Last year at this time, we were grappling with supply chain shortages. Towards the end of 2022, there were fears that the economic slowdown would impact our region and our industry. Today, some of the country’s most admired brands deem North Texas the best place to work and live and we’re experiencing some of the greatest opportunities in our company’s history. That’s not to say there aren’t a new set of challenges that could impact your project. Read on to see the state of the industry and what we’re planning around to stay on schedule and on budget.

What’s remained readily available?

For the last three years, carpet, resilient flooring and base have been largely unaffected. Our research tells us that this is no accident. Flooring manufacturers produce in high volume so finding the right country, manufacturer or supplier to source components and raw materials from make all the difference.

What’s vanished?

It’s always nice to see when a massive issue has largely gone away. Not too long ago, it was nearly impossible to get metal studs and insulation. Today, it’s readily available and delivered in 4-6 weeks, tops.

What’s unchanged…and still a problem?

Lights are a major issue – one we see continuing for the foreseeable future. At least 50% of fixtures don’t make their promised shipping date and most shipping dates are longer than they were before the pandemic. In addition, smaller HVAC equipment like fan powered, variable air volume and fan coil units are still taking 4 to 8 weeks. We know how to plan around this and work closely with our subs to understand production, availability and ship times.

What’s still a massive issue?

Technology companies love calling North Texas home so it’s important to know that most Computer Room Air Conditioner (CRAC) units still have 40+ week lead times. Specialty units take over a year and some have no production dates assigned.

Factor in 6-12 months lead time for lighting and audio-visual controls and 4-6 months for electrical switchgear. Ceramic, porcelain and stone tiles seem to be a larger issue than ever before with most well over 8 weeks on a regular basis, regardless of whether they’re economical or specialty. To top off some of the biggest wait times, large air handler and roof top units still come with very long lead times and one can expect anywhere between 12 and 36 weeks in most cases.

It’s safe to say that the more technology and brains in the equipment, the longer it is going to take to get. So while we are in a better place than last year at this time, there are still some supply chain challenges to plan around.

What’s trending?

The demand for high quality work, fixtures, materials and spaces remains high and no matter what shortages or timelines exist, we can deliver. Private company or Fortune 500, our clients want their spaces made to order. Our challenge – one we love to accept – is  making their dreams on paper a reality. We love figuring out how to execute. As companies have adopted hybrid schedules and others go 100% remote, we’re building office spaces to be a place to impress your prospects, showcase products and services, and attract top talent. And for those coming in just a few days a week, a place that employees want to be. And perhaps the biggest post-pandemic trend is the emphasis on spaces that inspire collaboration. From meeting rooms, common areas to outdoor features, creating opportunities for people to interact and share ideas has been a priority for our clients.

Competition is also a big trend. There is so much growth in North Texas and competition for Class A space, we’re working with clients that are investing in Class B space to make it more competitive. We’re also seeing greater demand in Fort Worth where we’re growing our team and have completed some of our favorite projects of all time.

What’s ahead?

No matter what the year holds, staying on schedule has always been critical and with product shortages and market uncertainty, our focus on scheduling our projects strategically keeps our timelines on track and budgets in check. It also gives us the time and space to innovate and expand our portfolio. There’s no doubt that the last few years have been met with challenges our industry has never experienced before. Our ability to maintain world-class service while ensuring that we adapt, evolve and scale with the times will always set us apart.

Wonder what has the most potential to significantly affect your construction budget in today’s commercial landscape? Below are the top things we’ve seen that are likely to bust your budget, every time.

1) Failure to set a firm budget or disclose that number with your construction professionals

The biggest culprit of a busted budget is not setting a firm budget beforehand or failing to disclose it with your design and construction professionals. Sharing your budget with our team will allow us to work with the designated project designers and architects to design your space within your budget boundaries and help mitigate any extraneous costs in the process.

2) Unrealistic expectations

All things are different than they even were 12 months ago, and they are changing at least monthly. If our client wants a top end space from a finish level complexity it is very difficult to attain that for less than $100/sf in today’s market….and that’s just construction cost. We want to be a creative partner and help our clients get the most out of each dollar, but we can’t take our partners shopping for Ferrari’s because they love them when what they can afford are very nice and dependable, Ford F-150s.

3) Replacing existing mechanical, electrical and plumbing infrastructure

This pertains mostly to remodel projects however diving deep in the real estate portion of the process before leases are executed can pay large dividends when it comes to replacement of mechanical equipment, plumbing fixtures and electrical gear. Know what you are buying before you sign on the dotted line. How old are the fan-powered boxes? Does the building have digital controls for heating and cooling?

4) Selecting custom elements on standard products

Many acoustical and wood ceiling elements and light fixtures shown in standard product lines can be made “custom” by selecting the wrong option, causing a significant jump in cost and lead time. It’s important to verify with the manufacturer and contractor that your architect has in fact specified the standard line product.

5) Metal, metal everywhere

Nothing has taken a steeper climb in the post-pandemic world than the cost of metal. Over the last 12-18 months, the cost for metal products has increased between 50-300%, including studs, structural steel, and ornamental metal. We love metal and can’t build without it but be warned that it is a pricier item in today’s environment and can sneak up on your budget if you want high volumes.

6) Existing floor conditions

This can be a significant expense depending on the tolerance of your construction materials, especially where remodeling is involved. If a floor survey or existing conditions review is feasible early, then the added expense of possible floor preparation can be reduced significantly or mitigated all together. This condition is best reviewed before a lease is ever executed, so be sure your broker or construction manager team considers this in negotiations

7) Technology procurement and planning

Now more than ever, it is difficult to procure technology and many times is put on “back burner” status in the planning process. However, it is just as important to plan for as the final design, construction, and furniture. Not accounting for technology needs upfront can be a major budget and schedule killer in the long run. Understanding what your space requires in relation to audio/visual needs, structured cabling, access control, network infrastructure and service providers can go a long way to ensure your dream space is delivered on time and within budget.

8) Project changes

We understand that some project changes are unforeseeable or unavoidable. Whatever the case may be, we are happy to accommodate our clients if plans need to be adjusted or change direction. However, these shifts can have a serious hit on the budget and potentially prolong the original project timeline.

We believe in taking the complexity out of even the most complicated projects and delivering spaces that inspire. To do so, we are actively keeping a pulse on the unprecedented supply chain issues facing the construction industry as a whole.

Read below for the materials and sectors currently affecting project schedules in 2022:

• Electrical Components
  • Electrical components including light fixtures, panels and switch gear require a lead time of 8+ weeks, as opposed to the prior 4–6-week lead time.
  • Lighting controls present the biggest challenge as manufacturers have difficulty filling orders. For many jobs, we are having to install temporary standard switches to control lights, even with some control components going the full project duration without having a confirmed ship date.
• HVAC Components
  • All local manufacturers of sheet metal and grilles are struggling to keep up with demand, causing fabrication timelines to be 4+ weeks for standard duct work and more for specialty duct work. Just a year ago, these timelines were 1-2 weeks.
  • Normally made-to-order in 6-8 weeks, Building Air Handler units and package rooftop units are now running 12-14 weeks or longer as a result of shortages and COVID-related manufacturing delays.
• Drywall, Framing & Insulation Materials
  • Light gauge metal framing now has a lead time of up to 8 weeks despite normally taking 2-4 weeks.
  • Heavy gauge metal studs and “long studs” are running from 8-22 weeks depending on the quantity needed for any given project.
  • Drywall materials have remained available in at least 4 weeks.
  • Manufacturers have warned that insulation materials are a major concern. Rigid insulation materials for building envelopes and built-up roofing are serious long-lead issues for those needing large quantities. However, materials like sound batts used in tenant interior work have not affected project schedules thus far.
• Doors, Frames, Hardware and Glazing
  • Door manufactures for large stain grade solid core doors are currently 8-12 weeks from approved submittals.
  • Instead of taking 4-6 weeks, door frame and hardware materials now take 10-12 weeks for basic clear anodized aluminum from approval.
  • Door hardware has remained steady at around 6-8 weeks and makes most project schedules.
  • Glass door hardware lead times have been consistently around 6 weeks and have not affected project schedules thus far. Custom, made-to-order or specialty hardware like Blumcraft presents severe lead time challenges that could be well over 12 weeks after approval to receive.
  • ¼” and ½” glazing is normally manufactured in 5-7 days or less but local lead times are now over two weeks in many cases.
• Finishes – Flooring, Paint, Base, Fabrics and Wallcoverings
  • Paint lead time is now 2 weeks despite never having a lead time of more than a single day previously.
  • When produced domestically, carpet lead times have maintained a 6–7-week lead time. Carpet has remained the steadiest material during the pandemic.
  • Whether produced domestically or not, tile is the most unreliable finish in the market to get lead times and ship dates for. If a job requires tile, it needs to be prioritized right behind lighting and HVAC equipment.

Mercedes-Benz Financial Services held a grand opening May 30 for its new Fort Worth Business Center where it will employ about 900 workers.

The 200,000-square-foot, four-story facility is located at 14372 Heritage Parkway in the AllianceTexas master-planned community in northeast Fort Worth.

The center is located about a mile away from its previous location. That building, which spanned roughly 180,000 square feet, was too small to house Mercedes-Benz Financial’s growing workforce.

The company decided to keep its business center operations in AllianceTexas to maintain its employees’ commutes and work-life balance, said Peter Zieringer, president and CEO of Mercedes-Benz Financial Services.

“When we looked at where our employees live, we did not want to move too far away from the current location. Otherwise, you’re in a situation where commute times change and you may lose people,” Zieringer said.

An estimated 900 direct and indirect employees work at the new center. Around three-quarters of the workforce is made up of direct workers who are employed by Mercedes-Benz Financial. The remaining workers are temporary contractors working with the company or are employed by businesses like food vendors offering services in the business center.

The new center has room for growth and could accommodate another 100 workers, Zieringer added.

Amenities at the center include technologies like facial recognition software and occupancy sensors; a fitness center; a café; sports courts; walking trails; and meeting areas for employees. The company is also hoping to boost productivity by offering nap pods for employees to rest during the workday.

Mercedes-Benz Financial opened its first hub in AllianceTexas in 2000. The new center is the third building it has occupied in the development. It moved into its previous space in 2007.

“To have a flagship brand like Mercedes-Benz at the front door of AllianceTexas–anyone in our business would want that kind of a customer,” said Mike Berry, president of Hillwood, which developed AllianceTexas.

“They help us tell the story of live, work and play,” Berry said. “To be able to have a high-quality workforce like the workforce that’s here not only run their business here at Alliance, but also their employees can live in the area in a wide variety of housing, and their kids go to school in great school districts. It brings more attention and more people and more positive growth to the area.”

This article originally appeared on CommunityImpact.com.

Photo Credit: CommunityImpact.com courtesy Mercedes-Benz Financial Services