Common Construction Setbacks
Commercial real estate construction is rarely a smooth process. Sometimes your expectations are higher than what unavoidable limitations may allow you when developing your property. These obstacles that can delay, halt or increase the cost of development are known as construction setbacks. Here are some of the most common construction setbacks facing real estate developers and architects.
Weather-Related Delays
Weather delays can cause many problems on your project, including increased labor and penalties, cash flow problems, additional equipment rentals, or other issues that can massively cut your profits. Let’s take a look at pros and cons of construction each season:
- Winter: When building in the winter, the cost of materials is significantly cheaper. But the weather, such as areas of heavy snow, can cause delays. With harsh cold weather, materials like iron and steel are susceptible to rust from moisture while dryness can cause paint to crack.
- Spring: In the spring, more daylight allows for longer construction days and the warmer weather makes it easier for construction crews compared to the winter season. Unfortunately, unpredictable weather can cause delays.
- Summer: Summer allows for quicker drying times for projects that involve mortar, paint and adhesives. Keep in mind that excessive heat can lead to delays not only with construction workers needing to take more time off but materials as well. For example, according to the American Concrete Institute, preparing concrete on hot days without factoring in additional water requirements will lead to weaker applications. This could cause problems and delays in the future.
- Fall: This is traditionally the slow season for regional governmental agencies, banks, and title companies which allows you to get permits and inspections faster. However, similar to building in the winter, cold temperatures can cause a problem if the ground is slippery and wet, causing less mobility and more accidents.
Permitting and Approval Delays
Depending on the location and scope of the project, permits and approvals can take time. As a result, you should have some clause on filing permits and the process length to have a like date on when to begin your project. However working with professionals, such as Southeast Venture, can easily streamline this process due to existing relationships with officials. They’ll also have an in-depth understanding or each city or municipality’s process.
Supply Chain and Material Delays
Supply chain battles in the construction industry have been sobering, causing material shortages and longer lead times. In most cases, some suppliers are usually unwilling to hold prices for long periods, which impacts project finances and construction schedules. Most owners may agree to grant time extensions but are reluctant to recover or control the costs from supply chain woes.
Fortunately, there are steps and strategies to prevent and recover the cost:
- Ask questions pre-bid: Contractors should discuss with the property owner beforehand concerning the supply chain challenges.
- Ask for alternatives and substitution early: In case of a cost increase, the substitution documents the cost increase of the specific item. For example, the cost of PVC and other plastic pipes have increased by about 60% since fall 2020 and may account for more of your budget than previously anticipated.
- Review time extensions and force majeure clauses: Most courts look at these clauses to determine who bears the supply chain risks.
Design Changes and Scope Creep
Changes to design and scope lead to delays, cost overruns, rework, and compromised quality. To mitigate these issues, contractors must communicate clearly and document during the design phase so stakeholders understand and manage expectations and provide legal protection. It also ensures project success within the defined boundaries.
Luckily, working with an experienced designer can mitigate these delays as they have experience understanding the impact of changing a design at each step of the process.
Unforeseen Site Conditions
Before construction, every scope of work should be priced correctly and accurately quantified. However, if there are defects hiding in the building’s walls or the surrounding environment, that is prone to impact budgets and schedules. Some unforeseen conditions like old utilities, rock removal, or poor soils, are hard to show on build drawings. Such surprises would cost substantial replacement costs and cause massive delays in the project.
Working with professionals gives you the peace of mind that any unforeseen site condition will be accounted for as they have extensive knowledge about the land in your area and can help anticipate a variety of issues.
Call Southeast Venture Today!
When it comes to Nashville’s commercial real estate construction projects, it’s essential to have a reliable partner by your side to navigate these setbacks successfully and ensure a smooth process. Our team at Southeast Venture is equipped to handle diverse construction challenges and deliver exceptional results. Contact us today to book a call with one of our experts.
