Increases in construction materials, interest and insurance rates have slowed construction activity in 2023. That has affected construction activity in 2024. Regardless whether the costs fluctuate a bit higher or lower they will not go down to pre-Covid levels. This has encouraged some builders to look for alternative building methods.
One apartment builder’s solution was to develop prototypes that can help lower overall costs for them. The prototype is a custom-designed building plan that is used for every project. This allows for larger discounts due to buying the same materials in greater quantities. It also allows them to stock up on items that have long waits for delivery. Since they use the same materials in all projects they know what they will need and can keep a supply on hand.
Another way to save on material and labor costs, reduce waste and increase speed to completion is to use modular construction. Although this is only a small portion of construction activity, it is growing. Some franchisees have selected to put up new stores using this type of construction. Since the construction occurs in a manufacturing facility instead of onsite and outdoors, the work can continue regardless of weather. In addition, the site prep work can occur at the same time as the building construction. These both help to complete the project more quickly. The same staff in the manufacturing facility can work with the same materials for multiple structures, providing consistency for franchises, which have embraced prefabricated construction. Where skilled labor is in short supply this provides one way to continue building with a smaller crew.
These are only two of the alternatives that help commercial construction builders and their clients.
e2Value® offers an easy-to-use estimator that can accurately calculate replacement costs and actual cash value for virtually any commercial structure from smaller retail shops to larger, more complex facilities such as hospitals, warehouses, schools and manufacturing centers. As the leading provider of web-based property valuation solutions, e2Value can assist you with all of your Insurance-to-Value (ITV) and collateral value monitoring needs. Contact us for more information.