In The Fight For CRE Resiliency, Contractors Lead The Way

As earthquakes rattle major cities and record-setting wildfires paint the skies an apocalyptic orange, the real estate industry’s focus is once again being pulled toward whether buildings are prepared for natural disasters and the escalating effects of climate change.

Disaster-prone regions like the Bay Area have strict codes requiring upgrades like fire-resistant materials and structural designs that will stay sturdy in case of earthquakes. Cities like Portland and Seattle have similar seismic measures, while cities in Hawaii and the Southeast have protocols for preparing for hurricanes. But many of the most cutting-edge resiliency measures are unlikely to be added to the building code soon, if ever.

In the world of building resiliency, the largest leaps are often made by a combination of two forces: building owners who believe in creating a long-lasting, environmentally friendly structure and contractors who can make their goals a financial and material reality.

“As a general contractor, we can’t wait for building and fire codes to catch up,” said Patrick Otellini, a project manager in the Bay Area offices of Swinerton, a national contractor. “We have to evolve the way the industry thinks and builds. Our clients are only going to hire us if we have that drive and if we can help them realize the financial benefits of these resiliency measures.”

Some building resiliency measures that are not mandated by local building codes are still popular among owners. Lining building roofs with solar panels is now a common resiliency measure that can reduce energy consumption and ensure that a building will have a source of power in case of an outage caused by a natural disaster. Stronger, more efficient ventilation systems can lower utility costs and filter pathogens and chemicals out of the air, which can be crucial if air quality is impacted by fires or other weather.

Beyond these simple changes, owners and developers may be hesitant to make any more resiliency upgrades for fear of cutting into the yields on their projects. The push for resiliency can be especially complex in renovation projects. For older non-ductile concrete buildings or steel movement-frame buildings, Otellini said, the cost of performing a seismic retrofit can exceed the cost to tear the building down and build a replacement structure that complies with current state and local codes.

“Resiliency upgrades are often the first thing to get value-engineered out,” said Otellini, who formerly served as the director of earthquake safety and chief resilience officer for the city and county of San Francisco. “These can be very difficult conversations if resiliency is not something the owner values. When we advocate for these types of changes, we make sure that the clients see the benefits going forward and how they impact their bottom line.”

Developers of affordable housing projects are often very open to resiliency upgrades, Otellini said, because they typically plan on long-term holds for their buildings rather than immediate sales. That means they often invest in energy efficiency upgrades and resiliency measures that will preserve affordable housing for many years without the need for renovations.

But in all of the projects Swinerton works on, the company presents clients with many options for how to make their assets more resilient and seeks out financially feasible ways to implement resiliency changes. 

When it comes to finding the intersection of resiliency and value, it helps to have a contractor that is committed to resiliency in its own operations, said Rachael Guerrero, the corporate social responsibility manager at Swinerton. She described how Swinerton is one of the few contractors in the U.S. that has signed on to the United Nations Global Compact, a voluntary program that encourages businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation.

“From coast to coast, we’re seeing the real effects of climate change affect our company operations every day,” Guerrero said. “We have a responsibility to ensure the safety and resiliency of our employees, our clients, and the communities we work in.”

Some of Swinerton's projects are seemingly all about resiliency. In collaboration with Power Engineering Construction, Swinerton has been constructing a floating fire station at the southern end of San Francisco's Embarcadero. The float, which will be held in place by four guide piles, has been engineered to withstand the long-term effects of sea level rise and be relatively impervious to earthquakes.

Guerrero described how Swinerton has been making concerted investments in building techniques that it believes represent the future of sustainable construction, including mass timber prefabrication, which can reduce the emissions related to sourcing traditional materials like concrete and steel and lower a project’s environmental impact by shortening construction timelines.

The company’s mass timber practice has been booming throughout the Pacific Northwest and beyond, and Swinerton has begun offering its mass timber services as a subcontractor to other companies that are interested in learning more about mass timber.

The company’s experience in renewable energy projects also inspires its focus on sustainability. Swinerton Renewable Energy is the largest solar contractor in the U.S., and Guerrero said that experience helps inform energy practices across the company’s portfolio. 

But resiliency is about more than just preparing for the effects of climate change. It is also about adapting to new challenges, including the coronavirus. Otellini described how in the early days of the pandemic, San Francisco and other Bay Area cities looked to Swinerton to provide input on how new safety protocols should be implemented to keep workers safe.

“The mayor’s office would be on the phone with us for daily updates,” Otellini said. “They wanted to know how we could keep building safely, to make sure that the pipeline on affordable housing and other important projects would keep moving.”

Even with the pandemic happening in the background, projects chugged along. Despite the construction shutdown, a 157-unit affordable housing development in the Mission from Swinerton earned its temporary certificate of occupancy six weeks early, as did 1066 Market, a 14-floor multifamily building on San Francisco’s biggest thoroughfare.

“It’s the sign of a company that’s been around a long time,” Otellini said. “Because we were founded in 1888, there is an ethos at the company of dealing with the ups and downs that life and the economy present. We’ve survived many historical uncertainties from the Great Depression to two World Wars and we’ve always come out stronger as a company. This time of uncertainty is no different.”

Many of the biggest pushes for resiliency came from the corporate tenant side. The momentum for the LEED building standards, Otellini said, was a result of a new wave of companies that valued sustainability and wanted to locate their operations in LEED-rated buildings. But to drive new change in the world of resiliency, the industry may need legislative action.

“It’s not enough for a few good actors to make volunteer efforts,” Otellini said. “These interventions require strong political leadership based on consensus-based public policy from across the worlds of construction, real estate, sustainability and the communities these projects impact.”

This feature was produced in collaboration between the Bisnow Branded Content Studio and Swinerton. Bisnow news staff was not involved in the production of this content.