offices in 2017 and equips them with interactive technology like data walls and job site feeds.
“As more technology comes online, there’s more information to produce better estimates and better turnaround,” Suffolk Executive Vice President and Chief Information Officer Chris Mayer said. “The digital information captured from a job site is giving us a better sense of what the environment is like and how far along the project is.”
Mayer points to automated building systems and fabrication as two areas where tech is helping bring down construction costs, but innovation is also helping improve project management.
Suffolk has utilized a camera network and integrated image capture on job sites that allows the firm and its clients to have walk-throughs of an entire project without actually visiting the site. The system also recognizes and sends an alert when a construction worker isn’t wearing proper safety gear.
“Technology has integrated into our workflow so it isn’t just a piece of information, but it’s delivering value through the entire life cycle of construction,” Mayer said. “That digitization effort to streamline processes captures information now through the whole process and not just a few steps.”
With more construction and development teams adopting management platforms and data feeds like Suffolk’s, there are ways to cut down on costs in other aspects of a development. Image and video capturing keeps ownership groups engaged remotely and can cut down on travel budgets. The tech advancements also make it easier for a team to stick to schedule and budget.
While he recognizes technology has improved development productivity, Cannistraro cautions there is still a need for skilled labor to stay on top of construction and development’s latest tech tools.
“What the technology doesn’t do by itself is provide the skilled management and labor resources working together to ensure the project’s success,” he said. “Tech is just a tool to do it faster; it just does the math. You still have to set the problem up right with the people.”
Hear Cannistraro, Mayer and others May 9 at Bisnow's Boston CRE Tech Summit at 25 FID Kennedy Ave. in the Seaport.