Talking Roads

FOUR TRAJECTORIES TO FUTURE VALUE: OPTIMIZING HEALTHCARE REAL ESTATE

Cascading changes in the healthcare industry and the current economic landscape are necessitating new real estate strategies for health systems as they manage cash and affect sustaining change. Though median hospital margins improved through 2023 and early 2024, according to Kaufman Hall, half of the hospitals and health systems are still operating at a loss despite the deceleration in wage growth and inflation. Interest rates have altered financing costs, and raising capital is more difficult today than just a few years ago. Further, health systems must contend with new entrants who are well-capitalized, nimble, and disruptive.

Owners investing in and operating their real estate portfolios as they did a few years ago are unlikely to realize expected value returns. Those who embrace these challenges and look to rebalance risk and return of capital assets will position themselves for success.

Healthcare systems should consider four potential trajectories for their real estate, identifying the best fit and re-evaluating, adjusting, and creating new portfolio strategies.

TRAJECTORY 1:
The Rationalized Portfolio

Systems re-examining inpatient and outpatient capital assets should consider restructuring leases, bundling leases, and divesting non-core assets. According to a 2024 Huron survey of 300 healthcare executives, leaders ranked redefining their portfolios and cost reduction/optimization as the top two strategies to confront market dynamics. Real estate costs comprise a significant portion of a health system’s budget, so rationalizing real estate portfolios and optimizing space can be a shorter-term solution to free up capital to be redeployed for patient care and other priorities. While health systems have always had to rationalize their square footage needs, there is now heightened emphasis on finding efficiencies and savings.

In this trajectory, real estate assets become highly streamlined. Assets are right-sized for changing strategic and operational objectives of the health system and continuously monitored for their performance and returns to the system. Tactics can entail exiting underperforming spaces before the end of the contract term, divesting owned and leased spaces, modifying existing lease agreements, or initiating sale-and-leaseback transactions to improve liquidity while reducing unneeded space. Each of these tactics has nuanced accounting requirements and outcomes that should be carefully analyzed before action is taken.

Ultimately, many healthcare organizations can reduce their real estate footprint by comparing the value of a department or service against its operating cost, the location of its providers and specialties, patient volume, size of staff, and care gaps. Increasingly, this will entail aligning the real estate approach with the health system’s strategy—focusing instead on value, not cost per square foot. Doing so will allow the organization to be more strategic about its real estate assets, make changes that improve operations, and enable the health system’s mission and business objectives.

TRAJECTORY 2:
The Redistributed Portfolio

Healthcare delivery is no longer just sequential but horizontal, vertical and longitudinal. Traditionally, care processes have been organized around episodic events, causing wasted time and unnecessary steps for providers and patients. Shifting to an expansive view of care, not only through the disease lifecycle but throughout a patient’s life, requires vertical integration (within the health industry) and horizontal integration (across health and other industries) of a broader set of venues and partners over a longer time frame.

In this trajectory, health systems begin to source partners and incorporate community nodes of care into their real estate portfolios, potentially moving to models of care hosted in environments that others may manage. Community nodes of care can exist in retailers, workplaces, schools, care centers, grocers, gyms, and even social and community events, provided that the branded environment and service experience can be physically extended to the node. In addition, recognizing the shortage of providers and the imperative to reduce operating costs, these nodes can be viewed as a cost-reducing shift in sites of care, rather than net new sites of care.

As providers continue to explore ways of meeting community needs, partnering with external players who excel in logistics and order fulfillment—such as pharmacies, durable medical equipment (DME) shops, and other amenities—can amplify convenience and care support. For example, hospital-based pharmacies can become increasingly specialized while most scripts are shipped directly to the home. DME and supplies can be coordinated prior to discharge and shipped to homes hours later. “Ownership” of these additional nodes could be largely or entirely via third parties—the healthcare system’s role is to ensure that these nodes are extensions of their brand. Designing these partnerships should factor into facility and experience design, as they will require coordination but may ease overall space requirements across the system.

TRAJECTORY 3:
The Re-envisioned Portfolio

In a re-envisioning approach, real estate portfolios become highly integrated networks of physical and virtual resources that support total and continuous health. Continuing disruptions from technological advancements and rising consumer expectations necessitate an omnichannel, consumer-led approach. This trajectory requires a balance between in-person and remote access to care, changing from a single encounter to a series of rapid touchpoints across multiple nodes—the focus of the portfolio shifts from footprint and geography to network and connectivity.

For example, a provider may supplement a multi-channel technology platform that guides patients toward wellness and resources with an extensive physical network of community care nodes. Chronic disease management is primarily handled through wearable diagnostic technology distributed to and demonstrated in the home setting, and total health is monitored in a multi-factorial way.

The omnichannel approach is supported by buildings designed as multisensory ecosystems whereby healthcare is integrated, unifying the home, health system and digital environments into a single experience. Acute care hospitals and ambulatory facilities may either go fully remote or only host spaces for specialized care, diagnostics and outpatient interventions that do not require additional services. A net reduction of physical plants and facilities may be possible and part of a sustainable cost-containment strategy for providers. It will be critical for healthcare owners to ensure that a consistent experience is delivered across all modalities—including its online presence, mobile solutions and physical environment.

TRAJECTORY 4:
The Refocused Portfolio

Refocused real estate portfolios shift the paradigm of the hospital from the universal anchor of the health system to the final and highest-acuity specialty centers. Traditionally, we consider a portfolio of multiple ambulatory sites that ladder to an acute care hub and its satellite campuses. In a scenario where hospitals operate as specialist hubs, the portfolio may evolve to include an ecosystem of digital and community nodes, a reduced number of ambulatory centers, and access to a number of post-acute sites.

While important, geographic location becomes secondary to prioritizing care nodes that can provide dynamic, accessible, and convenient care anywhere and anytime. Ambulatory sites are selected based on access, disease prevalence, and consumer preferences. The hospital maintains a site presence, perhaps with a static or smaller footprint.

The defining feature of this trajectory is that basic primary and preventive care are no longer grounded in ambulatory centers—they have shifted out to the nodal network. For specialty care, tertiary and quaternary growth specialties also become largely nodal, selectively joining their primary and secondary counterparts. Thus, ambulatory care facilities evolved into referral centers for super-specialty care, major diagnostic modalities and outpatient interventional care. This trend results in two outcomes: Ambulatory sites are more centralized as they are no longer the highly distributed first line of interaction for the provider, and they are also more focused on high acuity care.

Author: Supina Mapon

Photo: PopTika/shutterstock.com

Factors behind the current construction workforce shortage are varied. As high school courses offering hands-on training and job-ready skills have decreased, job openings have increased in the construction industry. The result: a shortage of skilled workers needed to fill industrial trades.

As industry members look for ways to tackle the skilled labor shortage, DPR has taken matters into its own hands to ensure employees have the skills necessary to build for the future. Enter the DPR-run Craft Apprenticeship Program, which is certified by the National Center for Construction Education and Research (NCCER). This in-house program ensures that team members receive training from experienced DPR builders and graduate with skills that meet high quality and safety standards.

Craft Apprenticeship: Investing in the Future

Aimed primarily at newer craft team members who are less experienced, the Craft Apprenticeship Program lets participants learn journey-level skills through related technical instruction (RTI) coupled with on-the-job training (OJT). Beyond that, apprenticeship allows participants to gain confidence and a better understanding of what’s expected of them in their role.

“Elevating our craft is a big part of how we measure success,” said Will Sheane, a DPR people practices project manager who has been heavily involved in getting the program up and running. “It’s an investment in their future that is provided at zero cost to the employee while being paid their regular wage for training.”

The program begins with core training that covers essentials like construction math, blueprint reading and communication skills. After completing Core, apprentices begin their trade-specific learning path—concrete, drywall or electrical. These paths consist of modules that cover the skills necessary to become a well-rounded journeyman or journeywoman. And since knowledge is only as good as its application, apprentices are given breaks in between levels to apply what they’ve learned on the jobsite. This on-the-job training allows them to see exactly how the rubber meets the road.

Course Structure

Assistant Superintendent Ricardo Reyes Aguilar, who began his career at DPR as a foreman in 2017, was asked to serve as a drywall instructor in the program. He appreciates the length and structure of the program, which takes place over 40 hours, followed by 10-12 weeks of two-hour sessions, two days a week. “That way they can digest the information,” said Reyes. “In the classroom, we go over coursework, and we have an area where they can get their hands dirty, use their tools and practice some of what they’ve learned.”

“This program has given me motivation and better vision of what we do daily, with the hope of improving myself within an excellent team and great camaraderie at DPR,” shared an apprentice from Orlando, FL. Students complete their exams online to show they’ve learned the material, then move to hands-on tasks to show that they can apply what they’ve learned, so everyone gets hands-on experience before going back to the jobsite.

After completing the fundamentals, the students stream into their respective trade paths, which range from two-and-a-half to four years in length. The program is taught by instructors who are DPR foremen or superintendents, ensuring that the training is up to date and provided by subject matter experts through an experienced DPR lens.

Apprentices are required to pass rigorous tests to demonstrate that they have mastered the knowledge within each module. After passing the test and demonstrating their capability, each module completion is logged on an NCCER wallet card. This offers portable credentials that are recognized in all 50 states and three territories and are easily verified online. As further incentive, apprentices are offered regular wage increases for successful level completions, and upon graduating from the program, they receive a certificate and engraved steel card recognizing their official journey-level status.

“A lot of people are retiring from the trades. There are people coming in who need to learn, and the process takes time. It took me years to learn everything I know, but we’re trying to focus and help accelerate the process so we can get our people to be ready to build sooner—and to work safely,” noted Reyes.

Apprenticeship Program Graduates

DPR will be celebrating its first graduates of the apprenticeship program in 2024 in both the Central and Southeast Regions. In late March, DPR’s Southeast region will celebrate its first 2024 Apprenticeship Graduates in Orlando and Tampa. Twenty-one of Central Florida’s Drywall Apprentices will have completed close to 290 hours of in-classroom training and hands-on skill assessments, in addition to their on-the-job training. DPR’s Central region plans to celebrate its first 2024 Apprenticeship graduates in Austin in June 2024 with nineteen graduates.

The next group of apprentices began core classes in both the Central and Southeast Regions in Q1 of 2024. Program leaders asked participants in the program about the impact it had on their work. Responses showed they felt it helped them learn better ways to interact in the workplace and gave them more confidence in their work, as well as the ability to share their learning with others.

“What they’re learning is ultimately for them. DPR will benefit if they’re better builders, but the knowledge stays with them,” concluded Reyes.

As industries prepare for the future, investing in and empowering their labor force is a key priority not only for team members, but for overall industry success. DPR aims to get ahead of the curve by elevating its Craft workforce and giving them the tools they need to build great things.

Q: What is your role at DPR? Describe the path you took to get there?

Haidary: I’m a senior project engineer in our Charlotte-Greenville Business Unit. I studied civil and structural engineering as an undergrad in Kabul, then I came to Clemson University on a Fulbright Scholarship to do a Ph.D. in Construction Science and Management. I focused mainly on planning and design in the built environment. At the time, DPR was building the Clemson College of Business, which I wanted to work on, so I reached out to the team and got involved with a part-time internship there. I graduated from Clemson in 2021 and then joined DPR full-time.

Q: Tell me about the project you’re on now. What are some interesting aspects about it?

Haidary: My project in Charlotte was delayed, so I’ve been working on a project in Dallas since August. We’re retrofitting an existing structure, phase by phase, to transform it into a manufacturing facility that will produce silicon carbide wafers used in chips for electronics, like vehicles and phones. The pandemic adversely affected manufacturing in the US due to supply chain issues and chip shortages, but these kinds of projects are coming back to the US. Congress passed the CHIPS and Science Act in 2022. It authorizes funding to boost research and semiconductor manufacturing here to strengthen our supply chain resilience and to bring these facilities back to America, so now there’s a push toward building these facilities.

This project is a design-build project for an existing client. Their engineers know their processes, so they came to us and said, “Here’s the building we bought. Here’s our process. How can we make it happen?” After phase one is complete, the client will be able to use that portion of the facility while we work on the next phase, and so on. In phase one, there are around 150 pieces of equipment required to make the product, and there are multiple systems required to make that equipment work. There are a lot of chemicals and gases involved, a lot of specific systems involved. That is a part of the complexity. This project will give us really valuable experience to draw on in the future for building these kinds of facilities. There are a lot of things we have to figure out, but it’s fun and challenging. It’s a good learning experience and an industry that’s going to grow more and more in the years to come.

Q: Why do you think being a self-performing general contractor makes a difference on a project?

Haidary: The schedule on this project is very tight, and because of that, we’re relying heavily on self-perform. We’re doing all interiors—waterproofing, fire stopping, interiors, drywall, DFH, concrete. Our strategic partner, EIG, is involved in our electrical systems and another partner, GPLA, is involved in our structural design. We started designing in mid-August and we’re due to give the facility back to the client for phase 1A on January 31, so using the SPW team and the DPR family of companies helps with the schedule. First, we don’t have to go through the process of prequalification, getting pricing, vetting, and onboarding it takes to get a trade partner on board, which can take weeks. Second, since the project is design-build, we have more control over the work we do. We are designing portions of it, so some unidentified gaps will be identified through the design development process. We don’t know what those are yet, and if we were using a trade partner it would be more difficult to navigate those as they may not be involved until that process is complete. Since we’re using DPR teams, we can do what’s needed ourselves, control the methods, and figure out the paperwork side of it later.

Q: What is your proudest moment at DPR?

Haidary: That’s a tough question; there are a lot of them. I think the first projects where I did my internship, the Clemson College of Business and the Greenville County Administration Building project. We had largely the same team on both, and we did a really good job. We worked on Clemson during COVID, which affected everything, but we managed to avoid letting it affect our schedule. I was most proud of the team. Because of our efforts, both projects won ENR Best Project Awards in those years. It’s the team that makes it happen. I grew a lot with that team, so if I had to choose one, it would be that.

Q: To be successful in your role, what skills does a person need?

Haidary: We can talk all day about technical skills. You’re learning every day, so your technical skills are always increasing. But soft skills are crucial, like having an open mind in terms of all the challenges. That’s very important. I take that very seriously because you can’t build these projects with just one person. As long as everyone is open minded to different methods and ways of working, I think it can be successful. So, skills I take very seriously are open mindedness and having a “team” environment instead of a “me” environment.

EPISODE 9
Listen Now!

According to a recent American Hospital Association e-book, healthcare workers are five times more likely to experience violence in the workplace than those in other industries. Addressing this extends beyond the daily operations of healthcare facilities, and into to the construction and expansion phases, which can include architects shaping designs with security in mind and construction project managers implementing safety protocols.

In Episode 9 of Constructing with Care, DPR’s podcast focusing on healthcare construction, Deb Sheehan, healthcare market strategy leader at DPR, and Jay Farhat, executive director of protective services at Baptist Health, discuss the types of security measures to preventing crime, like security screenings and video monitoring, to the new technologies and innovations that improve safety, to training and recruitment of safety personnel on healthcare campuses. From the construction perspective, they discuss specific security measures that can be implemented into the environmental and building design, and tactics that protect the most vulnerable patients like children.

Listen to Episode 9 on Apple Podcasts, Google Podcasts and Spotify.

FEATURING

Jay Farhat
Baptist Health
Executive Director of Protective Services

Deb Sheehan
DPR Construction
Healthcare Market Strategy Leader

DISCOVER MORE

Read the whitepaper this episode follows How to Build a Safer, Healing-centric Environment. You can read all articles in the Healthcare Insight series and listen to past episodes of Constructing with Care available here.

In our next episode, Shehan and Farhat continue their conversation, discussing behavioral health departments, the importance of AI and autonomous devices, and the pivotal role of capital projects shaping safer environments.

Subscribe for future episodes to hear conversations with inspiring guests from across the healthcare and construction industry about how considerations in healthcare design and construction can create better clinical workflow, enhance patient experience, improve efficiency, and more.

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Data centers have become so integral to our everyday lives that we take them for granted. They play a crucial role in many of the tasks we perform, from asking a device to play a song, to the Cloud-based systems we depend on 24/7 to reading this story right now. Data centers make these mission critical tasks so seamless we don’t even consider their complexity behind constructing these facilities. With demand growing by the day, the construction of data centers shows no sign of slowing, even as the construction itself is no easy feat.

DPR completed its first data center more than 25 years ago and has built more than 850 since being founded. One such project that is currently under construction is the Meta Mesa Data Center in Mesa, AZ. Once complete, it will be among the most advanced and energy- and water-efficient data centers in the world and will provide over 200 operational jobs to the local community. A five-building campus encompassing over 2.5 million square feet of space, the number of skilled tradespeople onsite peaked at 2,000 workers. One of these team members is Alondra Navarro, a DPR safety coordinator, who shared her experience recently.

Q: What is your role at DPR? Describe the path you took to get there.

Navarro: I’m a safety coordinator here in Arizona, but I come from a family of drywallers—my father, my grandfather, my tios. My dad has his own construction company. He wanted me to do paperwork, but I wanted to learn how to hang drywall and how a building came together. When I started at DPR almost two years ago, I was a drywall apprentice. Then, I was asked to be a part-time safety coordinator and later moved to doing it full-time. I really enjoy being involved in safety.

Q: What are some interesting aspects about the project you’re working on right now?

Navarro: This is the first large data center I’ve been involved in, and it is mind blowing. When I started here, I had walking meetings with the project leaders to learn their expectations and what they look for on their walks. There are a lot of security protocols on this project and restrictions for who comes on site, so I assist team members in getting access.

On this project, I’m overseeing safety for Drywall, Strut, Division 7, and Doors Frames and Hardware. Division 7 has to do with the protection and performance of the building envelope. I walk different areas and give team members advice on safety protocols for various tasks.

Q: What is one thing you think everyone can do to make the industry as a whole safer for everyone?

Navarro: I think being open minded and learning to accept feedback from others goes a long way. People in the thick of things might not see potential issues that others with fresh eyes might. Building safe habits is the key—if it’s a habit it becomes automatic. It is easier to forget small details when you’re in a hurry.

We have meetings with safety managers at least once a week. We identify EHS toolbox talks we can focus on with workers on the jobsite. We also help them with OSHA certifications.

Q: How do you plan every day? For safety? For quality?

Navarro: I talk to the foremen, ask them questions about the plans for the day. I find out if there’s anything we need to focus on or if any incidents have occurred that we should talk about. I always ask, “What did we do yesterday that we can do better today?”

We start every morning with a stretch and flex, then a huddle, toolbox talks, and talking about our expectations for the day. If we hear about an incident at another contractor, we try to be proactive and come up with solutions for prevent those things from happening on our projects.

Q: What is your proudest moment at DPR?

Navarro: It makes me happy when people ask me to translate. My parents are from Guanajuato in Central Mexico. Some of our team members don’t speak English, which can make it harder for them to communicate. I help translate the all-hands meetings we have every Tuesday, where we get updates on the jobsite. Knowing English and Spanish has helped me connect with everyone. It makes me proud that I’m able to reach out to them that way.

Q: To be successful in your role, what skills does a person need?

Navarro: Being communicative and learning how to talk to people is the most important thing. Getting through to people can take time. People don’t always “get it” the first time and you have to remind them. That can be challenging because you don’t want to sound like a broken record, so it’s important to create relationships and be able to talk to your team members in a supportive way.

Q: What would your advice be for the next generation of builders entering this field?

Navarro: My advice is to go for it. Sometimes even going into a role that’s out of your comfort zone is a good thing because it gets you out there. My communication skills were not as a strong before I became a safety coordinator, but I have stepped up. It has helped me become the person I am right now.

EXPLORING CHALLENGES TO MINE OPPORTUNITIES

The construction industry is facing a number of challenges, exacerbated by a post-pandemic economy and shift in the way many people work. Strengthening and advancing the construction industry as a whole is a lofty goal–one that can only be achieved by working together.

FMI Corporation (FMI) specializes in helping engineering and construction firms create and execute strategies to achieve their business and financial goals. Chris Daum, FMI’s president and CEO, offers three fundamental issues facing the construction industry today:

• An industry dominated by discrete, unique projects
• An outdated construction procurement and delivery process
• An ongoing shortage of skilled labor

Exploring strategies some companies are using to work through these challenges can present opportunities and inform best practices. By posing questions, offering alternatives, and working together to find mutually beneficial solutions, it’s possible to improve the industry and move the needle of success forward for everyone.

FORECASTING ECONOMIC HEADWINDS

The global economy also affects building projects; construction is a leading economic indicator in the U.S. that contributes 4% to the GDP, according to Forbes. With portions of construction on the brink of an industry-specific downturn, according to Daum, construction is both a driving force in the economy and a potential victim of it. Meanwhile, interest rates are soaring, prices are inflated, and financing has become more difficult.

Along with economic issues, lingering effects of the pandemic and shutdown remain. For the commercial sector in particular, higher interest rates increase the risk to developers and make it more difficult to get loans. Cash flow changes and volatility in the market affect pricing forecasts. People aren’t going back into offices at the rate they were pre-pandemic, leading developers to pause or cancel some projects. Developer Trammell Crow Company (TCC) awarded a 1.2 million-sq.-ft. office building project that was subsequently canceled because of the decreased demand for office space.

One way TCC is weathering the financial storm, according to Mark Fowler, TCC’s executive vice president of development management, is by diversifying its portfolio to include fee development projects. This is part of a long-term strategy developed in the wake of the 2008 downturn. By learning from experience, adapting and adjusting their strategies, they’re better positioned to meet changing financial climates. “We’re not sitting around waiting for the world to change. We’re slowly trying to make deals work.” said Fowler.

OPPORTUNITY 1:
Benefits of Scale

Most vertical construction projects are one-off buildings where the owner builds one discrete project, rather than a series of projects. Why then should it be considered among the challenges? Examining the alternative to one-off projects may illuminate incremental improvements and lessons that can be adapted to other situations as well.

Owners who build repeatedly, or have an ongoing program that includes multiple construction projects, have advantages, including:

• Established relationships with builders, suppliers, transporters, permitting entities and financial institutions that facilitate successful outcomes.
• Economies of scale that increase buying power and potentially decrease costs.
• A more modern procurement process based on mutually beneficial partnerships.
• Improved processes (like prefabrication) and final products through both repetition and capturing lessons-learned on successive projects.

Meta is one example of an owner benefiting from a building program. To meet their goals, they partner with a group of general contractors who collaborate closely to drive the program forward. One advantage to this is that processes can be strengthened and refined based on ongoing experience.

According to DPR’s Austin Moore, “Key lessons learned get distributed across all the projects so that we as GCs can learn from what others have done.” Everyone gains by learning, and Meta benefits by having stronger teams on projects that proceed more efficiently. In cases where a program approach isn’t appropriate, owners can still benefit by working with builders who have experience working within similar programs and who continuously work to improve their own processes.

In another example, Atrium Health (Atrium) is warehousing and storing materials and equipment to be shared among different projects including the Carolinas Rehabilitation Charlotte Hospital according to Amanda Mewborn, vice president of planning, design and construction at Atrium. As the industry continues to struggle with supply chain issues and long lead times, having multiple locations can be advantageous. Atrium also tries to expedite the design items that take the longest to acquire, such as generators and electrical switchgear. By developing the designs earlier, they can order items earlier and reduce potential delays.

As an industry, contractors need to come together to share lessons learned and figure out a way for one-off owners to receive similar benefits of scale.

OPPORTUNITY 2:
Collaboration Over Cost Alone

“There’s this fallacy that you can get every piece at the lowest cost and build something great,” said DPR’s Atul Khanzode, a member of the company’s leadership team who focuses on technology, innovation and collaborative project delivery.

Today, it’s simply not possible for one person or company to have the expertise necessary to master everything that comprises modern building. As a result, the process can at times feel fragmented, which can prevent teams from maximizing benefits for the owner.

Rather than choosing partners with which to collaborate, owners may prioritize overall cost and select the lowest qualified bidder, noted Daum. The typical bid-build approach is at best transactional and at worst encourages an adversarial process. Various parties are forced to make decisions that are more about mitigating risks.

“One of the challenges in a downturn is everyone kind of retreats into defending their own turf. People are looking after their own interests, their own balance sheets, their own risk exposure,” said Daum.

Construction is a very integrative process that requires incorporating the right knowledge and expertise at the right time throughout the project lifecycle. A relationship-based approach places the contractor in a better position to provide greater certainty on projects and support owners through the decision-making process, noted Khanzode. When partners are chosen early based on the expertise they bring to the table, rather than cost alone, collaboration becomes possible.

A more collaborative process also enhances the human experience. Atrium, as an example, takes time early on to assemble and develop team culture, according to Mewborn. “We all have different strengths,” she said. “And the way that all of us get more joy out of the work we do is by capitalizing on people’s strengths, assigning work based on those strengths and working as a team.”

Building relationships and fostering trust is not just a feel-good exercise. Fowler points out that at TCC, “We want everybody to be successful, from the smallest subcontractor up to the GC. If you make money, we’re going to make money. We need you to be successful for us to be successful.”

TCC takes a different approach but ultimately agrees that having the right team on a project is key to its success. “Everybody’s got to be on the same page, otherwise, you’re going to end up fighting it out,” said Fowler. “The schedule’s going to slip. The quality of the work slips. Nobody’s happy. Lawsuits or liens get filed then you spend a bunch of time and effort working on things that don’t make money for anybody.”

Despite widespread agreement about the value of more collaborative project delivery methods, implementing this change has proven challenging given the risks associated with projects that are expected to have decades-long lifespans.

Improving the process through increased benefits for both owners and the builder can help. “I believe the industry could undergo a faster evolution if contract terms and financial incentives were better aligned with the owner’s goals, particularly in terms of on-time project delivery and staying within budget,” said Digby Christian, executive director of project delivery at Sutter Health. “While good intentions are valuable, it’s the influence of market dynamics that has the potential to drive significant transformation.”

OPPORTUNITY 3:
Attract and Develop Skilled Labor

The industry continues to struggle with skilled labor challenges. Daum suggests this may be due to newer generations being discouraged from entering construction because society has devalued vocational and skilled trade education. This has proven short-sighted. As Daum explains, the jobs that build infrastructure still exist and are among the best-paying professions anywhere in the American economy.

Lack of diversity also contributes to the labor shortage. One paradox of diversity, equity and inclusion, according to Jorge Quezada, vice president for people and culture at Granite Construction, “is that none of us created the systemic issues we face. But we all have a responsibility to do something about it.”

Daum points out that economic stressors often exacerbate labor shortages because companies put communication, training and development of people on a back burner. Thankfully, this doesn’t appear to be happening this time. Finding and retaining qualified workers remains a priority in the face of the current labor shortage.

Atrium is approaching the labor shortage by trying to get people excited about working on healthcare projects because they are meaningful and have a lasting impact on communities. They’re also looking to partnerships to address some of the shortages. Other forward-thinking companies have training programs targeting students graduating from high school or even still attending high school, including DPR.

Some states are also seeking to promote the return to vocational training as a means of addressing labor shortages. In Arizona, for example, the governor recently announced the “BuilditAZ Apprenticeship Initiative” which includes the goal of doubling the number of apprentices in construction and trades by the end of 2026. It includes funding to expand employer-funded apprenticeship programs aimed at increasing access to women and other underrepresented segments of the population.

Apprenticeships are another attractive option for learning a skilled trade. According to a 2023 study from the Institute for Construction Employment Research, union apprenticeships and workplaces are increasing diversity across the U.S.; 88% of women who finished apprenticeship programs are still linked to trade work.

PURSUING THE OPPORTUNITIES TOGETHER

The challenges are very real, but so are the solutions. A contractor’s role necessitates adaptability, responsiveness and consistency. It also demands a willingness to see things from the owner’s perspective—to share the same priorities and work together as one cohesive team.

There is no ‘one-size-fits-all’ solution. But there is an opportunity to shift the paradigm to one that rewards teamwork, promotes mutual success and advances the construction industry at the same time.

Shifting Into Focus

In our industry it can seem like the only constant is change. From supply chain disruptions to skilled labor shortages, news cycles often land on the challenges our industry faces or the current economic landscape. But a shift in perspective can bring things into focus.

When we choose not to react to the daily news cycle, but instead look at the commercial construction industry over decades, we see that we are maintaining at an incredibly high level—a high level of production, quality, and safety.

COMMON GOALS

From our reframed perspective, we can look at how far we’ve come in terms of production, for example, and how that in turn improves safety and quality. Through prefabrication of building components, we have vastly improved speed-to-market, all while ensuring a quality finished product and minimizing the highest-risk construction activities. Through alternative contracting methods we can further streamline workflows to consistently deliver higher performing buildings on schedule. While there is more work to be done, the trend promises to continue as we invest in new technology and refine our processes.

Keeping perspective also allows us to see industry challenges for what they are: a call to action. With common goals and the right perspective, we can work together to tackle persistent issues like supply chain inefficiencies, environmental health and safety, and sustainability in construction.

TAKING CARE OF PEOPLE

Take the shortage of skilled labor, for example: Attracting the next generation to the construction industry is a complex issue, and one we can’t solve alone. What we can do is work together as an industry to foster an environment of inclusivity, as well as continual learning and development to build the next generation of builders. We can celebrate the use of technology as the pathway to more career opportunities in construction and emphasize our industry’s evolution over time.

When we keep perspective, we can see that an ever-changing industry is an opportunity to double down on what matters most—taking care of people. Things like partnering with our customers to consistently deliver facilities that change the world and benefit our societies. Things like continually embodying world-class safety and growing happy, healthy teams who enhance the communities we live in.

A UNIQUE PERSPECTIVE

As we move into a new year, we often reflect on and are reminded of the many visionaries who brought us to where we are now. Visionaries like DPR co-founder Peter Nosler, who passed away in November 2023. Peter’s unique perspective and ever-forward mindset embraced change as the catalyst to build great things, contribute to communities, and innovate new ways of working. When we take a step back, as Peter often did, we can see the big picture. And it’s that perspective we keep that makes all the difference.

The stories in this issue are about reframing our mindset, from industry trends to actionable approaches. They feature people who embody an ever-forward way of thinking. We hope that they inspire you to see things from a different perspective, whether it’s the big picture or an individual lived experience.

– The DPR Leadership Team

Atlanta, GA

As its presence continues to grow in Atlanta, DPR,
acting as owner, client and contractor has completed drawings for its Atlanta Regional Office, which was last renovated in 2015. Construction is set to begin in late 2023.

Austin, TX

EIG support on the 794,000-sq.-ft. Domain 9 office building recorded zero incidents and a work permit submitted and approved months before energization. With a total of 25 Craft employees on the project at its peak, EIG produced an electrical feeder bank of 45 raceways underground, totaling 7,000 man hours.

Dallas-Fort Worth, TX

Virtual design and construction teams conducted an augmented reality site walk of a data center project using HoloLens technology to identify where future construction will take place.

Durham, NC

United Therapeutics and the Project Lightyear project team including DPR, Hanbury, and AEI unveiled its new cGMP warehouse with a “cord-cutting” ceremony. Consisting of 55,000 sq. ft. of ambient and cold storage, the building is net-zero energy, fossil fuel-free, and features 1,186 solar roof panels, two Tesla Megapacks, and 40 geothermal wells.

East Brunswick, NJ

After five years in its inaugural location, DPR’s New Jersey office has relocated to a new 15,000-sq.-ft. space. The office features work areas for 45 people, ample hoteling area, conference and huddle rooms and a beautiful wine bar. Teams moved in on September 5.

Hartford, CT

Team members from Connecticut Children’s, DPR, CannonDesign, Salas O’Brien, Colliers and trade partners dressed as superheroes to celebrate the groundbreaking of a new eight-story tower at Connecticut Children’s clinical tower expansion.

Miami, FL

DPR and Florida International University’s College of Engineering and Computing held a topping out ceremony to celebrate the completion of the shell for the college’s new building. The interior of the six-story building, will house classrooms, labs and research spaces for almost 8,300 students.

Phoenix, AZ

The team at Banner University Medical Center Phoenix Phase 1 Ancillary Imaging Rooms has achieved zero defects. Despite some minor challenges due to existing conditions and delays beyond control, the team was able to turn over the rooms with the highest quality.

Richmond, VA

The Children’s Hospital of Richmond at VCU began seeing its first patients in the new 23-story vertical expansion. Completed on schedule with the aid of prefab and collaboration between the city, VCU, and a team including HKS, JLL and DPR, the forward-thinking design was based on extensive research and testing.

Sacramento, CA

After deploying an 80,000-sq.-ft. mud slab to proactively prevent potential schedule disaster resulting from extreme winter rainfall, DPR and the SmithGroup design-build team topped out the UC Davis Health 48X Complex, a new four-story ambulatory surgery center. The facility will be one of the most technically advanced ambulatory surgery centers in the country.

Santa Clara, CA

Beating the schedule by two weeks and with the City of Santa Clara in attendance, the Vantage CA3 Campus project team celebrated the topping out of Vantage’s third campus. The team built 7,000 tons of structural steel with zero injuries. Upon completion, the data center will boast 64MW of IT capacity.

Singapore

DPR’s Asia Pacific team joined the U.N. Global Compact—a voluntary leadership platform for the development, implementation and disclosure of responsible business practices. DPR joins more than 15,000 companies from over 160 countries working to align operations and strategies in the areas of human rights, labor, environment and anti-corruption.

Springfield, MA

Baystate Medical Center celebrated the completion of its Surgical Operating and Interventional Suites. The team, including DPR and Perkins&Will, added new operating rooms and interventional suites, and streamlined location and patient flow to better serve patients and reduce critical wait times.

Washington, DC

DPR took part in the annual 2023 Greenbuild International Conference and Expo, held in Washington, DC. DPR’s sustainability leader Ryan Poole participated in a discussion on Environmental, Social and Governance (ESG), and an entire panel of DPR teammates led an information session on embodied carbon.

Wildomar, CA

The team at the Southwest Healthcare Inland Valley Hospital expansion project topped out a new seven-story, 290,000-sq.-ft hospital tower, which will accommodate 102 beds. More than 600 local workers have worked 173,200 hours to achieve this milestone.

From Start to Finish… We’re showcasing projects in all stages of development—from groundbreakings through final occupancy. Scroll down the page to browse the six projects highlighted in Great Things: Issue 10.

More than 200 craft, trade partners and team members celebrated the topping out of the University of Virginia’s McIntire School of Commerce project in Charlottesville, VA.

Nearly five months after the slab-on-grade was poured, the DPR team achieved a significant milestone in the McIntire School of Commerce Expansion Project at the University of Virginia. The topping out ceremony—celebrated by more than 200 participants including construction workers, trade partners, architects, engineers and the McIntire School’s Board of Directors—marked the next step forward in the development of the university’s new facility.

Nicholas Pauley, a DPR senior project manager, attributed the milestone achievement to the “team’s thorough planning and coordination in abatement, demolition, support of excavation, utility relocations, mass excavation, and concrete foundations.”

Following the topping out tradition, an evergreen tree and the American flag were placed atop a signed beam and flown into position on the five-story, 74,200-sq.-ft. building, Shumway Hall. Howard Dunn, a DPR superintendent, thanked trade partners and construction crews for their dedication and hard work to achieve the milestone a week ahead of schedule.

WHAT’S NEXT?

The next milestone is the completion of the south façade of the historic 1917 Cobb Hall exterior which sits aside Shumway Hall. By completion, the site will see a total of 48 trade partners and hundreds of skilled craft workers having a hand in constructing the facility.

The expanded McIntire School of Commerce will feature state-of-the-art classrooms and workspaces designed to prepare students for success in the rapidly evolving business landscape. Designed by RAMSA and Glavé & Holmes Architecture, the project is scheduled to be completed in Spring 2025.