Built to Last
The uncertainty surrounding the commercial construction industry in a post-pandemic world has created significant challenges. High insurance rates, a sharp increase in labor costs and hourly wages, the scarcity of materials in the supply chain, and varying vacancies across office, industrial and retail space are just some of the contributing factors.
But with these challenges also comes new opportunities, and recent data would suggest the future looks bright for an industry that continues to adapt to modern-day needs. Given how vital commercial construction is to the country’s economic growth and job creation, the federal government has been trying to kickstart things with several infrastructure investments and a concerted effort to bring manufacturing back to the U.S.
Here in South Jersey, developers, builders, engineers and others tied to the industry are navigating the road ahead while doing their best to keep pace with changing needs. We spoke to several individuals to get a better sense of commercial construction’s shifting landscape, the problems that persist, and how they are being addressed through critical thinking and innovation.
Post-Lockdown Needs
Since the pandemic, one of the more popular requests, whether for new construction projects or retrofitting an existing property, was improved air quality and filtration indoors. Reducing the risk of spreading respiratory viruses like the flu and COVID became paramount for business owners as they began welcoming employees back into the office on a regular basis.
Peter Hatton, director of commercial operations for Hutchinson Mechanical Services, notes that while the desire for improved air quality is not necessarily new, there has been a spike in interest since the pandemic.
“Air filtration and exchange have always been essential components of any healthy building concept. We’ve seen growing interest from clients in upgrading existing systems to include air purification upgrades for enhanced protection,” he says.
This renewed focus was also seen everywhere from health care facilities to retail shops to schools. NEW ROAD Construction Management Company works with several school districts throughout South Jersey, and Chuck Romanoli, principal, says the necessity for air conditioning and better ventilation has become a major component of public school construction.
“One of the trends that has evolved in response to the COVID crisis is the incorporation of more stringent air-quality requirements,” says Romanoli. “HVAC systems now typically include better filtration, improved fresh air exchanges and bacteria/germ prevention with infrared lighting.”
Romanoli adds that air conditioning also provides schools with more control over interior spaces “versus open windows, which are also a security concern for education settings.”
An Energy Boost
As part of its Clean Energy Program, New Jersey has made it a priority to enact codes that require new construction to be built with green energy in mind. To that end, in the fall of 2021, the state passed a bill requiring all new warehouses of 100,000 square feet or more to allocate at least 40% of their roof space for future solar facility installation.
But before commercial property owners boost their energy efficiency by opting for solar power, there are key questions they’ll want answered.
“The most important strategy to employ is choosing a solar energy installer that has longevity, is locally owned and trusted in the industry,” says Michael Boches, CEO, Geoscape Solar. “An experienced solar energy company will be able to properly engineer and install the right system, which maximizes a property’s energy coverage. The company should also have deep knowledge about the solar incentives that will provide their clients with the fastest return on investment.”
That’s because, like residential properties, commercial properties also benefit from the same federal 30% solar-energy tax credit, which provides a dollar-for-dollar tax credit based on the cost of installing a commercial solar-energy system.
“Commercial properties also benefit from accelerated depreciation on both federal and state levels. Accelerated depreciation allows businesses to write off an asset’s tax basis more quickly. This reduces the company’s taxable income, enabling them to reinvest the tax savings back to the business,” adds Boches.
A Changing Climate
With there being an increase in extreme weather around the country and because our area is subject to a wide array of weather patterns, preventative strategies and other considerations are top of mind these days.
When evaluating the long-term impact of occupying spaces in a region like this, developers are encouraged to actively engage tenants to find customized solutions.
“Future-proofing sites to enhance resilience is becoming increasingly important,” says Bohler’s James Thaon, PE, branch manager. “As an example, for industrial sites, we conduct comprehensive upfront due diligence. This includes evaluating backup power options and freight access, ensuring a balance between what is necessary and what is economically feasible. … Proactive planning and collaboration are critical for mitigating risks and ensuring long-term viability.”
“While we haven’t received many specific requests so far, we anticipate that clients will increasingly seek building designs that can handle a variety of severe weather conditions,” adds Young Yoon, counsel in Parker McCay’s construction and procurement department. “This means using reinforced structural elements, advanced insulation materials and improved drainage systems. These considerations would help ensure that buildings remain resilient and functional despite the challenges posed by extreme weather patterns.
“Our attorneys always advise clients to look at preventative measures in the construction phase that can potentially save maintenance cost and headaches in the future.”
Regan Young, AIA, president of RYEBREAD Architects, cites a report from National Institute of Building Sciences that states for every $1 invested in preventative strategies, $6 is saved in damages due to natural disasters. “This spending reduces risk, saves lives and creates jobs,” he says. “However, climate change is not the only challenge that will require resiliency. Clients need to implement cyber/analog security and social/digital transformation responses.”
Staying Ahead of the Curve
Samantha DeAlmeida Roman admits she’s one of those people who is cautious about the rise of artificial intelligence (AI), but at the same time is very optimistic for how it can benefit the commercial construction sector.
As president of the Associated Builders and Contractors of New Jersey, she’s noticed some members using AI tools like ChatGPT to assist with their marketing and digital content needs.
“These are tradespeople who are running their own business and don’t have a whole [marketing] team, so it’s been extremely helpful for them in being able to craft different pieces that would be very difficult and time-consuming for them to create on their own,” she says.
As technology advances and the construction industry becomes more receptive to innovations like 3D printing, Yoon sees AI playing a significant role in managing uncertainties.
“Building information modeling, when integrated with AI, is particularly valuable. It could help create detailed and accurate building plans that can simulate different scenarios, enabling better planning and risk management. These technological advances could help stakeholders stay ahead by enhancing accuracy, efficiency and adaptability in their projects,” he says.
At Bohler, its dedicated innovation and technology team are committed to enhancing foundational technologies and continually evaluating emerging tools, including AI.
“By staying at the forefront of technological advancements, we are able to streamline our processes, improve efficiency, and provide more accurate and insightful solutions,” says Thaon.
But the integration of AI has not been smooth across the board, notes Robert Powell, VP of business development and marketing at Vineland Construction Co.
“We are still feeling the impact of labor shortages and supply-chain issues on overall project costs and schedules. Lead times for fabrication have improved, but are not where they were pre-COVID. This also ties into the supply chain and manufacturing of parts and materials. The AI boom has severely strained the electrical supply chain. New data centers require heavy power and cooling, and companies are paying top dollar to get those items. Manufacturers cannot keep up with the current demand,” says Powell.
Ultimately, DeAlmeida Roman recognizes the younger generation’s interest and willingness to embrace AI should benefit the industry in the long run.
“The younger generation are open-minded to it and they don’t seem scared. I think it’s going to change the industry in a positive way,” she says.
Building the Future
And that younger generation is who will carry the industry forward, which is why workforce development has also been crucial to the industry’s growth.
“Labor shortage is something I hear about every day,” says DeAlmeida Roman.
That is why more and more organizations are working hard to get younger folks interested in the trades, starting their outreach and educational efforts as early as middle school.
“The shortage of qualified labor is a widespread issue across the construction industry,” says Hatton. “In mechanical contracting, replacing experienced installers and technicians who are retiring is particularly challenging. We continue to prioritize recruitment from trade schools and technical institutes, while also providing ongoing training for our existing workforce to ensure they remain focused on daily safety and stay updated with the latest technological advancements in our industry.”
Despite the hurdles still to clear, the industry’s outlook remains positive.
“Driving around, it seems the only thing being built these days are chicken joints, cannabis shops, dollar stores and empty warehouses. However, for clients with bespoke projects, there is interest in sustainability, resilience, security, health and design,” says Young.
DeAlmeida Roman says that in conversations with her organization’s members, there is a buzz as quality contractors are not just surviving, but starting to thrive in the current marketplace.
“We are very fortunate with the infrastructure that is going on, with the warehousing, the commercial space—even with the residential properties and apartments that are being built—there’s just a ton of construction going on. And long term, it looks very positive for the number of projects that will continue to grow in New Jersey.”
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Author: Peter Proko
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