Executive Search for the Real Estate and Construction Industries

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Senior Real Estate Analyst:
Candidate is a Real Estate Analyst with over 25 years of experience in the real estate industry. Experience including commercial and residential projects. Responsibilities include market studies, financial analysis, fiscal impact studies, development feasibility studies, acquisitions, and permitting.

Property Manager:
Candidate is a Property Manager with 17 years of experience in the real estate industry. Candidate is currently supervising a staff of six across two buildings. Responsibilities include client contact, rent collection, building upkeep and servicing unites on behalf of low income tenants.

Real Estate Analyst:
Candidate is a Real Estate Analyst with 1 year of experience in the real estate industry and 7 years of overall experience in the design/build industry. Experience includes both domestic and international real estate projects. Responsibilities include project management and financial analysis.

Property Manager/National Supervisor:
Candidate is a Property Manager with 13 years of experience with a national real estate firm. Responsible for over 2,500 units. Responsibilities include recruiting and hiring all on site personnel; budget implementation; marketing; site audits and inspections; evaluation of property performance. Base salary of $100K.

Construction Project Manager:
Candidate is a Construction Project Manager with a total of 21 years of experience. Experience with residential and commercial projects. Experience includes estimating, construction management, project management, staff supervision, client contact.

Leasing Agent:
The candidate is a Leasing Agent with a total of 2 years of experience. Responsibilities include asset management, property management/leasing, asset analysis, client contact and coordination, marketing, & hiring and coordination of outside vendors (contractors, engineers, and architects).

For more information on one or more of these candidates, please contact John Rainone, Project Operations Manager, at JRainone@MorganSullivan.com.

Is design/build all it's cracked up to be?
By John Rainone, Project Operations Manager, MorganSullivan

Some of its supporters have touted design/build as the balm for most of what ails the Construction and Real Estate industries. Design/build has certainly been around long enough for its benefits to be clear- among the most compelling of these are accelerated project schedules, and arguably, better coordination among designers and contractors.

Design/build has caught on in a big way over the past few decades in the US. Since the mid-1980s, the percentage of non-residential projects delivered by design/build has increased steadily. According to the Design-Build Institute of America, five percent of such projects were design-build in 1985, and by 2005, the percentage had increased to 40%.

Design/build has its drawbacks, however, and it will be interesting to see how much more ground it will gain vs. the traditional design-bid-build delivery model. Has it already reached the apex of its market penetration? To be honest, I'm not sure. There may still be room for growth, but future growth may not be as robust as it has been.

Design/build adherents needed a few decades to spread the word, but today, most real estate development professionals seem to have a fairly good understanding of design/build's strengths and weaknesses.

Strengths include:

• Fast-track construction is facilitated
• Design/builder is single source of responsibility
• Opportunity for the owner to influence design and cost early
• Design team working together with builder can more easily foster creative solutions to problems
• Designer and builder are on same team, reducing adversarial relationships
• Allows for early and frequent input by contractor regarding budget
• Expertise of builder in selecting subcontractors can help improve performance and quality
  

Weaknesses include:

• Doesn't guarantee lowest cost based upon completed design
• Design/builder not agent as an agent of the owner
• Legal documents are frequently revised
• Process still not as well understood by owner, architects, and subcontractors as design-bid-build

When assessing whether a project will be best served with a design/build delivery, owners must consider many factors. The nature of the project has great influence. For instance, Harvard University rarely uses design/build due to the type of buildings required by a modern higher education institution.

"Our buildings tend to be highly technology oriented and specialized," says Jim Gray, associate vice president for Harvard's real estate services. "We want to see the design fully fleshed out." Science labs and other facilities use cutting-edge technology, and the design must be tailored to serve particular needs.

Gray does see the advantage of bringing the GC into the process early, and Harvard does sometimes bring in the GC earlier than is usual under design-bid-build. This strategy can allow the GC to give the design an early reality check.

Another owner with specialized needs, Fresenius Medical Care, a provider of dialysis services, uses a type of design/build hybrid model. The company, with scores of leased locations across the country, works with a group of preferred developers that are familiar with its needs. The developers work on early stages of projects, including finding suitable sites and facilitating the permitting process, with knowledge of Fresenius's specific needs. Developers also guide the design process, working with design partners that typically have worked on Fresenius projects in the past.

"The schematic design needs to be approved by us," says Jay Poswolsky, director of project management for Fresenius. The company must carefully evaluate safety and regulatory factors impacted by the design. "For instance, we would not want to have supply deliveries passing across where patients enter and exit the building," Poswolsky says.

Once the schematic design is approved, the developer can proceed with a design/build model. The developer need not have a complete design before beginning construction. Speed is a factor in these projects; the sooner Fresenius can open, the sooner it can serve patients and begin making money in the new location.

"Our preferred developers are highly incentivized to accelerate the project because they don't get paid until the project gets built," Poswolsky points out. So, Fresenius benefits from one of design/build's key strengths.

Design/build certainly has its place, and as the Fresenius example shows, variations on the classic design/build model can overcome some of its drawbacks. On the other hand, the Harvard example illustrates design/build's limitations, and why some may never see it as suitable for their projects.

Has the built environment already reached the design/build saturation point? What do you think? Let us know...

John Rainone is Project Operations Manager for MorganSullivan, an executive search firm serving the real estate and construction industries.