Question: What is the biggest difference in how your company assesses a job now versus before the pandemic?
Answer: The biggest difference for us is to focus on communicating our policies and procedures for the COVID response with our customers and incorporating language into our contracts, which allows us to react in unnecessary manner. There have been a few COVID delays in some of our projects, nothing major. But we have had a few impacts on a few projects where people showed up to the job site, and maybe had exposures or came up with COVID. So, we’ve had to do all the things that you’d have to do when you get exposed — sometimes stop the work for a few days till we can contract trace and figure out who’s exposed, who’s been exposed, etc. Really, it’s just communicating with all of our stakeholders and making sure our customers are aware of some of the impacts when they occur.

Q: What are the top challenges and opportunities facing your industry in 2021 and beyond?
A: For opportunities, this year — and probably for 2022 — there’s a very high demand for new industrial buildings, which is the bulk of our type of construction. That demand has been driven by the acceleration due to COVID of more goods being bought online and having to be delivered to people’s houses. That’s been driving our market sector property heavily. We’re as busy as we’ve ever been and we have more projects in the pipeline than we’ve ever had in terms of industrial. The main challenges we’re facing nowadays is steel and wood and plastic products have all become in high demand. Manufacturers right now have way more demand than they can actually manufacture and supply, so lead-time to getting materials to job sites is stretching out. In addition, there are cost escalations going on in the marketplace based on the inverted supply-demand ratio right now. And then thirdly, the top challenges and opportunities we have is finding and hiring quality people. Our business here locally is kind of limited because we have a small population. Companies like ours have to kind of sit back and balance our resources, because we can’t take on necessarily everything we get an opportunity to look at, so we have to look at our resources to make sure that we can perform the work without killing our people with overtime. So, that’s a kind of balancing act right now for a lot of companies here.

Q: With the need for masks, social distancing and other measures, how do you address safety in the workplace differently now?
A: We follow the Washoe County Health Department and CDC guidelines. And additional to the traditional safety items, we also ensure the proper use of personal protection equipment, and social distancing, health assessments, proper sanitation facilities, and cleaning protocols. We’re reducing meeting sizes or changing locations to safely support larger groups, as well as additional documentation to record those efforts and support possible contact tracing as necessary. And we’re communicating that with our field staffs on a regular basis. Our field supervision project control teams are well-versed in these requirements; they’re on top of this stuff every day at the job site.

The post CEO Michael Russell discusses state of the construction industry appeared first on United Construction.

Text below copied directly from the NNBW article:

Q&A with United Construction: Industrial development outlook

United Construction CEO Mike Russell recently discussed the future of the Northern Nevada industrial market with the NNBW and provided insight into development efforts and the strength of the market for 2021 and beyond. Below is an interview with Mike, slightly edited for clarity.

United Construction CEO Mike Russell believes investors will continue to view the industrial real estate sector as a safe haven for strong investment in Northern Nevada.

NNBW: What factors will impact the industrial market as we move through the year?

Russell: We will continue to have COVID impacts such as personnel health, material supply chain issues and potential project schedule delays. In the last several months we’ve started to see significant material cost escalations related to steel, lumber and sheathing in the industrial sector.

The increase in home building across the country, combined with steel and lumber mill capacities, has created high demand for dimension lumber, sheathing and steel-related construction products (rebar, steel piping, structural and miscellaneous steel, etc.).

This increased demand has created price volatility and escalations which have driven industrial construction costs 5 to 10 percent-plus higher just over the last few months. We’ll keep watch on these cost escalation trends to see if they hold at recent higher levels, or if they recede with future home building and industrial construction demand.

NNBW: Site availability in Greater Reno-Sparks is at a premium. How does limited availability of easily developed sites impact new projects?

Russell: I believe we’ll see a few trends. Over the years here in the Truckee Meadows, industrial development has typically gravitated to sites that have simple entitlements and somewhat flat topography.

One trend we’re seeing is development on sites that require more complicated entitlements and grading.

This trend will drive development delivery timelines longer and project costs higher. Industrial development will look east of Reno-Sparks in TRIC, Fernley and beyond to have more industrial land inventory and potentially less site acquisition and development costs.

We’ll still see industrial development at appropriately zoned infill sites throughout Reno-Sparks over the coming years, and developers will get creative at multiple property site assemblies to accommodate industrial development where possible.

NNBW: How will the ongoing pandemic and social distancing guidelines impact work operations across the county?

Russell: Unless the pandemic gets worse, we don’t anticipate much impact from what we’re already experiencing. We require daily health screening, masks, social distancing, health and safety practices per local and federal guidelines. COVID has already slightly impacted some of our project schedules and material deliveries since Q2 of 2020.

NNBW: Will 2021 be a good or bad year for the regional industrial market?

Russell: Industrial development has a strong future in Northern Nevada for the following reasons:

• In our current COVID environment, industrial, food, e-commerce and last-mile demand is very strong since people are staying home and ordering goods and food online for local pick-up or delivery.
• Northern Nevada is experiencing a major influx of businesses and people from around the country (a high portion from California), which will continue to diversify and strengthen our local economy. That in turn will require more industrial sector support.
• While developers are feeling the impact of construction and land acquisition cost increases, exit cap rates are at all-time lows. Industrial lease rates also are/will be rising.
• As has been the case for many years, investors view the industrial real estate sector as a safe haven for investment, which is truer today than ever since retail and office sectors are suffering higher risk.

The post CEO Michael Russell shares industry insights with the Northern Nevada Business Weekly appeared first on United Construction.