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In multifamily development, the most expensive thing a developer can do is wait.
Without continuous cost and design alignment from Day 1, a development pipeline can easily become siloed, resulting in plans that are fully drafted before they are budget-tested. In today's volatile market, waiting until the final stages to price a project can be a costly liability that compromises architectural vision, stalls timelines and harms the resident experience.
True value engineering can’t be a late-stage fix. It must be an active design driver. With more than 20 years of building experience across the Southeast, general contractor FaverGray advocates for a proactive partnership that bakes financial reality into the planning phases.
“Our ability to establish an accurate early budget comes from the volume of multifamily and student housing projects we are actively pricing and building,” FaverGray President Ben Hinson said.
The FaverGray team walked Bisnow through its playbook for developing a more proactive, constructability-driven design and how it helps developers build with more financial certainty.
Planning A Realistic Budget
FaverGray understands that knowing the scope of a project before active building begins is critical, Hinson said.
The company leverages deep market insights to develop conceptual budgets well before a complete set of drawings is available, looking beyond a simple cost-per-square-foot benchmark.
“Building type, unit mix, structural systems, exterior materials, site conditions, parking, amenities, and mechanical, electrical and plumbing systems can all have a significant impact on the budget,” Hinson said. “Understanding those components early helps identify where the greatest cost exposure may be and where the design team should focus its attention.”
Early involvement with the owners and design team allows them to flag budget concerns during schematic design, long before those decisions are fully incorporated into the drawings. It is much easier to evaluate an alternative at 30% design than to discover the same issue at 90% and have to redesign, Hinson said.
The High Cost Of Minor Design Details
Decisions that seem minor on paper can have a major impact when replicated across hundreds of units. Framing layouts, structural grids, window sizes, exterior material transitions, plumbing locations, unit stacking and MEP routing are all prime examples, said Mark Higby, FaverGray division leader.
The company’s preconstruction and operations teams review the drawings with constructability in mind, identifying opportunities to simplify details, create repetition and resolve potential conflicts early.
“Our role is not to change the architect’s vision, but to help determine the most practical and cost-effective way to build it,” Higby said. “When the contractor, architect and owner are working together early in the process, there is more opportunity to solve those issues without compromising the design.”
FaverGray Division Leader Walker Palmer said not all dollars are equal in the residential experience, so value analysis can’t take a one-size-fits-all approach.
“When evaluating an alternative, we look at the cost, constructability, schedule, availability and long-term performance, but we also consider whether residents will see or experience the difference,” he said. “If we can simplify something behind the walls or change a construction detail without affecting the finished product, that may be a better place to find savings than removing a feature that contributes to the overall experience of the property.”
By giving the owners transparent options and explaining the cost and scheduling implications of each, FaverGray ensures developers have a clear road map of where to save and where to invest, Higby added.
Why Siloed Design Stalls Project Timelines
Once a project is well into the design phase, the architecture, structure and MEP systems are fully integrated. Even one change can create a domino effect, requiring additional design work and stalling the project schedule, FaverGray Division Leader John Kitchens said.
“This is why we prefer to address value throughout the design process rather than waiting until a project is over budget,” he said.
Bringing key subcontractors into the fold early gives teams access to current pricing and constructability feedback while there is still time to pivot. The same approach applies to procurement, Kitchens said.
Early-release packages and material buyouts can also help reduce exposure to escalation and give the owner greater cost and schedule certainty.
Staying Ahead Of Supply Chain Bottlenecks
While long-lead items vary by project, electrical equipment, switchgear, transformers, elevators and certain mechanical equipment are some of the items FaverGray monitors closely during preconstruction, Palmer said.
On recent projects, FaverGray teams have worked directly with subcontractors and suppliers to identify procurement concerns months in advance.
“If a specified manufacturer or product has a lead time that could affect the schedule, we can bring that information to the owner and design team and evaluate an approved alternative before it becomes a problem in the field,” Higby said. “The important part is identifying the issue early enough to have options. Once construction is underway and an item is already affecting the critical path, those options become severely limited.”
What Residents Actually Pay For
Ultimately, developers should focus capital on areas residents see, use and physically interact with every day, Palmer said.
“The things a resident touches matter,” he said. “Kitchens and bathrooms, countertops, cabinets, plumbing fixtures, hardware, flooring and finishes, along with amenity spaces, clubhouses, pools, outdoor areas and building entries, all contribute to how a resident perceives the quality of the property.”
At the same time, thoughtful repetition in unit layouts, efficient framing and back-of-house conditions can generate meaningful savings without changing the look or feel of the final product, Kitchens added.
By shifting the mindset from late-stage budget-cutting to early asset optimization, developers can stop treating value engineering like emergency surgery and start using it as a competitive advantage.
“FaverGray looks for efficiencies behind the walls, but we also thoughtfully value-engineer visible spaces to preserve the final design’s look and feel,” Kitchens said. “Early contractor involvement helps developers identify where added complexity is driving cost without adding to the resident experience, ensuring that every dollar spent yields the greatest possible impact for years to come.”
This article was produced in collaboration between Studio B and FaverGray. Bisnow news staff was not involved in the production of this content.
Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.
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