Andy Ball's Crystal Ball On Housing
S.F. real estate is experiencing its fourth gold rush (this one has fewer men with long beards and dirty fingernails), and that's why we're thrilled to bring together some of the city's multifamily titans for our annual San Francisco Residential Real Estate Summit at the Hotel Nikko this Thursday.
We sat down with Suffolk Construction West Coast region prez Andy Ball, who'll be speaking at our event. The former CEO of Webcor (responsible for the Cal Academy of Sciences, St. Regis, and Infinity Towers) tells us that in the 18 months Suffolk has been in biz in S.F., the office has gone from zero to $641M in projects under construction, representing more than 2.6M SF and 1,679 units. He did that much at Webcor in 15 years (OK, that also included some tiny jobs like the S.F. MoMa, Transbay, Cathedral). The beauty of Suffolk is it's been in biz for 30 years, so he can tap great people who have done similar projects around the world. He's also got access to a key group of former employees; once he left Webcor, there was a "Webcor diaspora"—of people who went to a variety of different companies. Now they're coming back to Suffolk as it gains different projects.
As his "fourth startup," Andy was attracted to Suffolk's "build smart" concept that connects him to the client as much as possible. When you get promoted to the point where you're no longer touching the job—sort of like how the best person in sales is no longer selling because they are managing—that's bad. Instead of getting bogged down with HR, accounting, insurance, and other managerial duties ancillary to what Suffolk does (building buildings, working with clients on pre-construction, creating value), he can now spend time doing what he does best.
Andy thinks virtual design and construction is the only process to lead the industry out of the dark ages, which has stayed the same for the last 100 years. Using virtual time and money to solve real problems by building sophisticated codes takes care of those 1,000 RFIs up front, he says. It's about defining what the level of detail is on plans and specifications, making sure labels for things like "concrete slab" are consistent via tag IDs, and letting the model populate with info. OnTrack is the program's project hub that that ties together the subcontractors, owner, architect, engineers, and civil engineers so everyone has the same information and there's accountability. A historical record is kept, which means you can tell when someone opened a doc—and when.
340 Fremont, which recently broke ground (above), relies on some great Andy connections. (Equity's head of construction is Webcor alum Tom Mead and Handel Architects also did Webcor's Millennium Tower.) There was a scuffle with the owner of the adjacent property at 390 Fremont about running tiebacks under the property. Andy told the owner he'd rent out an office for Suffolk at 390. Going the tieback route saved the project over $1M and added 45 more parking spaces. If you want to stand apart you need to come up with value that's going to justify that, he says.
The Empire State Building is a prime example of lean planning principles, he says. The skyscraper could've taken 15 years to complete but ended up speeding from entitlements to move-in in just 19 months. That's because there were no barriers (some like safety are necessary today), but was mostly successful because of its big room concept in which all decision-makers sat in one room (architect, owner, engineers, subcontractors). Today that concept can be recreated in an online room, which is the essence of Suffolk's OnTrack system. The office Andy's renting at 390 actually has a big room in it, which will unite all parties under one roof.
Such efficiencies via the build-smart method will eventually be huge, allowing the industry to reduce additional changes to the schedule and associated time and costs by potentially 70%. Above, 340's groundbreaking in April. The build smart process knows how to get bugs out before they occur (sort of like how the software industry writes programs today). The way the industry gets bugs out today is to build and then fight about who drew plans wrong, he notes.